Friday, October 29, 2010


Looking to boost overall cash flow from dividends I've decided to add American Capital Agency Corp (AGNC: NASDAQ) to my taxable investment account.  AGNC is a real estate investment trust which earns income primarily from investing in residential mortgage pass-through securities and collateralized mortgage obligations. These investments consist of securities, for which the principal and interest payments are guaranteed by United States Government-sponsored entities, such as Fannie Mae and Freddie Mac or by a United States Government agency, such as Ginnie Mae. The Company is externally managed by American Capital Agency Management, LLC, a subsidiary of a wholly owned portfolio company of American Capital, Ltd.

AGNC has a price to earnings of 4.01 with a ROE of 34.17.  They have earnings per share of $6.84 with a dividend of $5.60, which represents a return of 19.55% on their recent share price of $28.64.

I have to admit a bit of trepidation about investing in AGNC after previous experiences with REITs.  However their reported earnings seem to indicate support for their current dividend and their share price has remained fairly stable during the past year, with their 52 week high being $30.09 and their 52 week low of $23.61.  Since the total initial investment I'll be making is a small fraction of my portfolio, I believe the risk is acceptable for current returns.  The fact that they've managed to thrive during one of the worst economic downturns in this writers memory is yet another positive as far as I'm concerned. 

Sunday, October 24, 2010


Took a couple extra days off work this week.  Just needed some down time, so I went to the Isle of Capri casino in Booneville.  Played the slot machines for a couple of hours, lost $50, but I had a good time.  Decided to go to Sedalia for some shopping at Big Lots.  Didn't find anything there, but I did pick up a nice addition to my Egyptian collection, later in the day, at Hobby Lobby.  So it's been a relaxing weekend overall.

Going forward this week we'll be looking at the GDP report and the report on consumer confidence.  Experts aren't expecting much of either report, so any surprise gains could bode well for stocks.  Also, a great deal of money has been moving out of government bonds lately and the money has to go somewhere.  If a decent percentage is reinvested in the market we could see some additional gains.  I'm looking for the big push, one way or the other, to come after the November elections.  However, we could see movement before the elections as investors factor in expected election results.  Just have to wait and see.

Collected some good dividend payments in the past few weeks, including my last payment for this month from Windstream (WIN: NASDAQ).  They have a current dividend yield of 8.03% on their recent share price of $12.45.  However, I would caution that their current earnings may not support continued payment of such a high dividend.  Right now I'm holding on to the stock since I bought in at a lower price and my yield is closer to 10%, but I am watching it very closely.  If earnings do not pick up I may be selling my position and moving the money elsewhere. 

Thursday, October 7, 2010


Just read an interesting article about traders beating out investors under current economic and market conditions.  While I agreed with some of their points, I think they ignored the fact that you don't necessarily have to be one or the other.  I firmly believe that there are merits to both and there are times when it's appropriate to trade stocks, as opposed to a simple buy and hold strategy.  So in my opinion, we should all be investors who also take advantage of a great trade when it comes along.  Although I consider myself a dividend investor, which entails buy and hold, I'm also quick to take advantage of decent capital gains.  Usually when I'm sitting on a large paper profit, I'll figure out how long it would take to earn the same amount through dividend payouts and then decide which I would rather do.  Sell the stock for immediate gains or hold and collect the dividends.  I've also cashed in on capital gains and turned around and repurchased shares of the same stock for the dividend payout when the share price has dropped back down. 

Not much news with my investment accounts this week.  Collected nice dividend payments from Merck (MRK:NYSE) and Ishares Preferred Index Fund (PFF:NASDAQ).  Took cash from Merck and reinvested dividend in PFF.  I'm working on building my position in PFF since they pay monthly dividends.  Want to keep my cash flow from dividends ever increasing and it doesn't hurt to have a few holdings who pay on a monthly basis. 

Monday, October 4, 2010


It's been kind of a slow week for my investment accounts.  Got a nice dividend from Reynolds American Inc. (RAI:NYSE).  I'll be upping my stake in RAI with my next stock purchase.  They currently pay a dividend of $3.60 per share, which represents a 6.12% return on their recent share price of $58.85.  They have earnings per share of $4.16 and their P/E is 14.1.  RAI is a long term holding in my regular stock portfolio. 

Stock futures are pointing towards a lower open in the market this week, due mostly to concerns over U.S. jobs.  So I'm not looking for any big moves this week.  I just keep reminding myself that the longer the market languishes, the more time I have to accumulate bigger stakes in some great dividend stocks.