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I sold what I had in arr today after they lowered the dividend from .07 monthly to. 05.
I sold NLY about a year ago for a small profit. Wasn't worth the loss of sleep to hold it. Though I did enjoy the dividend. I wouldn't be enjoying the cuts if I still owned it. Still own O, DLR, and ARCP. I think REITs belong in my portfolio, and I want REITs that have assets. MREITS are investing in paper and that's not something I plan to do.
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Yeah. This divided cut, unlike previous ones, is causing me to do some soul-searching about a few members of my portfolio. Most of my portfolio is sleep-well-at-night, hold-for-just-about-forever dividend growth stocks like MCD, AFL, MO, PM, JNJ, and the such. Then I’ve got a fairly healthy chunk in tech names (INTC, AAPL), which although they require more monitoring and may not be “hold forever” names, I still consider them to be almost-core dividend growth stocks.
Then there are the three in my portfolio that I worry about – NLY, ARCP, and FTR. I added these to my portfolio to juice my returns somewhat, and fully understanding that they were much further out on the risk spectrum than the rest of my portfolio. I knew that while these stocks would provide outsized dividends, they would also command an outsized amount of my attention and energy.
Of NLY, I always said to myself “if they cut the dividend in HALF, it would still be one of my highest-yielding stocks.” Well, they haven’t cut it in half (yet), and NLY still provides me a very nice income stream. And I am certainly not over-exposed to it – NLY is 3 percent of my dividend growth portfolio (but over 8 percent of my dividends!). On the other hand, even factoring in over a year’s worth of reinvested dividends, I am sitting on a small paper loss.
I am still up on my FTR experiment, but I figure that its demise is inevitable, so perhaps I should get out while I am still ahead. ARCP was bought without my usual diligence, and though its returns are good and future perhaps bright, I am down some in the name and eye it with some skepticism every time I look at my portfolio.
My inclination right now is to rein in each of these three names somewhat. I think I’m going to keep the NLY – it can remain a thoughtful piece of “calculated risk” in my portfolio. Though I might stop reinvesting the dividends and deploy the cash elsewhere, so that its size in my portfolio does not increase. I am leaning towards also stopping reinvestment in FTR and ARCP, and may sell them outright.
Does anyone have thoughts about NLY’s long-term prospects?
