ALTRIA GROUP "WORLD'S GREATEST INVESTMENT"

I know it hasn't been popular to invest in the tobacco industry for quite some time now, which might explain (in part at least) the mediocre/poor performance of Altria Group's (MO) stock price.  However, I recently read an article on the Motley Fool website which presented a good argument for Altria being possibly the "world's greatest investment."  They made some good points about how stocks with slow growth and high yields can make stellar gains through reinvested dividends over a period of time. 

I've owned shares of Altria for quite some time now and, after reading the article, have decided the best use of their dividends would be to reinvest and increase my stake in the company.  Some may think this an insane move with tobacco use on the decline in the U.S. for several years now, but I seriously doubt that the industry will fold anytime soon.  Basically what you have is a simple business model consistently churning out cash for shareholders.  As a smoker, I have no qualms about investing in the tobacco industry.  I'm sure there are plenty of people who would disagree.

Closed on my purchase of AGNC shares earlier in the week and collected some great dividends from Campbell's Soup, AT&T and Universal Insurance Group.  The month is off to a great start, hope to see it continue through the rest of 2010!

Upping My Investment in UVE

Over the weekend I reviewed my portfolio and decided to up my stake in Universal Insurance Holdings (UVE-AMEX). The Group's principal activity is to provide property and casualty insurance. It performs various aspects of insurance underwriting, distribution and claims. It markets and distributes its products and services, primarily in Florida.

I've written about UVE before and have been a long time shareholder for quite some time. Not long ago I had sold some of my shares for the capital gains, but now that I've reviewed the stock, I've decided to buy more. I've always liked their dividend payout and currently it is running at 12.94% on the recent share price of $6.19. Not too many places right now you can get a 12% plus rate of return.

Another factor in my decision was an article I read recently which argued that one of the most important metrics for stock picking, is insider ownership. I thought the author made a very good argument for investing in stocks with high insider ownership. That being said, UVE, which has been a great investment for me so far, has inside ownership of over 50% on top of their high dividend payouts. They have also expanded operations outside the state of Florida, which could indicate prospects for future capital gains.

Bottom line, if the insiders are willing to tie up so much of their money in the company, then I'm thinking it probably wouldn't hurt for me to keep some money working with them.

This Week's Trades

Decided to take advantage of Universal Insurance (UVE) 11% dividend yield and pick up some more shares for my taxable portfolio. UVE is a long term holding in my regular portfolio and my IRA. Also decided it might be time to have a look at REITs again. With real estate turning around and several companies gearing up to pick up distressed real estate investments, thought it might be good to shop around. I've decided on Capstead Mortgage (CMO), one of the real estate trusts that has survived the turmoil of the past few years and seems to be on track for recovery. Their dividend yield is currently 16.30%, which is enticing in its' own right, but I chose them mainly for their experience. They've been in business for quite some time and I figure if they could survive the past year and keep their dividend intact, then they're likely a pretty good bet going forward.

Still building cash, but things are looking up on the job front, so I may soon be deploying excess cash in my stock portfolios. Even though I'm not happy with things on the political front, I believe that the stock market and the American economy can overcome a lot of idiotic moves by our nations politicians. And there's always the hope that they'll be voted out and replaced with people who have show a little more fiscal responsibility.