Tuesday, November 7, 2023

October 2023 Dividend Stock Purchases/Sale

As I'm writing this blog post, it's Friday, November 3, 2023. The temperature is going to reach a high of 47 degrees Fahrenheit here in Central Wisconsin, which isn't bad for this time of year.

With that aside, let's briefly highlight my one sale and my one purchase for the month of October.

My one sale for the month of October was 14 shares of W.P. Carey (WPC) at $52.58 a share. Unfortunately, the company made the decision to exit office properties through a spin-off. This will result in a 20% dividend cut, which is a tragedy as WPC was just a year away from a 25-year dividend growth streak. As my colleagues Adam Galas and Brad Thomas explained in a recent article on Seeking Alpha, the move was arguably questionable. WPC had already been working on and succeeding at reducing its exposure to office properties in recent years. The move just suggests that management isn't very confident in its fundamentals right now.

In limited circumstances, there are times that I will hold after a dividend cut. I did so with Energy Transfer (ET) and it has worked out pretty well. But I've simply ran out of patience with WPC. This action reduced my net annual forward dividends by $59.864, pending the actual amount of what the cut would have been.

I redeployed these capital proceeds into Ares Capital (ARCC), which is arguably the best BDC in the world not named Main Street Capital (MAIN). I purchased 38 shares at an average cost per share of $18.97, which equates to a 10.12% dividend yield considering the $72.96 in net annual forward dividends added by this transaction. Investors can learn more about why I'm comfortable with the stock in this recent article.

Concluding Thoughts:

Though they are rare when a portfolio is properly constructed, dividend cuts are a (painful) part of the game. Fortunately, there are plenty of great businesses in which the proceeds can be redeployed.

Thanks to $17.74 in dividend increases and my swapping of WPC for ARCC, my net annual forward dividends grew from just shy of $4,230 at the start of October to nearly $4,260 heading into this month.


Do you own WPC? If so, what are you doing with your shares following the news in late September?

As always, thanks for reading and please feel free to comment below!

No comments:

Post a Comment