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March 2019 Edition - suredividend.com · are in a period of historically low interest rates. W.P....
Transcript of March 2019 Edition - suredividend.com · are in a period of historically low interest rates. W.P....
Sure Retirement Newsletter
HIGH-YIELD, HIGH-QUALITY INVESTMENTS
March 2019 Edition
By Ben Reynolds, Nick McCullum, & Bob Ciura
Edited by Brad Beams
Published on March 10th, 2019
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Table of Contents Opening Thoughts – What To Do About Kraft Heinz – ........................................................... 3
Sell Recommendation: W.P. Carey (WPC) ............................................................................... 4
Sell Recommendation: Senior Housing Properties Trust (SNH) ............................................ 5
The Retirement Top 10 – March 2019 ........................................................................................ 6
Analysis of Top 10 Securities ....................................................................................................... 7
AbbVie Inc. (ABBV) .................................................................................................................. 7
Invesco Ltd (IVZ) ....................................................................................................................... 9
AT&T Inc. (T) .......................................................................................................................... 11
WestRock Co. (WRK) .............................................................................................................. 13
Energy Transfer LP (ET) .......................................................................................................... 15
Altria Grp. Inc. (MO) ................................................................................................................ 17
International Business Machines Corp. (IBM) ......................................................................... 19
Enterprise Products Partners LP (EPD) .................................................................................... 21
The Western Union Co. (WU) .................................................................................................. 23
Newell Brands Inc. (NWL) ....................................................................................................... 25
Closing Thoughts – Warren Buffett & Dividends – ................................................................ 27
List of Stocks by Retirement Suitability Score......................................................................... 28
List of Stocks by Sector .............................................................................................................. 33
Past Recommendations & Ranking Criteria, & Sells .............................................................. 39
Ranking Criteria ........................................................................................................................ 39
Sell Rules .................................................................................................................................. 39
Current Holds ............................................................................................................................ 40
Sold Positions............................................................................................................................ 41
Pending Sells ............................................................................................................................. 41
Buying & Ranking Criteria........................................................................................................ 42
Portfolio Building Guide ............................................................................................................ 43
Examples ................................................................................................................................... 43
Tax Guide .................................................................................................................................... 44
Corporations .............................................................................................................................. 45
Master Limited Partnerships (MLPs)........................................................................................ 46
Real Estate Investment Trusts (REITs)..................................................................................... 47
Business Development Companies (BDCs) ............................................................................. 48
Glossary of Common Terms & Acronyms ............................................................................... 49
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Opening Thoughts – What To Do About Kraft Heinz –
Kraft Heinz (KHC) reported fourth quarter and full year financial results on February 21st. This
month’s Opening Thoughts provides an update on the company's recent results and what to expect
moving forward.
Kraft Heinz’s actual results for the 4th quarter were subpar, slightly missing consensus expectations
on both the top and bottom lines. However, it was not the company's top and bottom-line financial
results that worried us. Instead, Kraft Heinz included three troubling announcements in its earnings
release.
The first announcement was Kraft Heinz's significant $15.4 billion write-down of goodwill and
intangible assets, which resulted in a net loss of $12.6 billion and a diluted loss per share of $10.34.
These write-downs were related to goodwill in the U.S. Refrigerated and Canada Retail segments,
as well as the Kraft and Oscar Mayer trademarks.
The second troubling component of Kraft Heinz's earnings release was the announcement of a SEC
investigation into the company's procurement accounting, which, according to the company,
includes “agreements, side agreements, and changes or modifications to its agreements with its
vendors.” After the request, the company recorded a $25 million increase to cost of goods sold.
This was an out-of-period correction and Kraft Heinz will not be restating its financial results, as
“the Company determined the amounts were immaterial to the fourth quarter of 2018 and its
previously reported 2018 and 2017 interim and year to date periods.”
By far the most troubling component of Kraft Heinz's earnings release was the company's dividend
cut. In conjunction with its earnings release, the company announced a dividend of $0.40 per
share, which represents a $0.225 reduction from its previous quarterly dividend of $0.625.
Overall, Kraft Heinz's fourth quarter earnings release has caused us to make significant revisions in
how we value the business. We were previously estimating fair value for Kraft Heinz at around 16
times earnings but are revising that estimate downwards to a price-to-earnings multiple of 11. Even
relative to this lower estimate, the company appears undervalued today. Kraft Heinz reported
adjusted earnings-per-share of $3.53 in fiscal 2018, which implies a current price-to-earnings ratio
of 9.1.
Overall, Kraft Heinz remains undervalued. Because of this, we recommend that investors
continue holding Kraft Heinz and wait to sell the security until its price approaches fair
value, which we estimate at around $39.
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Sell Recommendation: W.P. Carey (WPC)
We recommend selling securities with poor expected total returns and investing the proceeds into securities with better investment prospects ahead. W.P. Carey is offering investors expected total
returns of 4.6% annually over the next 5 years, just below our expectations of total returns for the S&P
500 in general. Additionally, W.P. Carey has a poor Dividend Risk score of D.
As a result, we are issuing a sell recommendation on W.P. Carey (WPC).
We first recommended W.P. Carey in the February 2017 edition of The Sure Retirement Newsletter.
Since that time the REIT has generated total returns of 36.4%1 versus 24.2% for the S&P 500 (as measured by the ETF SPY).
Our W.P. Carey investment has worked out favorably from a total return perspective, beating the
market by over 12 percentage points.
W.P. Carey’s funds from operations per unit (FFO/Unit) have actually declined since we recommended
the security, from $5.12 in 2016 to an expected FFO/Unit of $4.80 in fiscal 2019. Growth on a per unit
basis was certainly not the total return driver of this investment.
Dividends have certainly been beneficial, however. W.P. Carey had a dividend yield of 6.3% when we
originally recommended it. And it has increased its dividend since.
Valuation is where the bulk of returns have come from with W.P. Carey. Here’s what we wrote about
W.P. Carey’s valuation in the February 2017 edition of The Sure Retirement Newsletter:
“W.P. Carey’s median dividend yield since 1998 is 6.5% and its current dividend yield is 6.3%. We
are in a period of historically low interest rates. W.P. Carey appears to be undervalued today relative
to the market due to low interest rates. One would expect the company to trade for a yield noticeably
lower than its historical average considering today’s lower than average interest rates.”
Today, W.P. Carey has a dividend yield of 5.5%, which is below its historical average valuation
multiple. In other words, the security looks somewhat overvalued at current prices.
One of the major advantages of tracking expected total returns of our past recommendations is that we
can spot overvalued securities that should be sold to lock in gains. Note that if W.P. Carey’s price did
not rise, its expected total returns ahead would be significantly higher, and we would recommend
holding and collecting dividends instead of selling to lock in gains.
We were wrong about W.P. Carey’s growth potential; we expected growth of around 4% annually,
while the REIT’s FFO/unit has actually declined. But we were right about the safety of its distribution
and that it was undervalued.
Due to low expected total returns ahead at W.P. Carey from significant price appreciation, we
recommend investors sell now and reinvest the proceeds into one of this month’s Top 10.
1 Return data for the W.P. Carey analysis is from midday 3/8/19.
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Sell Recommendation: Senior Housing Properties Trust (SNH)
Our sell analysis on W.P. Carey was due to it appreciating in value and no longer offering attractive
expected total returns ahead. Senior Housing Properties Trust is a sell for a different reason. Namely,
we have become very concerned about the company’s ability to continue paying its dividend.
As a result, we are issuing a sell recommendation on Senior Housing Properties Trust (SNH).
We first recommended Senior Housing in the February 2018 edition of The Sure Retirement
Newsletter. Since that time the REIT has generated total returns of -18.3%2 versus 5.5% for the S&P 500 (as measured by the ETF SPY).
Our Senior Housing investment has worked out very poorly, significantly underperforming the S&P
500.
Senior Housing currently has an “F” Dividend Risk score. The company has virtually no margin for
error ahead with its dividend. The company earned $1.58 in adjusted FFO/Unit in fiscal 2018 (and in
fiscal 2017). Meanwhile, the company distributed $1.56 per share in fiscal 2018 for a payout ratio of 98.7%. With a payout ratio of nearly 100%, even a small business decline could result in a distribution
reduction.
And to make matters worse, the company’s management is not inspiring confidence that the dividend is a priority. In the trust’s most recent quarterly call, management was asked the following:
“And then just to get more color on the comment you made around risks to potential dividend
distribution. I mean it seems like, whether you adjust rents, you sell the asset, you convert RIDEA, you change structure there will have to be an adjustment to the dividend just from a sustainability
standpoint. Is that a fair comment?”
Rick Siedel, the trust’s CFO, responded as follows:
“I mean, Jennifer said in prepared remarks that changes to our agreements may negatively impact our
cash flows. And again, beyond that, we really can't comment on the potential theoretical outcomes that could possibly occur.”
Saying you “can’t comment on the potential theoretical outcomes” leaves much to be desired. We have
no faith that the distribution is sustainable at Senior Housing. As a result, we recommend investors sell at a loss ahead of a potential distribution cut.
While it is never fun (nor our aim) to sell at a loss, we can only act on the facts of today, not on our
original (incorrect) investment thesis in Senior Housing. We recommend selling Senior Housing
today and reinvesting the proceeds into one of this newsletter’s Top 10 recommendations.
2 Return data for this analysis is from midday 3/8/19.
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The Retirement Top 10 – March 2019
Name Type Price Fair
Value P/E Yield Payout Growth
AbbVie (ABBV) Stock $78 $113 9.1 5.4% 45% 9.5%
Invesco (IVZ) Stock $19 $26 8.2 6.2% 53% 5.0%
AT&T (T) Stock $30 $48 8.3 6.9% 57% 6.0%
WestRock (WRK) Stock $37 $54 8.1 4.9% 40% 4.0%
Energy Transfer (ET) MLP $15 $18 6.83 8.1% 60%4 3.0%
Altria Group (MO) Stock $55 $64 12.9 5.9% 80% 4.0%
IBM (IBM) Stock $135 $171 9.7 4.6% 49% 4.0%
Enterprise Products (EPD) MLP $28 $29 8.25 6.2% 63%6 4.0%
Western Union (WU) Stock $18 $23 9.5 4.5% 42% 1.0%
Newell Brands (NWL) Stock $16 $22 9.7 5.9% 58% 5.0%
Notes: The ‘Price’ column shows a recent price of the security. The ‘Fair Value’ column shows our estimate
of the company’s per-share fair value. The ‘P/E’ column typically uses forward earnings-per-share, FFO-per-
share, or DCF-per-share, depending on the security type. The ‘Payout’ column uses earnings, funds from
operations (FFO), or distributable cash flow (DCF) in the denominator. The numerator is the security’s
payment to its owners. The ‘Growth’ column shows our estimate of growth on a per share (or per unit) basis;
these estimates typically come from Sure Analysis Research Database reports.
Disclosures: Ben Reynolds is personally long the following from this month’s Top 10: ABBV, T, ET & NWL.
Nick McCullum is personally long T. Bob Ciura is personally long MO.
Two recommendations changed from last month’s Top 10. Western Digital (WDC) and People’s
United Financial (PBCT) were replaced by Enterprise Products (EPD) and Western Union (WU).
Remember: Securities that fall out of the Top 10 are holds, not sells.
The ranking criteria for the Top 10 list and requirements for inclusion in The Sure Retirement
Newsletter are derived from and The Sure Analysis Research Database.
An equal-weighted portfolio of the Top 10 has the following characteristics:
Payout Ratio: 55%
Dividend or Distribution Yield: 5.9%
Growth Rate: 4.6%
Note: Data for this newsletter was obtained between market open 3/6/19 through midday 3/8/19.
3 Using price-to-distributable-cash-flow. 4 Using distributable cash flow. 5 Using price-to-EBITDA. 6 Using distributable cash flow.
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Analysis of Top 10 Securities AbbVie Inc. (ABBV)
Overview & Current Events AbbVie is a pharmaceutical company focused on Immunology, Oncology, and Virology. AbbVie was spun off by Abbott Laboratories in 2013 and trades with a market capitalization of ~$119 billion.
Recently, AbbVie authorized (12/13/18) a $5 billion increase to the company’s existing share repurchase program, which represents nearly 4% of its market capitalization. This will help boost future earnings-per-share growth. Separately, AbbVie announced (1/4/19) a roughly $4 billion impairment charge related to the 2016 acquisition of Stemcentrx. The impairment is the result of the prior decision to stop enrollment for the TAHOE trial, which was a Phase 3 study evaluating Rova-T as a second-line therapy for advanced small-cell lung cancer.
Growth Prospects & Safety AbbVie’s share price has declined by nearly 30% in the past 12 months. Investors appear to be concerned over AbbVie’s future growth, in light of the competitive threats facing Humira. Humira represents approximately 61% of AbbVie’s annual sales. Humira is facing biosimilar competition in Europe, and AbbVie has had to significantly cut prices to retain business. On the company’s recent quarterly earnings call, CEO Rick Gonzalez acknowledged that discounting in Europe has been "on the higher end" of what the company expected, with Humira prices being slashed from 10%-80% depending on the country. Humira will face biosimilar competition in the U.S. starting in 2023.
Fortunately, AbbVie continues to perform well, and the company has a plan to continue on a growth trajectory. AbbVie reported fourth quarter revenue of $8.3 billion, up 7.4% from the fourth quarter of fiscal 2017. AbbVie is seeing growth outside Humira, including 42% growth for another potential blockbuster drug Imbruvica. Earnings-per-share increased 28% in the fourth quarter, and 41% in 2018. For the upcoming year, AbbVie expects earnings-per-share in a range of $8.65 to $8.75.
AbbVie operates with strong safety metrics. It has a manageable level of debt, with an interest coverage ratio above 9.0x for 2018. The company also has a dividend payout ratio of 45%, which indicates a secure dividend with room for continued increases even if earnings stall temporarily.
Valuation
Based on expected earnings-per-share of ~$8.70, AbbVie stock trades for a price-to-earnings ratio of 9.1. Our fair value estimate for AbbVie is a price-to-earnings ratio of 13.0, indicating the stock is significantly undervalued today. An expanding valuation multiple could boost shareholder returns by approximately 7.4% per year if the stock valuation expands to our fair value estimate over the next five years. In addition, we expect annual earnings growth of 9%-10% through 2024. Lastly, the stock has a current dividend yield of 5.4%, a very high yield resulting from both a declining share price, and the company’s high rate of dividend growth. In total, we expect annual returns of 22.3% per year over the next five years, making AbbVie one of our highest-ranking stocks in terms of expected return.
Key Statistics, Ratios, & Metrics Dividend Yield: 5.4% 10-Year Dividend Growth Rate: 17.8%7
Most Recent Annual Dividend Increase: 50.7% Sector: Health Care Dividend History: Increasing since 2013 Business Type: Corporation Ex-Dividend Date: 4/12/19 Payment Date: 5/15/19 Fair Value: $113 Payout Ratio: 44.5%
7 Since the 2013 spin-off.
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Invesco Ltd (IVZ)
Overview & Current Events Invesco is a global investment management firm. It has more than 7,000 employees and serves customers in more than 150 countries. Invesco trades with a market capitalization of $7.6 billion and has more than $930 billion of assets under management (AUM).
In late January, Invesco reported (1/30/19) financial results for the fourth quarter of fiscal 2018. In the quarter, the company generated revenues of $919 million, which represents a steep 8.2% decline over the same period a year ago. This troubling revenue decline was based on reductions in the company’s assets under management, which totaled $924 billion at the end of the fourth quarter – 0.7% less than its AUM in last year’s comparable period and 6.2% less than the end of 2018’s third quarter. The AUM decline is attributable to a combination of net market losses due to the equity market selloff that occurred in the fourth quarter of 2018 as well as $20 billion of net client outflows. We believe it is likely that these outflows were exacerbated by the overall drop in the equity markets.
On the bottom line, Invesco generated earnings-per-share of $0.44 during the fourth quarter, which was 40% less than Invesco’s earnings-per-share during the previous year’s quarter. The tremendous hit to the company’s bottom line was the result of lower revenues and a contraction in the company’s margins. The markets seemed generally disappointed in Invesco’s earnings release.
Invesco reported January AUM of $930.6 billion, up 4.8% from the previous month. A return to AUM growth was due to favorable market returns, foreign exchange, higher money market AUM and reinvested distributions.
Growth Prospects & Safety Invesco is investing heavily in growth, mainly through acquisitions. The company is acquiring OppenheimerFunds for ~$5.5 billion at current prices. The deal is for $4 billion in preferred shares and 81.9 million Invesco shares. This acquisition is expected to close in the second quarter of 2019 and
boost earnings-per-share by ~18% in 2019. Earlier this year, Invesco acquired the ETF business from Guggenheim Investments for $1.2 billion. Invesco also made a significant investment in financial technology with its acquisition of Intelliflo, a leading technology platform for financial advisors that supports approximately 30% of all financial advisors in the U.K. Overall, we conservatively expect 5% earnings growth annually for Invesco over the next five years.
Invesco ranks well in terms of dividend safety with an expected payout ratio just over 50% for fiscal 2019. Invesco also has a strong balance sheet, with a credit rating of ‘A’ from Standard & Poor’s.
Valuation
Invesco stock trades for a price-to-earnings ratio of 8.2 based on expected earnings-per-share of $2.34 for 2019. We believe a fair valuation for Invesco is a price-to-earnings ratio of 11. This gives us a fair value target of $26 for this asset management business. A rising valuation could add approximately 6.1% to the annual returns of the stock if mean reversion were to occur over the next 5 years. In addition, returns will benefit from earnings growth (5%), as well as the 6.2% dividend yield. In total, we believe Invesco could potentially deliver total returns of 17.3% per year over the next 5 years.
Key Statistics, Ratios, & Metrics
Dividend Yield: 6.2% 10-Year Dividend Growth Rate: 11.6%
Most Recent Annual Dividend Increase: 3.4% Sector: Financial Dividend History: Increasing since 2009 Business Type: Corporation Ex-Dividend Date: 5/10/19 (est.) Payment Date: 6/1/19 (est.) Fair Value: $26 Payout Ratio: 52.6%
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Invesco Ltd. (IVZ) Dividend Yield History
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AT&T Inc. (T) Overview & Current Events
AT&T is one of the largest telecommunications companies in the United States when measured by market capitalization ($218 billion). Its only competitor of similar size is Verizon Communications
($231 billion). AT&T provides Internet, television, wireless, and digital entertainment services in both the United States and worldwide.
In late January, AT&T reported (1/30/19) fourth quarter and full year 2018 results for the period ending December 31st, 2018. For the fourth quarter, the company generated $48.0 billion in revenue, up
15.2% from the year ago period, primarily driven by the Time Warner acquisition. Adjusted earnings-per-share totaled $0.86 against $0.78 previously. For the year, AT&T reported revenue of $170.8 billion, up 6.4% as compared to 2017. Adjusted earnings-per-share came in at $3.52 versus $3.05 in 2017, again driven by the acquisition, along with lower tax rates associated with tax reform.
AT&T also provided its outlook for 2019. The company anticipates free cash flow to be in the $26 billion range, with low single-digit adjusted EPS growth. The dividend payout ratio is anticipated to be
below 60% and end-of-year net debt to adjusted EBITDA in the 2.5x range. Shares opened 5% lower on the news.
Growth Prospects & Safety
AT&T has recently executed two sizeable acquisitions – DirecTV and Time Warner – in an attempt to improve its growth profile. Indeed, the company’s 10-year annualized earnings-per-share growth rate
of 5.4% leaves something to be desired. Fortunately, we believe that these new higher-margin businesses will allow AT&T to grow at a faster pace moving forward. We are anticipating annualized earnings-per-share growth of ~6% per year for the foreseeable future.
AT&T scores extraordinarily well in terms of dividend safety, particularly relative to the company’s
exceptionally high yield. To start, the company has increased its dividend for 35 consecutive years, which qualifies it to be a member of the Dividend Aristocrats Index. Separately, AT&T is on pace for a dividend payout ratio of just 57% in the ongoing fiscal year. While some investors have expressed
concerns with AT&T’s debt, the company reported a more-than-adequate interest coverage ratio of 3.3x in fiscal 2018 (composed of $26.1 billion of operating income and $8.0 billion of interest expense). Importantly, AT&T plans to deleverage over the next several years.
Valuation
AT&T’s management team expects the company to generate adjusted earnings-per-share of about
$3.60 in fiscal 2019. Using this earnings estimate, the company is trading at a price-to-earnings ratio of just 8.3. AT&T traded at an average price-to-earnings ratio of 13.4 over the last decade. If AT&T’s price-to-earnings ratio can expand to its 10-year average over the next 5 years, this will boost its total
returns by around 10.1% per year during this time period. Overall, we believe that AT&T is capable of delivering annualized returns of more than 22% per year from its current price thanks to its high yield (6.9%), earnings growth (6%), and compelling potential for valuation expansion.
Key Statistics, Ratios & Metrics
Dividend Yield: 6.9% 10-Year Dividend Growth Rate: 2.2%
Most Recent Annual Dividend Increase: 2.0% Sector: Telecommunications
Dividend History: 35 years of increases Business Type: Corporation Ex-Dividend Date: 4/9/19 (est.) Payment Date: 4/10/19 (est.) Fair Value: $48 Payout Ratio: 56.7%
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WestRock Co. (WRK)
Overview & Current Events
WestRock Company was formed in July 2015 by the merger of Rock-Tenn and MeadWestvaco. Today, it is a leading provider of paper and packaging solutions. It operates two major segments: Corrugated Packaging (55% of revenue) and Consumer Packaging (45% of revenue). WestRock has a
market capitalization of approximately $9.6 billion.
In early November, WestRock reported (11/5/18) its financial results for fiscal 2018. WestRock grew revenue by 10% and adjusted earnings-per-share by 56%, driven by strong performance in the
corrugated packaging segment which benefited from increased volumes and price increases.
In late January (1/31/19) WestRock reported fiscal 2019 first quarter results. Net sales increased
14.5% for the quarter, mainly due to a recent acquisition as well as a favorable product mix. However, adjusted earnings-per-share declined 4.6% for the quarter, as revenue growth was more than offset by cost inflation and a negative impact on production caused by hurricanes.
Growth Prospects & Safety
WestRock will pursue future growth both organically and with acquisitions. For example, last November (11/3/18) WestRock completed the acquisition of KapStone Paper for $4.9 billion including
KapStone’s debt. The acquisition of KapStone enhanced WestRock’s product offerings and geographical reach. However, it also saddled WestRock with higher debt. The deal increased WestRock’s net-debt-to-EBITDA ratio to 3.9x. The company has set a goal to reduce the leverage
ratio to a range of 2.25x to 2.50x this year.
Debt reduction will help improve WestRock’s dividend safety, and cost cuts will help achieve deleveraging. Integration synergies are expected to produce $200 million in annual cost reductions by 2021. Assuming WestRock achieves its debt reduction goal, the dividend appears secure. WestRock
has an expected dividend payout ratio of 40% for fiscal 2019. This should provide enough room for
modest dividend increases to continue in the years ahead.
Valuation
WestRock is expected to generate earnings-per-share of $4.60 for 2019. Based on this, the stock trades for a price-to-earnings ratio of 8.1. Since the 2015 merger, WestRock shares have held an average price-to-earnings ratio of 16.8; however, our fair value estimate is a price-to-earnings ratio of 12.5.
Our fair value estimate is based on the company’s elevated debt and challenged earnings growth.
Still, shares of WestRock appear to be significantly undervalued, and an expansion of the price-to-earnings ratio could boost annual returns by 9.1% per year over the next five years. In addition, we expect the company to report 4.0% annual earnings growth through 2024. Lastly, the stock has a
current dividend yield of 4.9%. In total, we expect annual returns of 18% per year for WestRock over
the next five years.
Key Statistics, Ratios, & Metrics
Dividend Yield: 4.9% 10-Year Dividend Growth Rate: 5.7%8 Most Recent Annual Dividend Increase: 5.8% Sector: Consumer Goods Dividend History: Increasing since 2016 Business Type: Corporation Ex-Dividend Date: 5/3/19 (est.) Payment Date: 5/14/19 (est.)
Fair Value: $54 Payout Ratio: 40.2%
8 Since the 2015 merger.
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Energy Transfer LP (ET) Overview & Current Events
Energy Transfer is an energy Master Limited Partnership (MLP). It is the second-largest midstream
MLP based on market capitalization (behind fellow newsletter recommendation Enterprise Products Partners) and the largest based on enterprise value. On October 19th of 2018, Energy Transfer Equity
LP (previously ETE) and Energy Transfer Partners LP (previously ETP) announced the completion of
a merger with ETE acquiring all of the outstanding units of ETP. The new entity trades with the ticker
“ET.” Energy Transfer has a gathering capacity of 12.8 million Btu/day of gas and a transportation
capacity of 22 million Btu/day of natural gas and 4.3 million barrels per day of oil.
In early November, Energy Transfer reported (11/7/18) third quarter results. Net income attributable to
partners was $371 million, up 47% compared to the year ago period, and adjusted EBITDA was $2.58
billion, up 30%. Distributable Cash Flow (DCF) was $1.38 billion on a pro forma basis, up 27% year-over-year. For the quarter, on a per-unit basis adjusted EBITDA increased 27% to $0.97, while DCF-
per-unit increased 34% to $0.50.
Growth Prospects & Safety
Energy Transfer has an attractive lineup of new projects which will fuel the company’s growth. For example, Energy Transfer announced it will construct a seventh natural gas liquids (NGL) fractionation
facility at Mont Belvieu, Texas, with 150,000 barrels per day of capacity. Fractionator VII is
scheduled to be operational in the first quarter of 2020 and is fully subscribed by multiple long-term
contracts. We expect Energy Transfer to grow distributable cash flow by 3% per year through 2024.
Energy Transfer reported a distribution coverage ratio of 1.73x in the most recent quarter and 1.68x
through the first nine months of fiscal 2018. The latter figure is equivalent to a cash flow dividend
payout ratio of 60%. Energy Transfer’s distribution payments appear secure for the foreseeable future.
In addition, Energy Transfer has been actively paying down debt. Prior to the merger, ETP was able to reduce its debt-to-adjusted-EBITDA ratio down from 5.5x in the first quarter of 2017 to 4.1x in the
second quarter of 2018. Separately, Moody’s revised the combined entity’s credit rating to Baa3
investment grade (stable) and the partnership has told investors that it anticipates funding the majority
of its growth capex with retained cash flow moving forward.
Valuation
We believe that Energy Transfer is capable of delivering distributable cash flow per share of around
$2.20 in fiscal 2019. Using this estimate, the company is trading at a price-to-DCF ratio of 6.8. We
believe fair value for Energy Transfer is a price-to-DCF ratio of 8, which gives a fair value estimate of
$18. If the company’s valuation multiple expands to a price-to-DCF of 8 over the next five years, this
will boost its total returns by 3.3% per year during this time period.
Energy Transfer trades with an appealing 8.1% distribution yield and the partnership is likely to
compound its per-unit intrinsic value at about 3% per year over full economic cycles. All together, we
believe Energy Transfer can deliver long-term total returns of 14.4% per year over the next 5 years.
Key Statistics, Ratios, & Metrics
Distribution Yield: 8.1% 10-Year Distribution Growth Rate: N/A
Most Recent Annual Distribution Increase: N/A Sector: Energy
Distribution History: N/A Business Type: MLP Ex-Distribution Date: 5/4/19 (est.) Payment Date: 5/21/19 (est.) Fair Value: $18 Payout Ratio: 60%
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Altria Grp. Inc. (MO)
Overview & Current Events
Altria Group is a tobacco products giant. Its core tobacco business holds the flagship Marlboro cigarette brand. Altria also has non-smokable brands Skoal and Copenhagen chewing tobacco, Ste. Michelle wine, and owns a 10% investment stake in global beer giant Anheuser Busch Inbev.
In late January (1/31/19) Altria reported fourth quarter and full year earnings. Revenue net of excise
taxes increased 1.5% to $4.8 billion, missing expectations by $20 million. Adjusted earnings-per-share of $0.95 increased 4.4% from the same quarter a year ago. Net revenue increased 0.4% in the core
smokable products segment as price increases more than offset the impact of falling shipment volumes.
After adjusting for trade inventory movements, Altria’s cigarette shipment volume declined by 5.5%, worse than the estimated industry decline of 5.0%. The company managed its earnings growth primarily due to revenue growth, share repurchases, and a lower tax rate.
Growth Prospects & Safety
Altria has a positive growth outlook although it does face a significant risk in the years ahead; the declining U.S. smoking rate. In response to this consumer trend, Altria has invested heavily in new
products that appeal to changing consumer preferences. Altria recently announced a $1.8 billion investment in Canadian marijuana producer Cronos Group. Altria purchased a 45% equity stake in the company, as well as a warrant to acquire an additional 10% ownership interest in Cronos Group at a
price of C$19.00 per share, exercisable over four years from the closing date. Altria will help Cronos accelerate its research and development capabilities.
Separately, Altria announced it will invest $12.8 billion in e-vapor manufacturer JUUL Labs for a 35% equity stake in the company, valuing JUUL at $38 billion. It appears likely from the JUUL investment that Altria will discontinue its own e-cigarette brand MarkTen. In light of these investments, Altria
announced a cost-cutting program designed to reduce annual expenses by $500 to $600 million.
Altria receives top marks in terms of safety, due to its competitive advantages. It operates in a highly regulated industry, which significantly reduces the threat of new competitors entering the market. And, Altria’s products enjoy tremendous brand loyalty, as Marlboro controls more than 40% of U.S. retail
market share. Altria is also highly resistant to recessions. Cigarette and alcohol sales fare very well during recessions, which keeps Altria’s strong profitability and dividend growth intact.
Valuation
Altria stock trades for a price-to-earnings ratio of 12.9, which is significantly below the 10-year average of 16.2. Our fair value estimate is now a price-to-earnings ratio of 15.0, a slight reduction in light of Altria’s most recent quarterly results. Still, Altria stock appears undervalued. An expanding
valuation could boost shareholder returns by 4.7% per year. In addition, we now expect 4% annual earnings growth for Altria through 2024, down from previous expectations as we acknowledge Altria’s heightened spending on growth. Nevertheless, Altria has a high dividend yield of 5.9%, and a high
total expected return of 14.6% per year over the next five years.
Key Statistics, Ratios, & Metrics
Dividend Yield: 5.9% 10-Year Dividend Growth Rate: 9.6%
Most Recent Annual Dividend Increase: 21% Sector: Consumer Goods Dividend History: 53 increases in the past 49 years Business Type: Corporation Ex-Dividend Date: 3/22/19 Payment Date: 4/30/19
Fair Value: $64 Payout Ratio: 80%
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International Business Machines Corp. (IBM) Overview & Current Events
IBM is a large multinational information technology company founded over 107 years ago, with a market capitalization of $120 billion. IBM has six reporting divisions: Cognitive Solutions, Global
Business Solutions, Technology Services & Cloud Platforms, Systems, Global Financing, and Other.
In late January, IBM reported (1/22/19) fourth quarter financial results, delivering a beat on both the top and bottom lines. Revenue of $21.8 billion beat analyst estimates by $30 million, while adjusted earnings-per-share of $4.87 beat by $0.05. Revenue declined 3.5% from the same quarter last year,
continuing a concerning trend. Global Business Services and Cognitive Solutions posted revenue growth of 2% and 6%, respectively. Technology Services & Cloud Platforms was flat for the quarter. Growth was more than offset by declines of 9% in Global Financing and 20% in Systems. However, IBM shares rose 4% in after-hours trading following the announcement.
Before that, in late October (10/29/18) IBM announced it will acquire Red Hat Inc. for $190 per share, representing a total enterprise value of $34 billion. Red Hat generates annual revenue of about $3
billion and operates in the open-source software market, primarily distributing technology products used in data centers. IBM made the deal to boost its cloud platform, which is one of its most important growth areas. IBM expects the acquisition will be accretive to earnings within 12 months of closing.
Growth Prospects & Safety
IBM is investing heavily for growth and is finally seeing a return on its investment. IBM’s Strategic Imperatives, which include the cloud, open source, analytics, and data; collectively grew revenue by
9% in the past 12 months. Total cloud revenue increased 12% to $19.2 billion in that time. Red Hat will further expand the company’s cloud infrastructure. Overall, we expect 4% annual earnings growth through 2023. There is a good chance IBM can return to growth. The company received the most
patents of any U.S. company in 2018, for the 26th year in a row. IBM received 9,100 patents across artificial intelligence, cloud computing, and cybersecurity, which are its most promising growth areas.
IBM ranks highly in terms of dividend safety. The company is projected to have a dividend payout ratio below 50% for 2019, which leaves plenty of room for annual dividend increases moving forward. Moreover, IBM’s interest coverage ratio has consistently exceeded 20x over the last decade. IBM’s
credit rating was cut at S&P Global after the Red Hat acquisition on debt concerns, but the company still maintains a strong rating of ‘A.’ IBM had $12.2 billion of cash at the end of the fourth quarter.
Valuation
Based on expected earnings-per-share of $13.90 in fiscal 2018, IBM stock holds a current price-to-earnings ratio of 9.7. Our fair value share price for IBM is $171 and a price-to-earnings ratio of 12.3,
equal to its average price-to-earnings ratio over the past 10 years. If its stock valuation increases to the
fair value estimate, the corresponding multiple expansion would generate annual returns of 4.9% if they occurred over a 5-year period. In addition, 4% expected annual earnings growth and the 4.6% dividend yield bring total expected returns to 13.5% per year over the next five years.
Key Statistics, Ratios & Metrics
Dividend Yield: 4.6% 10-Year Dividend Growth Rate: 12.1%
Most Recent Annual Dividend Increase: 4.7% Sector: Technology
Dividend History: 23 years of increases Business Type: Corporation Ex-Dividend Date: 5/7/19 (est.) Payment Date: 6/9/19 (est.) Fair Value: $171 Payout Ratio: 48.9%
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Enterprise Products Partners LP (EPD)
Overview & Current Events Enterprise Products Partners is the largest energy Master Limited Partnership (MLP), based on market capitalization. Enterprise Products is a midstream MLP, with services including storage and transportation of oil and gas. Enterprise Products Partners’ assets include approximately 50,000 miles of pipelines, 260 million barrels of storage capacity for NGL (Natural Gas Liquids), crude oil, and other refined products; and 14 billion cubic feet of natural gas storage capacity.
In late January (1/31/19) Enterprise Products reported fourth quarter and full year 2018 financial results. For the fourth quarter, revenue of $9.2 billion increased 9% from the year-ago quarter, primarily due to strong volume growth. In 2018, liquid pipeline volumes increased 9%, natural gas pipeline volumes increased 12%, marine terminal volumes increased 12%, NGL fractionation volumes increased 14%, and propylene plant production volumes increased 23%. Distributable cash flow increased 29% for the fourth quarter and 33% for the full year. Last year was a highly successful one for Enterprise Products. The partnership established 23 operational and financial records in 2018.
Growth Prospects & Safety Enterprise Products Partners’ future growth will come from new projects. For example, Enterprise Products has started construction of the Mentone cryogenic natural gas processing plant in Texas, which will have the capacity to process 300 million cubic feet per day of natural gas and extract more than 40,000 barrels per day of natural gas liquids. The facility is expected to begin service in the first quarter of 2020. Also expected to begin service in 2020 is the Shin Oak NGL Pipeline, which will have total capacity of 600,000 barrels per day. Exports are another growth catalyst. Demand for liquefied petroleum gas and liquefied natural gas, or LPG and LNG respectively, is growing at a high rate across the world, particularly in Asia. Enterprise Products’ total crude oil, NGL, petrochemical, and refined products exports currently exceed 1.6 million barrels per day.
Overall, we expect 4% annualized growth from Enterprise Products Partners over full economic cycles. Enterprise Products Partners is likely the safest MLP in our investment universe. The partnership sports an investment-grade credit rating of BBB+ from Standard & Poor’s and Baa1 from Moody’s, higher than the majority of MLPs. Its distribution safety is also very strong. The partnership reported a distribution coverage ratio of 1.5x in 2018.
Valuation
Enterprise Products Partners traded at an average price-to-EBITDA ratio of 8.8 over the last decade. With that said, this time period also includes the Great Recession, a difficult time period that saw the company’s EBITDA multiple decline heavily. Between 2011 and 2017, a more normal operating environment, the MLP traded with an EBITDA multiple of 11.2. The partnership’s price-to-EBITDA multiple is 8.2 today. If Enterprise Products Partners’ EBITDA multiple can revert to its long-term average over the next 5 years, this will boost its total returns by 1.4% per year. Overall, we believe Enterprise Products is capable of delivering annualized returns of 11.6%, composed of distribution payments (6.2%), per-unit EBITDA growth (4%), and valuation expansion (1.4%).
Key Statistics, Ratios, & Metrics
Distribution Yield: 6.2% 10-Year Distribution Growth Rate: 5.7%
Most Recent Annual Distribution Increase: 2.4% Sector: Energy Distribution History: 20 years of increases Business Type: MLP Ex-Distribution Date: 4/27/19 (est.) Payment Date: 5/8/19 (est.) Fair Value: $29 Payout Ratio: 62.5%
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The Western Union Co. (WU) Overview & Current Events
The Western Union Company is the world leader in the business of domestic and international money
transfers. The company has a network of approximately 500,000 agents globally, with a presence in
more than 200 countries. Western Union operates three business segments: Consumer-to-Consumer
(C2C), Business Solutions, and Other (bill payments in the U.S. and Argentina). Approximately 80% of revenue is from C2C, 7% from Business Solutions and 13% from Other.
In early February, Western Union reported (2/7/19) fourth quarter and full year financial results.
Earnings-per-share (EPS) of $0.48 were in line with estimates while revenue of $1.4B missed
estimates. Revenue declined 3% but increased 2% on a constant currency basis. The company
continues to be negatively affected by high levels of inflation in Argentina. In C2C, transactions
increased 4% but revenue declined 1%. The company is gaining traction in its Westernunion.com C2C
effort, with 25% transaction growth.
For 2018, revenue increased 1% to $5.59B and diluted EPS were $1.87. Notably, this was $0.01 below
increased guidance provided in Q3 2018. The number of total transactions grew from 276M in 2017 to 285M in 2018 for C2C and operating margins increased 40 bps to 23.5%. The C2C business is the core
of the company’s business. The remaining two business lines have operating margins in the mid-
single-digits. Furthermore, Western Union benefited from a much lower effective tax rate of 14.1%
due to the U.S. Tax Reform Act with a full year tax expense of $139M versus $905M in the prior year. The company returned $741M through $342M in dividends and $399M in share buybacks.
Growth Prospects & Safety
Western Union has industry leadership in the world of international money transfers. With that said,
the company’s high market share and heightened competition means that its growth prospects are
limited. We believe that disciplined capital allocation should allow the company to overcome these
headwinds. More specifically, Western Union has historically been a very disciplined repurchaser of
company stock. The company’s share count has declined by 4.6% per year over the last decade. To be
conservative, we are forecasting 1% annualized growth in earnings-per-share moving forward.
Western Union is on pace for a payout ratio of ~42% in 2019 and has an investment-grade BBB rating
from Standards & Poor’s. The company is quite recession-resistant; in the 2007-2009 financial crisis,
Western Union’s earnings-per-share rose each year, expanding from $1.11 in 2007 to $1.42 in 2010.
Valuation
Western Union is likely to generate adjusted earnings-per-share of $1.89 in fiscal 2019. Using this
estimate, the company is trading at a current price-to-earnings ratio of 9.5. Our fair value estimate for
Western Union is a price-to-earnings ratio of 12. If the company’s valuation expands to our fair value
estimate, the company’s total returns would be boosted by 4.8% per year during this time period. Add
this figure to the company’s dividend yield (4.5%) and growth prospects (1%), and Western Union’s total returns are estimated to reach 10.3% per year over the next five years.
Key Statistics, Ratios & Metrics
Dividend Yield: 4.5% 10-Year Dividend Growth Rate: 29.0%
Most Recent Annual Dividend Increase: 5.3% Sector: Financial Services
Dividend History: 10 years of increases Business Type: Corporation
Ex-Dividend Date: 3/14/19 Payment Date: 3/29/18
Fair Value: $23 Payout Ratio: 42.3%
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Newell Brands Inc. (NWL)
Overview & Current Events
Newell Brands is a consumer products manufacturer. Its core brands include Rubbermaid, Oster, Sunbeam, Mr. Coffee, Ball, Sharpie, Paper Mate, Elmer’s, Yankee Candle, and Coleman. Newell is in a major restructuring. The company is selling off under-performing brands that are no longer a part of its future growth strategy. For example, Newell has already sold the Waddington and Rawlings brands, as well as Goody Products. More recently, Newell sold its Pure Fishing and Jostens brands for $2.5 billion of after-tax proceeds. It also sold its Rexair business for an undisclosed sum and is currently soliciting bids for the United States Playing Card Co., which could raise as much as $200 million.
In mid-February (2/15/19) Newell reported fourth quarter and full year financial results. Total sales were down 6% in the fourth quarter, due to the adoption of a new revenue recognition standard, in addition to a negative impact from foreign exchange. Core sales were down just 1.2%, although the company’s reporting segments did post sequential improvements in sales. Adjusted gross margins rose 170bps to 34.7% of revenue during the quarter thanks to productivity gains, better pricing, lower integration costs, and lower restructuring costs; and were partially offset by higher raw materials and transportation costs. Overall, Newell’s adjusted earnings-per-share increased 4.4% for the fourth quarter. For 2018, core sales declined 5.2%, while adjusted earnings-per-share declined 2.5% to $2.68.
Growth Prospects & Safety
Management guided for $1.50 to $1.65 in earnings-per-share for 2019. This shows the impact of the divestitures. But once the product portfolio transformation is complete, the company’s new assortment of brands should provide long-term revenue growth and higher profit margins. We see annual earnings-per-share bottoming in 2019 with growth of 5.0% on average over the next five years, comprised of margin improvements and share repurchases offsetting lost revenue from divestitures.
Newell Brands has a number of qualities that boost its safety. The company is using a significant amount of the divestment proceeds to pay down debt and improve its balance sheet. Newell repaid $2.6 billion of debt in the fourth quarter, ending 2018 with a healthier leverage ratio of 3.5x. Newell also has durable competitive advantages, namely its strong brand portfolio. Its brands hold leadership positions across their respective categories, which provides the company with growth potential and pricing power. Newell’s dividend payout appears to be secure. The company’s anticipated payout ratio for 2019 is 58%, which indicates a sustainable dividend.
Valuation
Based on expected earnings-per-share of $1.60 for 2019, Newell shares trade for a low price-to-earnings ratio of 9.7. This is well below our fair value estimate, which is a price-to-earnings ratio of 14 for a fair value price of $22 per share. A price-to-earnings ratio of 14 is a more reasonable valuation for a profitable company with leading brands. Reversion to the fair value estimate over the next 5 years would yield annual returns of 7.6% annually. In addition, the stock has a 5.9% dividend yield, and is expected to produce 5.0% annual earnings growth. As a result, total returns are expected to reach 18.5% annually over the next five years.
Key Statistics, Ratios, & Metrics
Dividend Yield: 5.9% 10-Year Dividend Growth Rate: 0.9%
Most Recent Annual Dividend Increase: 21% Sector: Consumer Goods Dividend History: Steady or increasing since 2009 Business Type: Corporation Ex-Dividend Date: 5/30/19 (est.) Payment Date: 6/15/19 (est.) Fair Value: $22 Payout Ratio: 58.4%
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Closing Thoughts – Warren Buffett & Dividends –
Warren Buffett’s Berkshire Hathaway (BRK.A) famously does not pay a dividend. In fact,
Berkshire has paid only 1 dividend of $0.10 per share way back in 1967. Buffett jokingly said of
that dividend payment: “I must have been in the bathroom when the decision was made.”
While Berkshire does not pay a dividend, Warren Buffett certainly invests Berkshire’s money into
dividend paying stocks. In fact, all of Berkshire’s 10 largest holdings – which make up 79% of
Berkshire’s stock portfolio – pay dividends.
Of Berkshire’s 10 largest holdings, 4 have dividend yields of 3% or greater:
• Kraft Heinz (KHC) has a 4.9% yield
• Wells Fargo (WFC) has a 3.6% yield
• Coca-Cola (KO) has a 3.5% yield
• J.P. Morgan Chase (JPM) has a 3.1% yield
Buffett likely invests his money into dividend paying stocks for the same reason he does not pay a
dividend at Berkshire himself. That is, Buffett’s empire is built on getting ever-increasing of sums
of money for him to invest.
Paying a dividend at Berkshire takes money away from Buffett that he could have otherwise
invested. And receiving dividend income from stock holdings gives Buffett more money to invest
elsewhere. This is likely one of the reasons Buffett is so fond of insurance – he gets to invest
insurance float (premium revenue received that has not been paid out in claims) which is acquired
for free or at a profit when an insurance operation’s claims are less than premium revenue.
These cash flow lessons are applicable to those of us with less wealth than Warren Buffett (which
is everyone except Bill Gates and Jeff Bezos). By reducing expenses where you can and increasing
your savings rate, you can put more money into investments that are likely to pay you more over
time. As your income stream from your investments grows, so does your ability to put more money
to work in your investment account, creating a virtuous cycle.
Securities that pay high yields and have solid expected total return potential (like the Top 10 in this
newsletter) can provide a double benefit of both share price appreciation for capital gains and high
current income.
In investing, retirement planning, and business, cash flows are what matters most. This is a fact
Warren Buffett appears to view as useful looking at the construction of his portfolio and the
operations of his businesses. And that’s the beauty of high-yielding stocks; they generate actual
cash for investors, whether you are Warren Buffett or just a ‘regular’ investor.
Thanks,
Ben Reynolds
The next newsletter publishes on Sunday, April 14th, 2019
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List of Stocks by Retirement Suitability Score
Each of the securities in The Sure Analysis Research Database are grouped according to
Retirement Suitability Score and sorted (from highest to lowest) by Expected Total Returns.
Dividend or Distribution Yield is included next to each security’s ticker symbol. The Retirement
Suitability Score is a combination of the Dividend Risk Score and the security’s Distribution
or Dividend Yield. You can learn more about how the score is calculated at The Sure Analysis
Glossary.
Note: Check The Sure Analysis Research Database for the most up-to-date Retirement Suitability
Scores and Distribution or Dividend Yields.
A-Rated Retirement Suitability Stocks 1. AbbVie Inc. (ABBV): 5.4%
2. Walgreens Boots Alliance Inc. (WBA): 2.8%
3. Vermilion Energy Inc. (VET): 7.9%
4. Invesco Ltd (IVZ): 6.2%
5. The Bank of Nova Scotia (BNS.TO): 4.8%
6. AT&T Inc. (T): 6.8%
7. Cardinal Health Inc. (CAH): 3.8%
8. WestRock Co. (WRK): 4.7%
9. Eaton Vance Corp. (EV): 3.4%
10. CVS Health Corp. (CVS): 3.6%
11. Energy Transfer LP (ET): 8.2%
12. Altria Grp. Inc. (MO): 6.1%
13. Western Digital Corp. (WDC): 3.9%
14. Canadian Imperial Bank of Commerce (CM): 5%
15. Enbridge Inc. (ENB): 6.3%
16. International Business Machines Corp. (IBM): 4.6%
17. The Kraft Heinz Co. (KHC): 4.8%
18. T. Rowe Price Grp. Inc. (TROW): 3.1%
19. Fortis Inc. (FTS.TO): 3.8%
20. Hospitality Properties Trust (HPT): 7.9%
21. National Bank of Canada (NA.TO): 4.2%
22. Enterprise Products Partners LP (EPD): 6.2%
23. Target Corp. (TGT): 3.4%
24. Chevron Corp. (CVX): 3.9%
25. The Western Union Co. (WU): 4.4%
26. People's United Financial Inc. (PBCT): 4%
27. Community Trust Bancorp Inc. (CTBI): 3.4%
28. Illinois Tool Works Inc. (ITW): 2.8%
29. Leggett & Platt Inc. (LEG): 3.3%
30. Federal Realty Inv. Trust (FRT): 3%
31. International Paper Co. (IP): 4.3%
32. Bed Bath & Beyond Inc. (BBBY): 4.1%
33. Archer-Daniels-Midland Co. (ADM): 3.3%
34. Exxon Mobil Corp. (XOM): 4.1%
35. United Bankshares Inc. (UBSI): 3.5%
36. Johnson & Johnson (JNJ): 2.6%
37. Infosys Ltd (INFY): 3.1%
38. Kimberly-Clark Corp. (KMB): 3.5%
39. WEYCO Grp. Inc. (WEYS): 3.2%
40. Emerson Electric Co. (EMR): 2.9%
41. Genuine Parts Co. (GPC): 2.8%
42. 3M Co. (MMM): 2.8%
43. Franklin Resources Inc. (BEN): 3.2%
44. RPM Intl. Inc. (RPM): 2.4%
45. Universal Corp. (UVV): 5.1%
46. The Procter & Gamble Co. (PG): 2.9%
47. The Coca-Cola Co. (KO): 3.5%
48. Consolidated Edison Inc. (ED): 3.6%
B-Rated Retirement Suitability Stocks 1. AmeriGas Partners LP (APU): 13.9%
2. Compass Diversified Holdings (CODI): 9%
3. Bank OZK (OZK): 2.5%
4. GameStop Corp. (GME): 13.1%
5. Micro Focus Intl. plc (MFGP): 4.8%
6. Sunoco LP (SUN): 11.1%
7. Suburban Propane Partners LP (SPH): 11.1%
8. Ameriprise Financial Inc. (AMP): 2.8%
9. Brookfield Property REIT Inc. (BPR): 6.8%
10. British American Tobacco plc (BTI): 7%
11. Vodafone Grp. Plc (VOD): 9.9%
12. Newell Brands Inc. (NWL): 5.8%
13. Magellan Midstream Partners LP (MMP): 6.6%
14. Caterpillar Inc. (CAT): 2.5%
15. Brookfield Property Partners LP (BPY): 6.8%
16. United Parcel Service Inc. (UPS): 3.5%
17. Canadian Natural Resources Ltd (CNQ.TO): 3.7%
18. AmerisourceBergen Corp. (ABC): 2%
19. Royal Dutch Shell plc (RDS.B): 5.9%
20. HNI Corp. (HNI): 3.1%
21. ABB Ltd (ABB): 4.3%
22. Imperial Oil Ltd (IMO): 2.1%
23. Targa Resources Corp. (TRGP): 8.8%
24. Holly Energy Partners LP (HEP): 9.3%
25. Nordstrom Inc. (JWN): 3.3%
26. Total SA (TOT): 5%
27. MSC Industrial Direct Co. Inc. (MSM): 3%
28. Siemens AG (SIEGY): 4%
29. Imperial Brands plc (IMBBY): 7.1%
30. Omega Healthcare Investors Inc. (OHI): 7.4%
31. Kellogg Co. (K): 4.1%
32. Royal Bank of Canada (RY.TO): 3.9%
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33. HP Inc. (HPQ): 3.3%
34. Gilead Sciences Inc. (GILD): 3.9%
35. H&R Block Inc. (HRB): 4.2%
36. Sanofi (SNY): 4.3%
37. Whirlpool Corp. (WHR): 3.2%
38. Omnicom Grp. Inc. (OMC): 3.4%
39. Main Street Capital Corp. (MAIN): 6.4%
40. Farmers & Merchants Bancorp (FMCB): 1.8%
41. Cummins Inc. (CMI): 3%
42. Global Net Lease Inc. (GNL): 11.7%
43. Verizon Communications Inc. (VZ): 4.3%
44. Philip Morris Intl. Inc. (PM): 5.2%
45. The Toronto-Dominion Bank (TD.TO): 3.9%
46. 1st Source Corp. (SRCE): 2.3%
47. U.S. Bancorp (USB): 2.9%
48. BlackRock Inc. (BLK): 3.1%
49. Domtar Corp. (UFS): 3.4%
50. ARMOUR Residential REIT Inc. (ARR): 11.6%
51. W.W. Grainger Inc. (GWW): 1.8%
52. Amgen Inc. (AMGN): 3.1%
53. PPG Industries Inc. (PPG): 1.7%
54. Hanesbrands Inc. (HBI): 3.2%
55. Lowe's Companies Inc. (LOW): 1.9%
56. BP plc (BP): 5.8%
57. Parker-Hannifin Corp. (PH): 1.7%
58. Digital Realty Trust Inc. (DLR): 3.8%
59. Stanley Black & Decker Inc. (SWK): 2%
60. Tompkins Financial Corp. (TMP): 2.6%
61. Conagra Brands Inc. (CAG): 3.7%
62. Commerce Bancshares Inc. (CBSH): 1.7%
63. TC PipeLines LP (TCP): 7.9%
64. Pentair plc (PNR): 1.7%
65. Iron Mountain Inc. (IRM): 6.9%
66. Eagle Financial Srvcs. Inc. (EFSI): 2.9%
67. General Dynamics Corp. (GD): 2.2%
68. Bank of Montreal (BMO.TO): 3.9%
69. MetLife Inc. (MET): 3.7%
70. Sysco Corp. (SYY): 2.3%
71. HollyFrontier Corp. (HFC): 2.6%
72. General Mills Inc. (GIS): 4.2%
73. Simon Property Grp. Inc. (SPG): 4.7%
74. Lockheed Martin Corp. (LMT): 2.9%
75. Occidental Petroleum Corp. (OXY): 4.6%
76. Phillips 66 (PSX): 3.3%
77. Apple Hospitality REIT Inc. (APLE): 7.3%
78. The J. M. Smucker Co. (SJM): 3.3%
79. Patterson Companies Inc. (PDCO): 4.6%
80. Campbell Soup Co. (CPB): 3.9%
81. The Hershey Co. (HSY): 2.6%
82. Dover Corp. (DOV): 2.1%
83. Everest Re Grp. Ltd (RE): 2.5%
84. QUALCOMM Inc. (QCOM): 4.6%
85. ABM Industries Inc. (ABM): 2%
86. BCE Inc. (BCE): 5.5%
87. McDonald's Corp. (MCD): 2.6%
88. Eaton Corp. plc (ETN): 3.5%
89. TELUS Corp. (T.TO): 4.6%
90. Duke Energy Corp. (DUK): 4.1%
91. MDU Resources Grp. Inc. (MDU): 3.1%
92. Computer Services Inc. (CSVI): 2.5%
93. Urstadt Biddle Properties Inc. (UBA): 5.2%
94. PepsiCo Inc. (PEP): 3.2%
95. The Travelers Companies Inc. (TRV): 2.3%
96. Sonoco Products Co. (SON): 2.8%
97. Kohl's Corp. (KSS): 3.4%
98. The Southern Co. (SO): 4.8%
99. Ventas Inc. (VTR): 5.1%
100. Great-West Lifeco Inc. (GWO.TO): 5.4%
101. Host Hotels & Resorts Inc. (HST): 4%
102. Community Bank System Inc. (CBU): 2.4%
103. Edison International (EIX): 3.9%
104. UMB Financial Corp. (UMBF): 1.8%
105. V. F. Corp. (VFC): 2.4%
106. H.B. Fuller Co. (FUL): 1.2%
107. The Gorman-Rupp Co. (GRC): 1.6%
108. Aflac Inc. (AFL): 2.2%
109. Air Products & Chemicals Inc. (APD): 2.6%
110. W.P. Carey Inc. (WPC): 5.6%
111. Medtronic plc (MDT): 2.2%
112. AXIS Capital Holdings Ltd (AXS): 2.8%
113. Black Hills Corp. (BKH): 2.8%
114. Bemis Co. Inc. (BMS): 2.4%
115. SJW Grp. (SJW): 2%
116. Abbott Laboratories (ABT): 1.6%
117. Walmart Inc. (WMT): 2.2%
118. The Clorox Co. (CLX): 2.5%
119. National Retail Properties Inc. (NNN): 3.8%
120. Colgate-Palmolive Co. (CL): 2.6%
121. Universal Health Realty Income Trust (UHT): 3.6%
122. Hormel Foods Corp. (HRL): 1.9%
123. PPL Corp. (PPL): 5.1%
124. Entergy Corp. (ETR): 4%
125. Connecticut Water Service Inc. (CTWS): 1.8%
126. Northwest Natural Holding Co. (NWN): 3%
127. Cincinnati Financial Corp. (CINF): 2.6%
128. MGE Energy Inc. (MGEE): 2.1%
129. Lancaster Colony Corp. (LANC): 1.7%
C-Rated Retirement Suitability Stocks 1. Senior Housing Properties Trust (SNH): 13.1%
2. Genesis Energy LP (GEL): 10.2%
3. EQM Midstream Partners LP (EQM): 11.5%
4. HSBC Holdings plc (HSBC): 10.2%
5. Manulife Financial Corp. (MFC): 4.5%
6. Macquarie Infra. Corp. (MIC): 10%
7. Buckeye Partners LP (BPL): 8.9%
8. Vector Grp. Ltd (VGR): 14%
9. Apollo Global Mgmt. LLC (APO): 7.7%
10. Principal Financial Grp. Inc. (PFG): 4.2%
11. China Petroleum & Chemical Corp. (SNP): 10.1%
12. New Residential Inv. Corp. (NRZ): 12.1%
13. Aegon NV (AEG): 6.1%
14. The Goldman Sachs Grp. Inc. (GS): 1.6%
15. Macy's Inc. (M): 6.2%
16. MPLX LP (MPLX): 7.9%
17. Artisan Partners Asset Mgmt. Inc. (APAM): 8.5%
30
18. Brookfield Infra. Partners LP (BIP): 5.1%
19. Sun Life Financial Inc. (SLF): 4%
20. Banco Santander SA (SAN): 6.2%
21. Stage Stores Inc. (SSI): 17.4%
22. LyondellBasell Industries NV (LYB): 4.8%
23. Spark Energy Inc. (SPKE): 7.8%
24. Brookfield Renewable Partners LP (BEP): 6.8%
25. Ford Motor Co. (F): 6.8%
26. WPP plc (WPP): 6.9%
27. FedEx Corp. (FDX): 1.4%
28. KeyCorp (KEY): 4%
29. Seagate Technology plc (STX): 5.4%
30. Southwest Airlines Co. (LUV): 1.2%
31. Old Republic Intl. Corp. (ORI): 3.9%
32. M&T Bank Corp. (MTB): 2.3%
33. John Wiley & Sons Inc. (JW.A): 3.1%
34. Snap-on Inc. (SNA): 2.4%
35. Macerich Co. (MAC): 7%
36. CenturyLink Inc. (CTL): 8.4%
37. Texas Instruments Inc. (TXN): 2.9%
38. Perrigo Co. plc (PRGO): 1.5%
39. Daimler AG (DDAIF): 7.5%
40. Waddell & Reed Financial Inc. (WDR): 5.5%
41. Northrop Grumman Corp. (NOC): 1.7%
42. The Blackstone Grp. LP (BX): 6.9%
43. ONEOK Inc. (OKE): 5.2%
44. BT Grp. plc (BT): 4.1%
45. Textron Inc. (TXT): 0.2%
46. American Express Co. (AXP): 1.4%
47. Eni SpA (E): 5.5%
48. Canadian Pacific Railway Ltd (CP): 1%
49. Intel Corp. (INTC): 2.4%
50. Molson Coors Brewing Co. (TAP): 2.7%
51. UnitedHealth Grp. Inc. (UNH): 1.5%
52. NetApp Inc. (NTAP): 2.5%
53. STAG Industrial Inc. (STAG): 5.2%
54. Donaldson Co. Inc. (DCI): 1.5%
55. Legg Mason Inc. (LM): 4.7%
56. Comcast Corp. (CMCSA): 2.2%
57. A. O. Smith Corp. (AOS): 1.7%
58. The Home Depot Inc. (HD): 3%
59. Summit Hotel Properties Inc. (INN): 6.2%
60. Telefónica SA (TEF): 5.4%
61. Weyerhaeuser Co. (WY): 5.5%
62. Nielsen Holdings plc (NLSN): 5.2%
63. L Brands Inc. (LB): 4.5%
64. GlaxoSmithKline plc (GSK): 5.9%
65. Lamar Advertising Co. (LAMR): 4.9%
66. B&G Foods Inc. (BGS): 7.7%
67. Carlisle Companies Inc. (CSL): 1.3%
68. Apple Inc. (AAPL): 1.7%
69. Kinder Morgan Inc. (KMI): 4%
70. Foot Locker Inc. (FL): 2.4%
71. Prudential Financial Inc. (PRU): 4.1%
72. Apollo Comml. Real Estate Finance Inc. (ARI): 10.1%
73. Navient Corporation (NAVI): 5.3%
74. General Motors Co. (GM): 3.9%
75. The Sherwin-Williams Co. (SHW): 1.1%
76. Taubman Centers, Inc. (TCO): 5.2%
77. Novartis AG (NVS): 3.3%
78. Kimco Realty Corp. (KIM): 6.4%
79. Starwood Property Trust Inc. (STWD): 8.5%
80. Seaspan Corp. (SSW): 5.7%
81. Dominion Energy Inc. (D): 4.5%
82. OUTFRONT Media Inc. (OUT): 6.3%
83. Becton, Dickinson & Co. (BDX): 1.2%
84. América Móvil SAB de CV (AMX): 2.3%
85. Valero Energy Corp. (VLO): 4.4%
86. Chubb Ltd (CB): 2.2%
87. Flowers Foods Inc. (FLO): 3.5%
88. Honda Motor Co. Ltd (HMC): 3.6%
89. CenterPoint Energy Inc. (CNP): 3.8%
90. Ingersoll-Rand plc (IR): 2%
91. Restaurant Brands Intl. Inc. (QSR): 3.2%
92. American Electric Power Co. Inc. (AEP): 3.3%
93. Unilever plc (UL): 3.3%
94. CSX Corp. (CSX): 1.3%
95. Deere & Co. (DE): 1.9%
96. CF Industries Holdings Inc. (CF): 2.9%
97. Orchid Island Capital Inc. (ORC): 14.3%
98. Taiwan Semiconductor Mfg. Co. Ltd (TSM): 3.5%
99. Oracle Corp. (ORCL): 1.5%
100. The Kroger Co. (KR): 1.9%
101. Public Storage (PSA): 3.8%
102. Raytheon Co. (RTN): 1.9%
103. Rockwell Automation Inc. (ROK): 2.2%
104. Norfolk Southern Corp. (NSC): 1.9%
105. Gladstone Inv. Corp. (GAIN): 7.1%
106. Cisco Systems Inc. (CSCO): 2.7%
107. National Fuel Gas Co. (NFG): 2.8%
108. Brookfield Asset Mgmt. Inc. (BAM): 1.4%
109. First Financial Corp. (THFF): 2.3%
110. Chesapeake Financial Shares Inc. (CPKF): 2.2%
111. McCormick & Co. Inc. (MKC): 1.7%
112. Dillard's Inc. (DDS): 0.6%
113. Corning Inc. (GLW): 2.3%
114. Church & Dwight Co. Inc. (CHD): 1.4%
115. The TJX Companies Inc. (TJX): 1.5%
116. Brady Corp. (BRC): 1.8%
117. Cracker Barrel Old Country Store Inc. (CBRL): 3.2%
118. Rogers Communications Inc. (RCI.B.TO): 2.9%
119. Realty Income Corp. (O): 3.9%
120. United Technologies Corp. (UTX): 2.3%
121. Nordson Corp. (NDSN): 1%
122. Welltower Inc. (WELL): 4.7%
123. Suncor Energy Inc. (SU.TO): 3.7%
124. Thomson Reuters Corp. (TRI): 2.7%
125. HCP Inc. (HCP): 4.8%
126. MSA Safety Inc. (MSA): 1.5%
127. McGrath RentCorp (MGRC): 2.6%
128. L3 Technologies Inc. (LLL): 1.6%
129. UGI Corp. (UGI): 1.9%
130. Merck & Co. Inc. (MRK): 2.7%
131. Ecolab Inc. (ECL): 1.1%
132. Tennant Co. (TNC): 1.4%
133. Aqua America Inc. (WTR): 2.4%
134. NextEra Energy Inc. (NEE): 2.7%
135. Advance Auto Parts Inc. (AAP): 0.2%
31
136. Brown-Forman Corp. (BF.B): 1.3%
137. Roper Technologies Inc. (ROP): 0.6%
138. Nucor Corp. (NUE): 2.7%
139. Assurant Inc. (AIZ): 2.3%
140. Stepan Co. (SCL): 1.1%
141. Nestlé SA (NSRGY): 2.7%
142. Automatic Data Processing Inc. (ADP): 2.1%
143. Union Pacific Corp. (UNP): 2.1%
144. Atmos Energy Corp. (ATO): 2.1%
145. Hasbro Inc. (HAS): 3.1%
146. Cintas Corp. (CTAS): 1%
147. Tootsie Roll Industries Inc. (TR): 1%
148. Middlesex Water Co. (MSEX): 1.7%
149. California Water Service Grp. (CWT): 1.5%
150. American States Water Co. (AWR): 1.6%
151. West Pharmaceutical Srvcs. Inc. (WST): 0.6%
152. RLI Corp. (RLI): 1.3%
D-Rated Retirement Suitability Stocks 1. Lazard Ltd (LAZ): 4.7%
2. POSCO (PKX): 3.1%
3. Hawaiian Holdings Inc. (HA): 1.8%
4. Carnival Corp. (CCL): 3.5%
5. Fiat Chrysler Automobiles NV (FCAU): 5%
6. Synchrony Financial (SYF): 2.6%
7. Applied Materials Inc. (AMAT): 2.1%
8. BBT Corp. (BBT): 3.1%
9. Citigroup Inc. (C): 2.9%
10. Broadcom Inc. (AVGO): 3.8%
11. Bank of America Corp. (BAC): 2.1%
12. Six Flags Entertainment Corp. (SIX): 6.1%
13. DowDuPont Inc. (DWDP): 2.8%
14. Johnson Controls Intl. plc (JCI): 3%
15. Tenaris SA (TS): 4.2%
16. Magna Intl. Inc. (MGA): 2.8%
17. Schlumberger Ltd/NV (SLB): 4.5%
18. Discover Financial Services (DFS): 2.3%
19. Alaska Air Grp. Inc. (ALK): 2.4%
20. Harley-Davidson Inc. (HOG): 3.9%
21. Royal Caribbean Cruises Ltd (RCL): 2.3%
22. Ryder System Inc. (R): 3.5%
23. Comerica Inc. (CMA): 3.1%
24. Halliburton Co. (HAL): 2.4%
25. Toyota Motor Corp. (TM): 3%
26. Kansas City Southern (KSU): 1.3%
27. Constellation Brands Inc. (STZ): 1.8%
28. Crown Castle Intl. Corp. (CCI): 3.8%
29. Bayer AG (BAYRY): 4% 30. Fresenius Medical Care AG & Co. KGaA (FMS): 1.6%
31. Huntington Bancshares Inc. (HBAN): 3.9%
32. TransCanada Corp. (TRP): 5%
33. Ally Financial Inc. (ALLY): 2.6%
34. Wells Fargo & Co. (WFC): 3.6%
35. Xerox Corp. (XRX): 3.2%
36. Arthur J. Gallagher & Co. (AJG): 2.2%
37. Dine Brands Global Inc. (DIN): 2.9%
38. NVIDIA Corp. (NVDA): 0.4%
39. SAP SE (SAP): 1.6%
40. Williams-Sonoma Inc. (WSM): 3%
41. KLA-Tencor Corp. (KLAC): 2.6%
42. Tractor Supply Co. (TSCO): 1.3%
43. Aon plc (AON): 1%
44. Best Buy Co. Inc. (BBY): 3%
45. Ambev SA (ABEV): 5.5%
46. The Walt Disney Co. (DIS): 1.5%
47. Deutsche Telekom AG (DTEGY): 4.8%
48. The Boeing Co. (BA): 1.9%
49. Marathon Petroleum Corp. (MPC): 3.5%
50. Stryker Corp. (SYK): 1.1%
51. The Bank of New York Mellon Corp. (BK): 2.1%
52. CNOOC Ltd (CEO): 4.2%
53. Domino's Pizza Inc. (DPZ): 1%
54. Cognizant Technology Solutions Corp. (CTSH): 1.1%
55. Mastercard Inc. (MA): 0.6%
56. Visa Inc. (V): 0.7%
57. JPMorgan Chase & Co. (JPM): 3.1%
58. China Mobile Ltd (CHL): 4.2%
59. Baker Hughes, a GE Co. (BHGE): 2.7%
60. The Toro Co. (TTC): 1.3%
61. S&P Global Inc. (SPGI): 1.2%
62. SEI Investments Co. (SEIC): 1.3%
63. Las Vegas Sands Corp. (LVS): 5.2%
64. Jack in the Box Inc. (JACK): 2%
65. Anheuser-Busch InBev NV (BUD): 4%
66. Microsoft Corp. (MSFT): 1.7%
67. Tiffany & Co. (TIF): 2.3%
68. Dollar General Corp. (DG): 1%
69. Autoliv Inc. (ALV): 3%
70. Starbucks Corp. (SBUX): 2%
71. NACCO Industries Inc. (NC): 1.8%
72. Shaw Communications Inc. (SJR.A.V): 4.2%
73. Helmerich & Payne Inc. (HP): 5.3%
74. Bristol-Myers Squibb Co. (BMY): 3.1%
75. Fastenal Co. (FAST): 2.8%
76. Novo Nordisk A/S (NVO): 2.6%
77. PACCAR Inc. (PCAR): 1.9%
78. Boston Properties Inc. (BXP): 2.9%
79. Mondelez Intl. Inc. (MDLZ): 2.2%
80. Delta Air Lines Inc. (DAL): 2.8%
81. Canon Inc. (CAJ): 5.3%
82. The Allstate Corp. (ALL): 2.1%
83. Consolidated Water Co. Ltd (CWCO): 2.5%
84. Keurig Dr Pepper Inc. (KDP): 2.3%
85. Xylem Inc. (XYL): 1.3%
86. Yum! Brands Inc. (YUM): 1.8%
87. Popular Inc. (BPOP): 2.2%
88. ResMed Inc. (RMD): 1.4%
89. Morningstar Inc. (MORN): 0.9%
90. Telephone & Data Systems Inc. (TDS): 2.1%
91. Pfizer Inc. (PFE): 3.4%
92. Dunkin' Brands Grp. Inc. (DNKN): 2.1%
93. Costco Wholesale Corp. (COST): 1%
94. Copa Holdings SA (CPA): 3.1%
95. Nokia Corp. (NOK): 3.8%
96. Williams Companies (WMB): 5.5%
97. Melco Resorts & Entertainment Ltd (MLCO): 2.7%
98. Honeywell Intl. Inc. (HON): 2.1%
32
99. Otter Tail Corp. (OTTR): 2.8%
100. Abercrombie & Fitch Co. (ANF): 3.8%
101. Diageo plc (DEO): 1.8%
102. Rio Tinto plc (RIO): 4.3%
103. Moody's Corp. (MCO): 1.2%
104. Ross Stores Inc. (ROST): 1%
105. Franklin Electric Co. Inc. (FELE): 1.1%
106. BHP Group Ltd (BHP): 4.5%
107. Canadian National Railway Co. (CNI): 1.9%
108. Nike Inc. (NKE): 1%
109. Methanex Corp. (MEOH): 2.2%
110. Jack Henry & Associates Inc. (JKHY): 1.2%
111. Waste Mgmt. Inc. (WM): 2.1%
112. Garmin Ltd (GRMN): 2.7%
113. Equity Residential (EQR): 2.9%
114. AvalonBay Communities Inc. (AVB): 3.1%
115. Linde plc (LIN): 2.1%
116. Meredith Corp. (MDP): 4%
117. Paychex Inc. (PAYX): 2.9%
118. Westamerica Bancorporation (WABC): 2.5%
119. R.R. Donnelley & Sons Co. (RRD): 2.4%
120. CAE Inc. (CAE.TO): 1.4%
121. Mercury General Corp. (MCY): 4.8%
122. Twenty-First Century Fox Inc. (FOXA): 0.7%
123. Eli Lilly & Co. (LLY): 2%
124. AstraZeneca plc (AZN): 3.3%
125. Erie Indemnity Co. (ERIE): 1.9%
126. Badger Meter Inc. (BMI): 1%
F-Rated Retirement Suitability Stocks 1. Mckesson Corp. (MCK): 1.3%
2. TechnipFMC plc (FTI): 2.4%
3. Owens & Minor Inc. (OMI): 0.2%
4. Apache Corp. (APA): 3%
5. American Airlines Grp. Inc. (AAL): 1.2%
6. ArcelorMittal (MT): 0.5%
7. National Oilwell Varco Inc. (NOV): 0.7%
8. Aptiv plc (APTV): 1.1%
9. Petróleo Brasileiro SA - Petrobras (PBR): 0.7%
10. Logitech Intl. SA (LOGI): 1.8%
11. Pearson plc (PSO): 2.2%
12. ConocoPhillips (COP): 1.8%
13. Yamana Gold Inc. (AUY): 0.8%
14. Ping An Insurance Grp. Co. of China Ltd (PNGAY): 1.7%
15. Calvin B. Taylor Bankshares Inc. (TYCB): 2.9%
16. Patterson-UTI Energy Inc. (PTEN): 1.2%
17. PetroChina Co. Ltd (PTR): 2.1%
18. Sony Corp. (SNE): 0.6%
19. MGM Resorts Intl. (MGM): 1.9%
20. Nabors Industries Ltd (NBR): 1.1%
21. General Electric Co. (GE): 0.4%
22. Wynn Resorts Ltd (WYNN): 2.4%
23. Accenture plc (ACN): 1.8%
24. The Wendy's Co. (WEN): 2.3%
25. Scholastic Corp. (SCHL): 1.5%
26. Ferrari NV (RACE): 0.7%
27. Koninklijke Philips NV (PHG): 2.4%
28. Newmont Mining Corp. (NEM): 1.6%
29. Barrick Gold Corp. (GOLD): 2.2%
30. Wheaton Precious Metals Corp. (WPM): 1.7%
31. Telefonaktiebolaget LM Ericsson (ERIC): 1.2%
32. Kulicke & Soffa Industries Inc. (KLIC): 2%
33
List of Stocks by Sector
Each of the securities in The Sure Analysis Research Database are grouped according to sector and
Retirement Suitability Score and sorted (from highest to lowest) by Expected Total Returns.
Dividend or Distribution Yield is included next to each security’s ticker symbol. The Retirement
Suitability Score is a combination of the Dividend Risk Score and the security’s Distribution
or Dividend Yield. You can learn more about how the score is calculated at The Sure Analysis
Glossary.
Note: Check The Sure Analysis Research Database for the most up-to-date Retirement Suitability
Scores and Distribution or Dividend Yields.
Basic Materials A-Ranked Retirement Suitability 1. RPM Intl. Inc. (RPM): 2.4%
B-Ranked Retirement Suitability 1. Domtar Corp. (UFS): 3.4%
2. PPG Industries Inc. (PPG): 1.7%
3. MDU Resources Grp. Inc. (MDU): 3.1%
4. H.B. Fuller Co. (FUL): 1.2%
5. Air Products & Chemicals Inc. (APD): 2.6%
C-Ranked Retirement Suitability 1. LyondellBasell Industries NV (LYB): 4.8%
2. Weyerhaeuser Co. (WY): 5.5%
3. The Sherwin-Williams Co. (SHW): 1.1%
4. CF Industries Holdings Inc. (CF): 2.9%
5. Ecolab Inc. (ECL): 1.1%
6. Nucor Corp. (NUE): 2.7%
7. Stepan Co. (SCL): 1.1%
D-Ranked Retirement Suitability 1. POSCO (PKX): 3.1%
2. DowDuPont Inc. (DWDP): 2.8%
3. NACCO Industries Inc. (NC): 1.8%
4. Rio Tinto plc (RIO): 4.3%
5. BHP Group Ltd (BHP): 4.5%
6. Methanex Corp. (MEOH): 2.2%
7. Linde plc (LIN): 2.1%
F-Ranked Retirement Suitability 1. ArcelorMittal (MT): 0.5%
2. Yamana Gold Inc. (AUY): 0.8%
3. Newmont Mining Corp. (NEM): 1.6%
4. Barrick Gold Corp. (GOLD): 2.2%
5. Wheaton Precious Metals Corp. (WPM): 1.7%
Communication Services
A-Ranked Retirement Suitability 1. AT&T Inc. (T) - 6.8%
B-Ranked Retirement Suitability 1. Vodafone Grp. Plc (VOD): 9.9%
2. Verizon Communications Inc. (VZ): 4.3%
3. BCE Inc. (BCE): 5.5%
4. TELUS Corp. (T.TO): 4.6%
C-Ranked Retirement Suitability 1. CenturyLink Inc. (CTL): 8.4%
2. BT Grp. plc (BT): 4.1%
3. Comcast Corp. (CMCSA): 2.2%
4. Telefónica SA (TEF): 5.4%
5. América Móvil SAB de CV (AMX): 2.3%
6. Rogers Communications Inc. (RCI.B.TO): 2.9%
D-Ranked Retirement Suitability 1. Deutsche Telekom AG (DTEGY): 4.8%
2. China Mobile Ltd (CHL): 4.2%
3. Shaw Communications Inc. (SJR.A.V): 4.2%
4. Telephone & Data Systems Inc. (TDS): 2.1%
F-Ranked Retirement Suitability 1. N/A
Consumer Cyclical A-Ranked Retirement Suitability 1. WestRock Co. (WRK): 4.7%
2. Leggett & Platt Inc. (LEG): 3.3%
3. International Paper Co. (IP): 4.3%
4. Bed Bath & Beyond Inc. (BBBY): 4.1%
5. WEYCO Grp. Inc. (WEYS): 3.2%
6. Genuine Parts Co. (GPC): 2.8%
B-Ranked Retirement Suitability 1. GameStop Corp. (GME): 13.1%
34
2. Nordstrom Inc. (JWN): 3.3%
3. H&R Block Inc. (HRB): 4.2%
4. Whirlpool Corp. (WHR): 3.2%
5. Omnicom Grp. Inc. (OMC): 3.4%
6. Hanesbrands Inc. (HBI): 3.2%
7. Lowe's Companies Inc. (LOW): 1.9%
8. McDonald's Corp. (MCD): 2.6%
9. Sonoco Products Co. (SON): 2.8%
10. Kohl's Corp. (KSS): 3.4%
11. V. F. Corp. (VFC): 2.4%
12. Bemis Co. Inc. (BMS): 2.4%
C-Ranked Retirement Suitability 1. Macy's Inc. (M): 6.2%
2. Stage Stores Inc. (SSI): 17.4%
3. Ford Motor Co. (F): 6.8%
4. WPP plc (WPP): 6.9%
5. John Wiley & Sons Inc. (JW.A): 3.1%
6. Daimler AG (DDAIF): 7.5%
7. The Home Depot Inc. (HD): 3%
8. L Brands Inc. (LB): 4.5%
9. Foot Locker Inc. (FL): 2.4%
10. General Motors Co. (GM): 3.9%
11. Honda Motor Co. Ltd (HMC): 3.6%
12. Restaurant Brands Intl. Inc. (QSR): 3.2%
13. Dillard's Inc. (DDS): 0.6%
14. The TJX Companies Inc. (TJX): 1.5%
15. Cracker Barrel Old Country Store Inc. (CBRL): 3.2%
16. Advance Auto Parts Inc. (AAP): 0.2%
17. Hasbro Inc. (HAS): 3.1%
D-Ranked Retirement Suitability 1. Carnival Corp. (CCL): 3.5%
2. Fiat Chrysler Automobiles NV (FCAU): 5%
3. Six Flags Entertainment Corp. (SIX): 6.1%
4. Magna Intl. Inc. (MGA): 2.8%
5. Harley-Davidson Inc. (HOG): 3.9%
6. Royal Caribbean Cruises Ltd (RCL): 2.3%
7. Toyota Motor Corp. (TM): 3%
8. Dine Brands Global Inc. (DIN): 2.9%
9. Williams-Sonoma Inc. (WSM): 3%
10. Tractor Supply Co. (TSCO): 1.3%
11. Best Buy Co. Inc. (BBY): 3%
12. The Walt Disney Co. (DIS): 1.5%
13. Domino's Pizza Inc. (DPZ): 1%
14. Las Vegas Sands Corp. (LVS): 5.2%
15. Jack in the Box Inc. (JACK): 2%
16. Tiffany & Co. (TIF): 2.3%
17. Autoliv Inc. (ALV): 3%
18. Starbucks Corp. (SBUX): 2%
19. Yum! Brands Inc. (YUM): 1.8%
20. Dunkin' Brands Grp. Inc. (DNKN): 2.1%
21. Melco Resorts & Entertainment Ltd (MLCO): 2.7%
22. Abercrombie & Fitch Co. (ANF): 3.8%
23. Ross Stores Inc. (ROST): 1%
24. Nike Inc. (NKE): 1%
25. Meredith Corp. (MDP): 4%
26. Twenty-First Century Fox Inc. (FOXA): 0.7%
F-Ranked Retirement Suitability 1. Aptiv plc (APTV): 1.1%
2. Pearson plc (PSO): 2.2%
3. MGM Resorts Intl. (MGM): 1.9%
4. Wynn Resorts Ltd (WYNN): 2.4%
5. The Wendy's Co. (WEN): 2.3%
6. Scholastic Corp. (SCHL): 1.5%
7. Ferrari NV (RACE): 0.7%
Consumer Defensive A-Ranked Retirement Suitability 1. Walgreens Boots Alliance Inc. (WBA): 2.8%
2. Altria Grp. Inc. (MO): 6.1%
3. The Kraft Heinz Co. (KHC): 4.8%
4. Target Corp. (TGT): 3.4%
5. Archer-Daniels-Midland Co. (ADM): 3.3%
6. Kimberly-Clark Corp. (KMB): 3.5%
7. Universal Corp. (UVV): 5.1%
8. The Procter & Gamble Co. (PG): 2.9%
9. The Coca-Cola Co. (KO): 3.5%
B-Ranked Retirement Suitability 1. British American Tobacco plc (BTI): 7%
2. Newell Brands Inc. (NWL): 5.8%
3. Imperial Brands plc (IMBBY): 7.1%
4. Kellogg Co. (K): 4.1%
5. Philip Morris Intl. Inc. (PM): 5.2%
6. Conagra Brands Inc. (CAG): 3.7%
7. Sysco Corp. (SYY): 2.3%
8. General Mills Inc. (GIS): 4.2%
9. The J. M. Smucker Co. (SJM): 3.3%
10. Campbell Soup Co. (CPB): 3.9%
11. The Hershey Co. (HSY): 2.6%
12. PepsiCo Inc. (PEP): 3.2%
13. Walmart Inc. (WMT): 2.2%
14. The Clorox Co. (CLX): 2.5%
15. Colgate-Palmolive Co. (CL): 2.6%
16. Hormel Foods Corp. (HRL): 1.9%
17. Lancaster Colony Corp. (LANC): 1.7%
C-Ranked Retirement Suitability 1. Vector Grp. Ltd (VGR): 14%
2. Molson Coors Brewing Co. (TAP): 2.7%
3. B&G Foods Inc. (BGS): 7.7%
4. Flowers Foods Inc. (FLO): 3.5%
5. Unilever plc (UL): 3.3%
6. The Kroger Co. (KR): 1.9%
7. McCormick & Co. Inc. (MKC): 1.7%
8. Church & Dwight Co. Inc. (CHD): 1.4%
9. Brown-Forman Corp. (BF.B): 1.3%
10. Nestlé SA (NSRGY): 2.7%
11. Tootsie Roll Industries Inc. (TR): 1%
D-Ranked Retirement Suitability 1. Constellation Brands Inc. (STZ): 1.8%
35
2. Ambev SA (ABEV): 5.5%
3. Anheuser-Busch InBev NV (BUD): 4%
4. Dollar General Corp. (DG): 1%
5. Mondelez Intl. Inc. (MDLZ): 2.2%
6. Keurig Dr Pepper Inc. (KDP): 2.3%
7. Costco Wholesale Corp. (COST): 1%
8. Diageo plc (DEO): 1.8%
F-Ranked Retirement Suitability 1. N/A
Energy A-Ranked Retirement Suitability 1. Vermilion Energy Inc. (VET): 7.9%
2. Energy Transfer LP (ET): 8.2%
3. Enbridge Inc. (ENB): 6.3%
4. Enterprise Products Partners LP (EPD): 6.2%
5. Chevron Corp. (CVX): 3.9%
6. Exxon Mobil Corp. (XOM): 4.1%
B-Ranked Retirement Suitability 1. Sunoco LP (SUN): 11.1%
2. Magellan Midstream Partners LP (MMP): 6.6%
3. Canadian Natural Resources Ltd (CNQ.TO): 3.7%
4. Royal Dutch Shell plc (RDS.B): 5.9%
5. Imperial Oil Ltd (IMO): 2.1%
6. Targa Resources Corp. (TRGP): 8.8%
7. Holly Energy Partners LP (HEP): 9.3%
8. Total SA (TOT): 5%
9. BP plc (BP): 5.8%
10. TC PipeLines LP (TCP): 7.9%
11. HollyFrontier Corp. (HFC): 2.6%
12. Occidental Petroleum Corp. (OXY): 4.6%
13. Phillips 66 (PSX): 3.3%
C-Ranked Retirement Suitability 1. Genesis Energy LP (GEL): 10.2%
2. EQM Midstream Partners LP (EQM): 11.5%
3. Buckeye Partners LP (BPL): 8.9%
4. China Petroleum & Chemical Corp. (SNP): 10.1%
5. MPLX LP (MPLX): 7.9%
6. ONEOK Inc. (OKE): 5.2%
7. Eni SpA (E): 5.5%
8. Kinder Morgan Inc. (KMI): 4%
9. Valero Energy Corp. (VLO): 4.4%
10. National Fuel Gas Co. (NFG): 2.8%
11. Suncor Energy Inc. (SU.TO): 3.7%
D-Ranked Retirement Suitability 1. Tenaris SA (TS): 4.2%
2. Schlumberger Ltd/NV (SLB): 4.5%
3. Halliburton Co. (HAL): 2.4%
4. TransCanada Corp. (TRP): 5%
5. Marathon Petroleum Corp. (MPC): 3.5%
6. CNOOC Ltd (CEO): 4.2%
7. Baker Hughes, a GE Co. (BHGE): 2.7%
8. Helmerich & Payne Inc. (HP): 5.3%
9. Williams Companies (WMB): 5.5%
F-Ranked Retirement Suitability 1. TechnipFMC plc (FTI): 2.4%
2. Apache Corp. (APA): 3%
3. National Oilwell Varco Inc. (NOV): 0.7%
4. Petróleo Brasileiro SA - Petrobras (PBR): 0.7%
5. ConocoPhillips (COP): 1.8%
6. Patterson-UTI Energy Inc. (PTEN): 1.2%
7. PetroChina Co. Ltd (PTR): 2.1%
8. Nabors Industries Ltd (NBR): 1.1%
Financial Services A-Ranked Retirement Suitability 1. Invesco Ltd (IVZ): 6.2%
2. The Bank of Nova Scotia (BNS.TO): 4.8%
3. Eaton Vance Corp. (EV): 3.4%
4. Canadian Imperial Bank of Commerce (CM): 5%
5. T. Rowe Price Grp. Inc. (TROW): 3.1%
6. National Bank of Canada (NA.TO): 4.2%
7. The Western Union Co. (WU): 4.4%
8. People's United Financial Inc. (PBCT): 4%
9. Community Trust Bancorp Inc. (CTBI): 3.4%
10. United Bankshares Inc. (UBSI): 3.5%
11. Franklin Resources Inc. (BEN): 3.2%
B-Ranked Retirement Suitability 1. Bank OZK (OZK): 2.5%
2. Ameriprise Financial Inc. (AMP): 2.8%
3. Royal Bank of Canada (RY.TO): 3.9%
4. Main Street Capital Corp. (MAIN): 6.4%
5. Farmers & Merchants Bancorp (FMCB): 1.8%
6. The Toronto-Dominion Bank (TD.TO): 3.9%
7. 1st Source Corp. (SRCE): 2.3%
8. U.S. Bancorp (USB): 2.9%
9. BlackRock Inc. (BLK): 3.1%
10. Tompkins Financial Corp. (TMP): 2.6%
11. Commerce Bancshares Inc. (CBSH): 1.7%
12. Eagle Financial Srvcs. Inc. (EFSI): 2.9%
13. Bank of Montreal (BMO.TO): 3.9%
14. MetLife Inc. (MET): 3.7%
15. Everest Re Grp. Ltd (RE): 2.5%
16. The Travelers Companies Inc. (TRV): 2.3%
17. Great-West Lifeco Inc. (GWO.TO): 5.4%
18. Community Bank System Inc. (CBU): 2.4%
19. UMB Financial Corp. (UMBF): 1.8%
20. Aflac Inc. (AFL): 2.2%
21. AXIS Capital Holdings Ltd (AXS): 2.8%
22. Cincinnati Financial Corp. (CINF): 2.6%
C-Ranked Retirement Suitability 1. HSBC Holdings plc (HSBC): 10.2%
2. Manulife Financial Corp. (MFC): 4.5%
3. Apollo Global Mgmt. LLC (APO): 7.7%
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4. Principal Financial Grp. Inc. (PFG): 4.2%
5. Aegon NV (AEG): 6.1%
6. The Goldman Sachs Grp. Inc. (GS): 1.6%
7. Artisan Partners Asset Mgmt. Inc. (APAM): 8.5%
8. Sun Life Financial Inc. (SLF): 4%
9. Banco Santander SA (SAN): 6.2%
10. KeyCorp (KEY): 4%
11. Old Republic Intl. Corp. (ORI): 3.9%
12. M&T Bank Corp. (MTB): 2.3%
13. Waddell & Reed Financial Inc. (WDR): 5.5%
14. The Blackstone Grp. LP (BX): 6.9%
15. American Express Co. (AXP): 1.4%
16. Legg Mason Inc. (LM): 4.7%
17. Prudential Financial Inc. (PRU): 4.1%
18. Navient Corporation (NAVI): 5.3%
19. Chubb Ltd (CB): 2.2%
20. Gladstone Inv. Corp. (GAIN): 7.1%
21. Brookfield Asset Mgmt. Inc. (BAM): 1.4%
22. First Financial Corp. (THFF): 2.3%
23. Chesapeake Financial Shares Inc. (CPKF): 2.2%
24. Thomson Reuters Corp. (TRI): 2.7%
25. Assurant Inc. (AIZ): 2.3%
26. RLI Corp. (RLI): 1.3%
D-Ranked Retirement Suitability 1. Lazard Ltd (LAZ): 4.7%
2. Synchrony Financial (SYF): 2.6%
3. BBT Corp. (BBT): 3.1%
4. Citigroup Inc. (C): 2.9%
5. Bank of America Corp. (BAC): 2.1%
6. Discover Financial Services (DFS): 2.3%
7. Comerica Inc. (CMA): 3.1%
8. Huntington Bancshares Inc. (HBAN): 3.9%
9. Ally Financial Inc. (ALLY): 2.6%
10. Wells Fargo & Co. (WFC): 3.6%
11. Arthur J. Gallagher & Co. (AJG): 2.2%
12. Aon plc (AON): 1%
13. The Bank of New York Mellon Corp. (BK): 2.1%
14. Mastercard Inc. (MA): 0.6%
15. Visa Inc. (V): 0.7%
16. JPMorgan Chase & Co. (JPM): 3.1%
17. S&P Global Inc. (SPGI): 1.2%
18. SEI Investments Co. (SEIC): 1.3%
19. The Allstate Corp. (ALL): 2.1%
20. Popular Inc. (BPOP): 2.2%
21. Moody's Corp. (MCO): 1.2%
22. Westamerica Bancorporation (WABC): 2.5%
23. Mercury General Corp. (MCY): 4.8%
24. Erie Indemnity Co. (ERIE): 1.9%
F-Ranked Retirement Suitability 1. Ping An Insurance Grp. Co. of China Ltd (PNGAY): 1.7%
2. Calvin B. Taylor Bankshares Inc. (TYCB): 2.9%%
Healthcare A-Ranked Retirement Suitability
1. AbbVie Inc. (ABBV): 5.4%
2. Cardinal Health Inc. (CAH): 3.8%
3. CVS Health Corp. (CVS): 3.6%
4. Johnson & Johnson (JNJ): 2.6%
B-Ranked Retirement Suitability 1. AmerisourceBergen Corp. (ABC): 2%
2. Gilead Sciences Inc. (GILD): 3.9%
3. Sanofi (SNY): 4.3%
4. Amgen Inc. (AMGN): 3.1%
5. Patterson Companies Inc. (PDCO): 4.6%
6. Medtronic plc (MDT): 2.2%
7. Abbott Laboratories (ABT): 1.6%
C-Ranked Retirement Suitability 1. Perrigo Co. plc (PRGO): 1.5%
2. UnitedHealth Grp. Inc. (UNH): 1.5%
3. GlaxoSmithKline plc (GSK): 5.9%
4. Novartis AG (NVS): 3.3%
5. Becton, Dickinson & Co. (BDX): 1.2%
6. Merck & Co. Inc. (MRK): 2.7%
7. West Pharmaceutical Srvcs. Inc. (WST): 0.6%
D-Ranked Retirement Suitability 1. Bayer AG (BAYRY): 4%
2. Fresenius Medical Care AG & Co. KGaA (FMS): 1.6%
3. Stryker Corp. (SYK): 1.1%
4. Bristol-Myers Squibb Co. (BMY): 3.1%
5. Novo Nordisk A/S (NVO): 2.6%
6. ResMed Inc. (RMD): 1.4%
7. Pfizer Inc. (PFE): 3.4%
8. Eli Lilly & Co. (LLY): 2%
9. AstraZeneca plc (AZN): 3.3%
F-Ranked Retirement Suitability 1. Mckesson Corp. (MCK): 1.3%
2. Owens & Minor Inc. (OMI): 0.2%
3. Koninklijke Philips NV (PHG): 2.4%
Industrials A-Ranked Retirement Suitability 1. Illinois Tool Works Inc. (ITW): 2.8%
2. Emerson Electric Co. (EMR): 2.9%
3. 3M Co. (MMM): 2.8%
B-Ranked Retirement Suitability 1. Compass Diversified Holdings (CODI): 9%
2. Caterpillar Inc. (CAT): 2.5%
3. United Parcel Service Inc. (UPS): 3.5%
4. HNI Corp. (HNI): 3.1%
5. ABB Ltd (ABB): 4.3%
6. MSC Industrial Direct Co. Inc. (MSM): 3%
7. Siemens AG (SIEGY): 4%
8. Cummins Inc. (CMI): 3%
9. W.W. Grainger Inc. (GWW): 1.8%
37
10. Parker-Hannifin Corp. (PH): 1.7%
11. Stanley Black & Decker Inc. (SWK): 2%
12. Pentair plc (PNR): 1.7%
13. Iron Mountain Inc. (IRM): 6.9%
14. General Dynamics Corp. (GD): 2.2%
15. Lockheed Martin Corp. (LMT): 2.9%
16. Dover Corp. (DOV): 2.1%
17. ABM Industries Inc. (ABM): 2%
18. Eaton Corp. plc (ETN): 3.5%
19. The Gorman-Rupp Co. (GRC): 1.6%
C-Ranked Retirement Suitability 1. Macquarie Infra. Corp. (MIC): 10%
2. FedEx Corp. (FDX): 1.4%
3. Southwest Airlines Co. (LUV): 1.2%
4. Snap-on Inc. (SNA): 2.4%
5. Northrop Grumman Corp. (NOC): 1.7%
6. Textron Inc. (TXT): 0.2%
7. Canadian Pacific Railway Ltd (CP): 1%
8. Donaldson Co. Inc. (DCI): 1.5%
9. A. O. Smith Corp. (AOS): 1.7%
10. Nielsen Holdings plc (NLSN): 5.2%
11. Carlisle Companies Inc. (CSL): 1.3%
12. Seaspan Corp. (SSW): 5.7%
13. Ingersoll-Rand plc (IR): 2%
14. CSX Corp. (CSX): 1.3%
15. Deere & Co. (DE): 1.9%
16. Raytheon Co. (RTN): 1.9%
17. Rockwell Automation Inc. (ROK): 2.2%
18. Norfolk Southern Corp. (NSC): 1.9%
19. Brady Corp. (BRC): 1.8%
20. United Technologies Corp. (UTX): 2.3%
21. Nordson Corp. (NDSN): 1%
22. MSA Safety Inc. (MSA): 1.5%
23. McGrath RentCorp (MGRC): 2.6%
24. L3 Technologies Inc. (LLL): 1.6%
25. Tennant Co. (TNC): 1.4%
26. Roper Technologies Inc. (ROP): 0.6%
27. Automatic Data Processing Inc. (ADP): 2.1%
28. Union Pacific Corp. (UNP): 2.1%
29. Cintas Corp. (CTAS): 1%
D-Ranked Retirement Suitability 1. Hawaiian Holdings Inc. (HA): 1.8%
2. Johnson Controls Intl. plc (JCI): 3%
3. Alaska Air Grp. Inc. (ALK): 2.4%
4. Ryder System Inc. (R): 3.5%
5. Kansas City Southern (KSU): 1.3%
6. The Boeing Co. (BA): 1.9%
7. The Toro Co. (TTC): 1.3%
8. Fastenal Co. (FAST): 2.8%
9. PACCAR Inc. (PCAR): 1.9%
10. Delta Air Lines Inc. (DAL): 2.8%
11. Canon Inc. (CAJ): 5.3%
12. Xylem Inc. (XYL): 1.3%
13. Morningstar Inc. (MORN): 0.9%
14. Copa Holdings SA (CPA): 3.1%
15. Honeywell Intl. Inc. (HON): 2.1%
16. Franklin Electric Co. Inc. (FELE): 1.1%
17. Canadian National Railway Co. (CNI): 1.9%
18. Jack Henry & Associates Inc. (JKHY): 1.2%
19. Waste Mgmt. Inc. (WM): 2.1%
20. Paychex Inc. (PAYX): 2.9%
21. R.R. Donnelley & Sons Co. (RRD): 2.4%
22. CAE Inc. (CAE.TO): 1.4%
F-Ranked Retirement Suitability 1. American Airlines Grp. Inc. (AAL): 1.2%
2. General Electric Co. (GE): 0.4%
Real Estate A-Ranked Retirement Suitability 1. Hospitality Properties Trust (HPT): 7.9%
2. Federal Realty Inv. Trust (FRT): 3%
B-Ranked Retirement Suitability 1. Brookfield Property REIT Inc. (BPR): 6.8%
2. Brookfield Property Partners LP (BPY): 6.8%
3. Omega Healthcare Investors Inc. (OHI): 7.4%
4. Global Net Lease Inc. (GNL): 11.7%
5. ARMOUR Residential REIT Inc. (ARR): 11.6%
6. Digital Realty Trust Inc. (DLR): 3.8%
7. Simon Property Grp. Inc. (SPG): 4.7%
8. Apple Hospitality REIT Inc. (APLE): 7.3%
9. Urstadt Biddle Properties Inc. (UBA): 5.2%
10. Ventas Inc. (VTR): 5.1%
11. Host Hotels & Resorts Inc. (HST): 4%
12. W.P. Carey Inc. (WPC): 5.6%
13. National Retail Properties Inc. (NNN): 3.8%
14. Universal Health Realty Income Trust (UHT): 3.6%
C-Ranked Retirement Suitability 1. Senior Housing Properties Trust (SNH): 13.1%
2. New Residential Inv. Corp. (NRZ): 12.1%
3. Macerich Co. (MAC): 7%
4. STAG Industrial Inc. (STAG): 5.2%
5. Summit Hotel Properties Inc. (INN): 6.2%
6. Lamar Advertising Co. (LAMR): 4.9%
7. Apollo Comml. Real Estate Finance Inc. (ARI): 10.1%
8. Taubman Centers, Inc. (TCO): 5.2%
9. Kimco Realty Corp. (KIM): 6.4%
10. Starwood Property Trust Inc. (STWD): 8.5%
11. OUTFRONT Media Inc. (OUT): 6.3%
12. Orchid Island Capital Inc. (ORC): 14.3%
13. Public Storage (PSA): 3.8%
14. Realty Income Corp. (O): 3.9%
15. Welltower Inc. (WELL): 4.7%
16. HCP Inc. (HCP): 4.8%
D-Ranked Retirement Suitability 1. Crown Castle Intl. Corp. (CCI): 3.8%
2. Boston Properties Inc. (BXP): 2.9%
3. Equity Residential (EQR): 2.9%
4. AvalonBay Communities Inc. (AVB): 3.1%
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F-Ranked Retirement Suitability 1. N/A
Technology A-Ranked Retirement Suitability 1. Western Digital Corp. (WDC): 3.9%
2. International Business Machines Corp. (IBM): 4.6%
3. Infosys Ltd (INFY): 3.1%
B-Ranked Retirement Suitability 1. Micro Focus Intl. plc (MFGP): 4.8%
2. HP Inc. (HPQ): 3.3%
3. QUALCOMM Inc. (QCOM): 4.6%
4. Computer Services Inc. (CSVI): 2.5%
C-Ranked Retirement Suitability 1. Seagate Technology plc (STX): 5.4%
2. Texas Instruments Inc. (TXN): 2.9%
3. Intel Corp. (INTC): 2.4%
4. NetApp Inc. (NTAP): 2.5%
5. Apple Inc. (AAPL): 1.7%
6. Taiwan Semiconductor Mfg. Co. Ltd (TSM): 3.5%
7. Oracle Corp. (ORCL): 1.5%
8. Cisco Systems Inc. (CSCO): 2.7%
9. Corning Inc. (GLW): 2.3%
D-Ranked Retirement Suitability 1. Applied Materials Inc. (AMAT): 2.1%
2. Broadcom Inc. (AVGO): 3.8%
3. Xerox Corp. (XRX): 3.2%
4. NVIDIA Corp. (NVDA): 0.4%
5. SAP SE (SAP): 1.6%
6. KLA-Tencor Corp. (KLAC): 2.6%
7. Cognizant Technology Solutions Corp. (CTSH): 1.1%
8. Microsoft Corp. (MSFT): 1.7%
9. Nokia Corp. (NOK): 3.8%
10. Garmin Ltd (GRMN): 2.7%
11. Badger Meter Inc. (BMI): 1%
F-Ranked Retirement Suitability 1. Logitech Intl. SA (LOGI): 1.8%
2. Sony Corp. (SNE): 0.6%
3. Accenture plc (ACN): 1.8%
4. Telefonaktiebolaget LM Ericsson (ERIC): 1.2%
5. Kulicke & Soffa Industries Inc. (KLIC): 2%
Utilities A-Ranked Retirement Suitability 1. Fortis Inc. (FTS.TO): 3.8%
2. Consolidated Edison Inc. (ED): 3.6%
B-Ranked Retirement Suitability 1. AmeriGas Partners LP (APU): 13.9%
2. Suburban Propane Partners LP (SPH): 11.1%
3. Duke Energy Corp. (DUK): 4.1%
4. The Southern Co. (SO): 4.8%
5. Edison International (EIX): 3.9%
6. Black Hills Corp. (BKH): 2.8%
7. SJW Grp. (SJW): 2%
8. PPL Corp. (PPL): 5.1%
9. Entergy Corp. (ETR): 4%
10. Connecticut Water Service Inc. (CTWS): 1.8%
11. Northwest Natural Holding Co. (NWN): 3%
12. MGE Energy Inc. (MGEE): 2.1%
C-Ranked Retirement Suitability 1. Brookfield Infra. Partners LP (BIP): 5.1%
2. Spark Energy Inc. (SPKE): 7.8%
3. Brookfield Renewable Partners LP (BEP): 6.8%
4. Dominion Energy Inc. (D): 4.5%
5. CenterPoint Energy Inc. (CNP): 3.8%
6. American Electric Power Co. Inc. (AEP): 3.3%
7. UGI Corp. (UGI): 1.9%
8. Aqua America Inc. (WTR): 2.4%
9. NextEra Energy Inc. (NEE): 2.7%
10. Atmos Energy Corp. (ATO): 2.1%
11. Middlesex Water Co. (MSEX): 1.7%
12. California Water Service Grp. (CWT): 1.5%
13. American States Water Co. (AWR): 1.6%
D-Ranked Retirement Suitability 1. Consolidated Water Co. Ltd (CWCO): 2.5%
2. Otter Tail Corp. (OTTR): 2.8%
F-Ranked Retirement Suitability 1. N/A
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Past Recommendations & Ranking Criteria, & Sells
Ranking Criteria The ranking criteria for the Top 10 list and requirements for inclusion in The Sure
Retirement Newsletter are derived from The Sure Analysis Research Database.
Specifically, our Top 10 is made up of A (and B if necessary) ranked Retirement
Suitability Score securities with 4%+ yields and strong expected total returns.
Sell Rules Sell Rule #1, Dividend-Based Sell Rules: Any past recommendation that reduces
or eliminates its dividend is automatically a pending sell. We review and analyze
these stocks to determine when to initiate the final sale. Secondly, any past
recommendation that has an “F” Dividend Risk Score is automatically reviewed
for safety and a sell may be issued. We will only recommend selling up to two
securities a month so that the reinvestment of sale proceeds is not concentrated in a
short time frame.
Sell Rule #2, Valuation-Based Sell Rules: Sell past recommendations with
expected total returns below the expected total returns of the S&P 500 over the
next several years. This sell rule replaces our previous valuation-based sell rule of
selling recommendations trading below 2/3 of their historical average dividend
yield. This new valuation-based sell rule goes into effect in this January 2019
edition of The Sure Retirement Newsletter. We calculate our estimate of the long-
term returns of the S&P 500 as the S&P 500’s dividend yield plus nominal (not
inflation adjusted) GDP growth, less valuation multiple mean reversion over 10
years. We currently estimate long-term U.S. nominal GDP growth at 5.5%, the
S&P 500’s dividend yield at 2.0%, and valuation multiple mean reversion at -2.7%
(S&P 500 fair value P/E of 15.7 versus current P/E of 20.6) for an expected total
return sell threshold of 4.8%. Past recommendations at or below this sell threshold
are bolded and in green in the current holds table below. We will only
recommend up to two valuation-based sells a month; and fewer if there are sells
based on the first sell rule.
40
This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Current Holds9 Name Ticker 1st Rec. Date DR Score Total Return Exp. Annual TR
Omega Healthcare OHI 11/7/2016 D 41.8% 13.0%
Enterprise Product EPD 11/7/2016 B 29.7% 10.8%
Energy Transfer ET 11/7/2016 C 23.2% 14.9%
Urstadt Biddle UBA 11/7/2016 C 9.9% 7.4%
Magellan Midstream MMP 11/7/2016 D 2.2% 16.2%
AT&T T 11/7/2016 B -8.3% 16.4%
AmeriGas Partners APU 1/3/2017 D -28.0% 26.9%
Kohl's KSS 5/8/2017 C 83.9% 10.3%
Sunoco SUN 5/8/2017 D 18.9% 20.4%
Macy's M 5/8/2017 D -12.6% 16.1%
Occidental Petroleum OXY 6/5/2017 D 12.0% 9.6%
Royal Dutch Shell RDS.B 7/3/2017 D 24.3% 15.1%
Target TGT 11/6/2017 A 33.3% 10.0%
ONEOK OKE 1/8/2018 F 22.8% 12.4%
Altria MO 5/14/2018 C 4.7% 13.0%
Invesco IVZ 5/14/2018 C -32.3% 18.1%
STAG Industrial STAG 10/15/2018 F 10.8% 11.4%
Verizon VZ 10/15/2018 C 5.9% 11.6%
Western Union WU 10/15/2018 C -9.9% 10.8%
Leggett & Platt LEG 11/12/2018 A 22.1% 10.1%
IBM IBM 11/12/2018 B 12.8% 13.2%
People's United PBCT 11/12/2018 B 10.2% 11.1%
General Mills GIS 11/12/2018 C 2.4% 9.5%
AbbVie ABBV 11/12/2018 A -12.6% 22.5%
Qualcomm QCOM 12/10/2018 C -5.8% 7.4%
Hanesbrands HBI 1/14/2019 B 33.4% 10.9%
Cardinal Health CAH 1/14/2019 B 0.6% 17.3%
Newell Brands NWL 1/14/2019 C -21.8% 18.1%
Western Digital WDC 2/11/2019 B 2.2% 16.3%
WestRock WRK 2/11/2019 B -2.6% 16.4%
9 This does not include our past “special recommendations” (which we don’t track sells for) because they are outside
the scope of the regular Sure Retirement Newsletter strategy. Total return data is calculated using the closing price
from the first trading day after the first recommendation date, and data from midday 3/8/19.
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Sold Positions Name & Ticker Recommend Date Status Total Return10
Waddell & Reed Financial (WDR) November 2016 Sold 11/6/17 34.4%
Gladstone Investment (GAIN) February 2017 Sold 7/9/18 49.7%
R.R. Donnelly & Sons (RRD) June 2018 Sold 8/13/18 -28.2%
Vector Grp. (VGR) August 2017 Sold 12/10/18 -35.1%
New Residential (NRZ) October 2018 Sold 12/10/18 -7.7%
Spectra Energy Partners (SEP) November 2016 Sold 1/14/1911 9.6%
Holly Energy Partners (HEP) December 2016 Sold 1/14/19 6.9%
Welltower (WELL) January 2018 Sold 2/11/19 31.1%
Pending Sells Name & Ticker Recommend Date Status Total Return
Genesis Energy (GEL) November 2016 See notes12 -18.7%
Buckeye Partners (BPL) November 2016 See notes13 -34.4%
TC PipeLines (TCP) December 2016 See notes14 -21.5%
Suburban Propane Partners (SPH) July 2017 See notes 15 4.8%
Owens & Minor (OMI) November 2017 See notes16 -74.6%
L Brands (LB) August 2018 See notes17 -13.3%
Kraft Heinz (KHC) October 2018 See notes18 -39.7%
Senior Housing Properties (SNH) February 2018 Sell 3/11/19 -18.2%
W.P. Carey (WPC) February 2017 Sell 3/11/19 36.4%
10 Total returns start with the market close price of the first trading day after the newsletter recommendation. Prior
to March 2018, this was the first trading day after the first Sunday of the month. As of March 2018, and later, this is
the first trading day after the second Sunday of the month. Closing price data is from midday 3/8/19. 11 Sold shares of ENB which were obtained when ENB acquired SEP. 12 Sell at historical average yield of 6.5%, currently at 10.2%. 13 Sell when price-to-cash-flow ratio hits our fair value estimate of 12.0. It is currently at 7.6. 14 Sell at historical average yield of 7.1%, currently at 7.7%. 15 Sell at historical average yield of 8.7%, currently at 11.1%. 16 Sell when P/E ratio hits our fair value estimate of 10.0. It is currently at 6.7. 17 Sell when P/E ratio hits our fair value estimate of 13.0. It is currently at 10.7. 18 Sell when P/E ratio hits our fair value estimate of 11.0. It is currently at 9.1.
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Buying & Ranking Criteria
The method we use to come up with the Top 10 buys for The Sure Retirement
Newsletter is as follows:
Note: Ranking data is from Wednesday’s Sure Analysis data update.
1. Filter our Sure Analysis Research Database universe of securities for:
- 10%+ Expected total returns
- Dividend yield of 4%+
- Retirement Suitability score of A
- Dividend Risk score of C or higher
- U.S. securities only - All companies must have dividend covered by free cash flow
2. Sort by expected total return (highest first)
3. No more than 3 REITs and 3 MLPs in each newsletter
4. Veto any securities from Top 10 as necessary after qualitative analysis
5. The Top 10 is the 10 highest expected total return securities from steps 1 through
4 above
Dividend risk scores are sorted into quintiles (A is top 20%, B is top 40%, C is top 6%,
and so on) based on the formula below:
Dividend Risk Score (Raw) = Payout Ratio x 100 – # Years of Steady or Rising
Dividends + 50 if deemed risky during a recession
Only the top 10% of securities in our Sure Analysis Research Database receive an “A” Retirement Suitability score, using the following formula:
Retirement Suitability Score (Raw) = (1 – Dividend Risk Score Percentile) + Dividend
Yield Percentile
Our formula for expected total return is calculated as the sum of 5 year expected returns
from growth on a per share basis, 5 year expected returns from valuation multiple
changes, and the current dividend yield.
The combination of a high Retirement Suitability score with high expected total returns
means The Sure Retirement Newsletter looks for high yielding securities with strong total
return potential and good or better safety scores.
Note that our expected total returns are based on the idea that the economy will continue
forward ‘as is’ for the foreseeable future, and not hit a recession. Recessions happen, of
course, and we seek to recommend securities likely to pay steady or rising dividends during recessions. Recession safety factors into our Dividend Risk scores, and in turn our
rankings for The Sure Retirement Newsletter.
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Portfolio Building Guide
The process of building a high-yield dividend portfolio is straightforward: Each month invest
in the top-ranked security in which you own the smallest dollar amount out of the Top 10.
Over time, you will build a well-diversified portfolio of quality businesses purchased when they
yield 4% or more. If your portfolio has 25% or more allocated to one sector, buy the highest
ranked security not in that sector. Alternatively, the Top 10 list is also useful as an idea
generation tool for those with a different portfolio allocation plan.
Examples Portfolio 1 Portfolio 2
Ticker Name Amount Ticker Name Amount
ABBV AbbVie Inc. $ 1,002 ABBV AbbVie Inc. $ 4,374
IVZ Invesco Ltd. $ - IVZ Invesco Ltd. $ 4,878
T AT&T Inc. $ - T AT&T Inc. $ 5,374
WRK WestRock Company $ - WRK WestRock Company $ 4,353
ET Energy Transfer LP $ - ET Energy Transfer LP $ 7,312
MO Altria Group $ - MO Altria Group $ 2,799
IBM IBM Corp. $ - IBM IBM Corp. $ 2,952
EPD Enterprise Products $ - EPD Enterprise Products $ 6,660
WU Western Union $ - WU Western Union $ 2,367 NWL Newell Brands Inc. $ - NWL Newell Brands Inc. $ 2,818
- If you had portfolio 1, you would buy IVZ, the top-ranked security you own least.
- If you had portfolio 2, you would buy WU, the top-ranked security you own least.
If you have an existing portfolio or a large lump sum to invest, switch over to The Sure
Retirement Strategy over 20 months. Each month take 1/20 of your initial portfolio value and
buy the top-ranked security you own the least out of the Top 10 (if that sector makes up less than
25% of your portfolio). When you sell a security, use the proceeds to purchase the top-ranked
security you own the least.
This simple investing process will build a diversified portfolio of high-quality dividend or
distribution securities over a period of less than 2 years. There’s nothing magical about 20
months. A period of 15 months or 30 months will yield similar results.
If your portfolio grows too large to manage comfortably (for example, you are not comfortable
holding 40+ securities – which would happen after around 4 years of the Sure Dividend System),
you will need to sell holdings. I recommend eliminating positions that have the lowest yields.
You can combine recommendations from The Sure Retirement, The Sure Dividend, and The Sure
Dividend International Newsletters by targeting a specific yield for your overall portfolio. When
you need your portfolio yield to increase, invest from The Sure Retirement Newsletter. If less
yield is required (and growth is preferred), invest from The Sure Dividend Newsletter. The Sure
Dividend International Newsletter can be used for international diversification.
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Tax Guide There are 4 broad types of investment vehicles covered in The Sure Retirement Newsletter:
1. Corporations
2. Master Limited Partnerships (MLPs)
3. Real Estate Investment Trusts (REITs)
4. Business Development Companies (BDCs)
The organization form is important for tax purposes because it determines how efficiently a
company can return money to unit or shareholders. An example is below.
Imagine a company makes $10, pre-tax, and distributes 100% to investors. The image below
shows how much of the $10 would go to investors using standard assumptions for the three
investment vehicles:
Notes: Tax treatment for BDCs and REITs is similar. BDCs have been omitted from the
images below because of this. The image below takes into account the pass-through entity
tax breaks from Trump’s Tax Act, which will expire in 2025. The tables below assume that
80% of MLP distributions are returns of capital, and 20% are ordinary income. It assumes
that 70% of REIT payments are ordinary income; and capital gains and return of capital
each make up 15% of REIT payments.
• $6.32 in after-tax income from Corporation
• $7.45 in after-tax income from REIT
• $8.13 in after-tax income from MLP
The image below gives an overview of the different organizational forms:
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Corporations Corporations are taxed on income at the corporate level. They then pay out this after-tax
income to shareholders. Shareholders are then taxed again at the individual level.
Note: The United States corporate tax rate (including the state and federal levels) is 26%
after the Tax Cuts and Jobs Act. The global average is 23%, for comparison.
Corporations issue a 1099 to track dividend payments to shareholders. They are the simplest
and most common type of investment. They are also the least tax-advantaged.
Given the choice, corporations should be held in a retirement account to minimize taxes. Of
course, owning them in a taxable account is fine, one will just be paying taxes on dividends
received. Capital gains taxes are only triggered when a common stock is sold, making it tax
advantageous to buy and hold.
Capital gains taxes are divided into two types: short-term and long-term. Short-term capital
gains tax applies to investments held for less than a year. The short-term capital gains rate is
your ordinary income tax rate. It ranges between 10% and 37% depending on your income
bracket.
Long-term capital gains apply to most types of investments (including Corporations, REITs,
and MLPs) held longer than 1 year. The maximum long-term capital gains tax rate is 20%.
The minimum is 0%. Most investors will fall into the 15% long-term capital gains tax
bracket.
Dividend taxes are also divided into two types: ordinary and qualified. Most dividends paid
from blue-chip dividend stocks are ‘qualified.’ The requirements for a dividend to be
classified as ‘qualified’ are below:
• The company must be a U.S. corporation, or a foreign corporation that readily trades
on major U.S. exchanges, or be incorporated in a U.S. territory.
• The investor must have held the stock for 60+ days before the ex-dividend date.
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
Qualified dividends are taxed at the same rate as long-term capital gains; between 0% and
20% (though most investors will be in the 15% bracket). Ordinary dividends are dividends
that do not meet the criteria to be ‘qualified.’ Ordinary dividends are taxed at the ordinary
income tax rate.
Master Limited Partnerships (MLPs) MLPs are the most tax efficient vehicle for returning money to investors. They avoid the
double taxation issues of Corporations. MLPs are not taxed at the organization level.
Unfortunately, MLPs are also the most complicated.
Typically, somewhere around 80% to 90% of MLP distributions are considered a ‘return
of capital’ because of depreciation. You don’t pay taxes immediately on ‘return of
capital’ distributions.
Returns of capital reduce your cost basis in the MLP. You are not taxed until you sell the
units.
For example, imagine you buy 10 units of an MLP at $100 a unit for a total investment of
$1,000. Now imagine you hold for 5 years.
The MLP unit price has increased to $120. Your investment is now worth $1,200. It also paid out $37.50 per unit in distributions over this time, with 80% of that being a return of
capital ($37.50 x 80% = $30 return of capital).
The 20% of distributions that were not returns of capital would be taxed at your ordinary income tax rate, which is up to 37%. These taxes would be due the year they are accrued.
Your cost basis would be $700 (initial investment amount of $1,000 less return of capital
of $30 per unit or $300 total). The amount of long-term capital gains tax you owe (assuming you are in the 20% tax bracket) is $100.
Math Behind Example: Sale price of $1,200 less cost basis of $700 = $500 in capital
gains. $500 in capital gains x 20% tax bracket = $100.
As a caveat, if the cost basis ever falls below 0 (which will only happen after holding for
around a decade or more), you will owe long-term capital gains tax on the amount the
cost basis is below 0 every year.
Return of capital and other issues discussed above do not matter when MLPs are held in a
retirement account.
There is a different issue with holding MLPs in a retirement account, however. This
includes 401(k), IRA, and Roth IRA accounts, among others.
When retirement plans conduct or invest in a business activity, they must file separate tax
forms to report Unrelated Business Income (UBI) and may owe Unrelated Business
Taxable Income (UBTI). UBTI tax brackets go up to 37% (the top personal rate).
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
MLPs issue K-1 forms for tax reporting. K-1s report business income, expense, and loss
to owners. Therefore, MLPs held in retirement accounts may still qualify for taxes.
If UBI for all holdings in your retirement account is over $1,000, you must have your
retirement account provider (typically, your brokerage) file Form 990-T. You will want
to file form 990-T as well if you have a UBI loss to get a loss carryforward for subsequent tax years. Failure to file form 990-T and pay UBIT can lead to severe
penalties. Fortunately, UBIs are often negative. It is a fairly rare occurrence to owe
taxes on UBI.
The subject of MLP taxation can be complicated and confusing. Hiring a tax
professional to aid in preparing taxes is a viable option for dealing with the complexity.
The bottom line is this: MLPs are tax-advantaged vehicles that are suited for investors looking for current income. It is fine to hold them in either taxable or non-taxable
(retirement) accounts. Since retirement accounts are already tax-deferred, holding MLPs
in taxable accounts allows you to ‘get credit’ for the full effects of their unique structure.
Real Estate Investment Trusts (REITs) Like MLPs, REITs avoid double taxation. REITs are not taxed at the organization level. REITs are in between MLPs and Corporations in terms of both complexity and tax-
advantages. REITs are required to pay out 90%+ of their income.
REITs are organized as trusts. As a result, ‘shareholders’ are actually unit holders.
REITs issue 1099 forms (just like corporations) instead of K-1 forms (like MLPs do).
Unit holders receive distributions, not dividends (just like MLPs). REIT distributions fall into three categories:
• Ordinary income
• Return of capital
• Capital gains
Ordinary income is taxed at your ordinary income tax rate; up to 37%. Return of capital reduces your cost basis (just as it does with MLPs). Capital gains are taxed at either
short-term or long-term capital gains rates.
The percentage of distributions from these three sources varies by REIT. In general,
ordinary income tends to be the majority of the distribution. Expect around 70% of
distributions as ordinary income, 15% as a return of capital, and 15% as capital gains.
REITs are best suited for retirement accounts because the majority of their payments are taxed as ordinary income. Retirement accounts remove this negative and make REITs
very tax advantageous.
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This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.
This doesn’t mean you should never own a REIT in a taxable account. A good
investment is a good investment, regardless of tax issues. If you have the choice, REITs should definitely be placed in a retirement account such as an IRA or 401k.
Business Development Companies (BDCs) Much like REITs, business development companies must pay out 90%+ of their income
as distributions. Additionally, business development companies must derive 90% of their
gross income from interest, dividends, or capital gains on securities.
BDCs pay their distributions as a mix of:
• Ordinary income & non-qualified dividends
• Qualified dividends
• Return of capital
• Capital gains
Just as with MLPs, returns of capital reduce your tax basis. Qualified dividends and
long-term capital gains are taxed at lower rates, while ordinary income and non-qualified
dividends are taxed at your personal income tax bracket rate.
Unfortunately, 70% to 80% of BDC income is typically derived from ordinary income.
Because of this, they make excellent vehicles for tax-advantaged retirement accounts
such as an IRA or 401k.
Please email us at [email protected] with any questions you have on taxes
regarding retirement accounts, MLPs, REITs, and BDCs. Frequently asked questions
will be added to this tax guide.
As a newsletter provider, we can’t provide specific personal investment advice, only
general information.
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Disclaimer
Nothing presented herein is, or is intended to constitute, specific investment advice. Nothing in this newsletter should be construed as a recommendation to follow any
investment strategy or allocation. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While Sure Dividend has used reasonable efforts to
obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented
herein. No guarantee of investment performance is being provided and no inference to the contrary should be made. There is a risk of loss from an investment in securities.
Past performance is not a guarantee of future performance.
Glossary of Common Terms & Acronyms
Adjusted Funds From Operations (AFFO): A term used to describe Funds From Operations (FFO), plus non-recurring items that do not impact the long-term fundamentals of the business. See FFO in
this glossary for more.
Cash Available for Distribution (CAD): This term is also referred to as funds available for
distribution (FAD). It is the cash available to be distributed to unitholders. It is most commonly seen with REITs. CAD is calculated by subtracting recurring capital expenditures from funds from
operations.
Distributable Cash Flow (DCF): A non-GAAP (Generally Accepted Accounting Principles)
financial metric frequently utilized by Master Limited Partnerships as an alternative to earnings-per-share. Expresses cash available for unitholder distributions, after payments to the General Partner.
Calculated by adding non-cash items, such as depreciation and one-time expenses, to net income.
Viewed as a better gauge of financial health than earnings-per-share, as MLPs operate asset-heavy
business models with significant depreciation expenses.
Dividend Yield: The annual dividend returns from an investment, expressed as a percentage. The
dividend yield is calculated from the annual dividend per share, divided by the stock price per share.
MLPs and REITs pay distributions, not dividends. Distribution yield is used for them instead of
dividend yield, though some companies (notably REITs) call it a dividend for ease of understanding by
the public.
Dividend Payout Ratio: The percentage of earnings paid to shareholders as a dividend. The payout
ratio is calculated from the annual dividend per share, divided by annual earnings-per-share. For MLPs
and REITs, this is typically expressed as the distribution coverage ratio.
EBITDA: Earnings before interest, taxes, depreciation, and amortization. Used by companies with
high levels of depreciation and interest costs, such as MLPs, to indicate the financial health of a
business. A similar metric to operating cash flow. Frequently used as part of leverage ratios such as
debt-to-EBITDA.
Funds From Operations (FFO): A non-GAAP financial metric frequently utilized by Real Estate
Investment Trusts, as an alternative to earnings-per-share. FFO is calculated by adding depreciation
and amortization expenses to net income, minus any gains on asset sales. REITs view FFO as a more
accurate gauge of financial health, since earnings-per-share are heavily impacted by depreciation and
amortization expenses.
GAAP: Generally accepted accounting principles. These are legally required, standardized accounting
rules and procedures used when preparing financial statements.
If you read a term in The Sure Retirement Newsletter not on this list with which you are unfamiliar, please email [email protected]. We will explain the term and add it to the glossary in next
month’s edition.