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STORE Capital (STOR): Thank you, Warren Buffett

$STOR Announces that Berkshire Hathaway has invested $377 mlnin the company, representing 9.8% of total shares out… https://stocknews.com/news/stor-announces-that-berkshire-hathaway-has-invested-377-mlnin-the-company/

— StockNews.com (@StockNews) Jun. 26 at 05:50 AM

For the record, I owned $STOR before Warren Buffett 😉

— Charles Sizemore (@CharlesSizemore) Jun. 26 at 08:29 AM

Thank you, Mr. Warren Buffett.

Yesterday, up-and-coming triple-net retail REIT STORE Capital (STOR) got a major boost when the company annoucned that Buffett’s Berkshire Hathaway (BRK.B) had recently purchased nearly 10% of the company.

Prior to the announcement, STORE had been having a rough year.  Amazon’s (AMZN) assault on traditional brick-and-mortar retail has been unrelenting, and investors have responded by dumping high-quality, triple-net retail REITs like STORE.

Hey, I get it. As we saw with Spirit Realty Capital (SRC),  a struggling retail tenant can cause major headaches for a landlord, and investors worry that this is only the tip of the iceberg. But as is typical, they’ve overreacted and thrown out the baby with the bathwater.

To start, about two thirds of STORE’s portfolio is invested in properties that cater to services, including everything from movie theaters to preschools. The remaining third is split roughly evenly between retail properties and light industrial properties.

Unless Jeff Bezos can find a way to deliver your children via aerial drone to Amazon-operated preschools (and hey, it could happen…), STORE would seem pretty close to Amazon-proof.

It’s also worth noting that STORE’s insiders have been steady buyers of the stock.

InsiderPositionDateBuy/SellSharesTrade Price ($)Cost ($1000)
Long Catherine F.CFO, EVP and Treasurer5/10/2017Buy4,90520.39100.01
Sklar Mark N.Director5/10/2017Buy5,00020.34101.7
Donovan Joseph MDirector5/9/2017Buy5,00020.81104.05
William FranklinDirector3/15/2017Buy4,00022.9991.96
Seadler EinarDirector3/13/2017Buy4,44022.4699.72
Long Catherine F.CFO, EVP and Treasurer3/13/2017Buy5,55022.52124.99
Volk Christopher HPresident and CEO3/10/2017Buy11,10022.75252.53
Burbach Christopher K.EVP - Underwriting3/10/2017Buy5,50022.65124.58
Smith Quentin P. Jr.Director3/9/2017Sell1,40023.0632.28
Donovan Joseph MDirector12/1/2016Buy4,35024.15105.05

Source: GuruFocus

While I would never buy a stock purely because its insiders were buying, I definitely see it as a major positive. The people running the company are generally going to have a better grasp of its competitive challenges than passive investors reacting to news headlines.

At any rate, it will be interesting to see if Mr. Buffett’s purchase causes a wide-scale reevaluation of triple-net retail REITs or if this was simply a one-off event that will quickly fade. But while we’re waiting for the market to handicap all of this, I’m happy to continue collecting the 5.6% dividend indefinitely.

Disclosures: I’m long STORE Capital via my Dividend Growth portfolio.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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Monthly Dividend Stocks to Pay Your Bills

The following is an excerpt from 7 Monthly Dividend Stocks to Pay Your Bills.

I’m a big fan of monthly dividend stocks. Modern life is built around the idea of the monthly billing cycle: the mortgage payment, car payment, health insurance premiums, electricity, water and phone bills. Even Netflix! Virtually every regular expense we have runs on a monthly cycle, so why shouldn’t dividend stocks?

Bonds usually pay their coupon payments semiannually, and stocks generally pay their dividends quarterly. For retired investors living off of their portfolio income, this creates a mismatch. Expenses are regular, yet income is lumpy.

So, all else equal, monthly dividend stocks are a dream come true for investors. Now, some obvious, common-sense caveats apply here. You should never buy a stock because its dividend is paid monthly. The health of the underlying business, growth prospects, the quality of management and the stock’s valuation are all vastly more important than its dividend calendar.

But if I were hypothetically looking at two otherwise identical stocks, I’d clearly choose the stock with a monthly payout over the one with a quarterly payout. Some might argue that a monthly payout is nothing more than a cynical attention grabber designed to appeal to yield-starved retail investors. I disagree.

When I see a monthly payout, that tells me that management is making a real effort to give its investors what they want. So with that, let’s jump into our list of seven quality monthly dividend stocks.

I can’t make a list of monthly dividend stocks without including “The Monthly Dividend Company” itself, Realty Income Corp (O). Realty Income is easily one of the most uninteresting companies in the S&P 500, and I’m perfectly fine with that. When it comes to investing, boring is beautiful. Realty Income owns close to 5,000 properties leased to 250 scattered across 49 states and Puerto Rico. And all of its properties are leased under triple-net arrangements, meaning the tenant is responsible for all maintenance, taxes and insurance.

Once a tenant is moved in, Realty Income’s only responsibility is to cash the rent checks, which it then recycles into a steady monthly dividend. And about that …

As I write this, Realty Income has paid 562 consecutive monthly dividends and has raised its payout for 78 consecutive quarters. And at current prices, it yields a respectable 4.6%.

I own some shares of Realty Income that I expect will pay a good chunk of my retirement expenses a good 20-25 years from now when I actually retire. For now, I’m reinvesting the monthly dividends and watching my share count grow.

To finish reading the article, please see 7 Monthly Dividend Stocks to Pay Your Bills.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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Where to Look for 6%-Plus Yields

The following is an excerpt from 9 Dividend Stocks to Buy for 6%-Plus Yields.

Dividend plays with seriously high yields aren’t particularly easy to come by these days, at least not without stretching and probably taking more risk than we should. But for those willing to look, there are still plenty of dividend stocks to buy out there with yields of 6% or higher that also happen to be growing their dividend payout.

Not surprisingly, these high-yielding dividend stocks tend to be clustered in the real estate and energy sectors, where payouts are traditionally higher and where prices have really come down of late. But there are some real dividend gems to be found elsewhere too, in sectors as diverse as restaurants, video game retailers and even private equity firms.

Today, I’m going to recommend nine dividend stocks to buy, eight of which I own personally. Importantly, all have solid reputations as consistent dividend raisers. For me, this is the holy grail of investing: a high current yield and a dividend rising significantly faster than the rate of inflation.

Some of these stocks are a little on the speculative side, which is to be expected considering the S&P 500 yields a paltry 2% these days. Yet I consider all of these picks to be reasonably safe buys at current prices.

So with no further ado, let’s jump into it.

I’ll start with a stock I would have never expected to include in a list of dividend stocks to buy — video game retailer GameStop Corp. (GME).

The bears have been mauling this stock for years, citing the rise of downloadable video games vs. traditional discs or cartridges. And more recently, investors have been leery of anything related to traditional retail, as Amazon.com, Inc. (AMZN) continues to turn the industry upside down.

Yet if there is a crisis in retail, it certainly isn’t showing up in GameStop’s results.

Revenues have been flat since 2011, but the company has done a good job of managing costs, and margins have remained stable. Meanwhile, earnings per share have been boosted by a dramatic reduction of share count. Since 2009, GameStop has repurchased nearly 40% of its shares outstanding, and it has done so while keeping its debt load very reasonable.

Of course, dividends are our theme today, and on that count, GameStop doesn’t disappoint. At current prices, the stock yields a sweet 6.1%, and it has been raising its dividend aggressively. Over the past three years, GME has hiked its dividend by a cumulative 38%.

That’s not too shabby.

To read the rest of the article, please see 9 Dividend Stocks to Buy for 6%-Plus Yields.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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10 Best Dividend Stocks for the Market’s 10 Sectors

The following is an excerpt from 10 Best Dividend Stocks for the Market’s 10 Sectors.

I’ve been a big believer in piling money into the best dividend stocks, then staying there for a long time. Perhaps because the start of my career coincided with the nasty 2000-02 bear market, I’ve always taken the view that capital gains can be ephemeral. But a regular dividend represents realized profit I could hang my hat on.

Or so I thought.

I learned a nasty lesson back in 2008, and it’s one I’ll never forget. I was invested fairly heavily in the iShares Select Dividend ETF (DVY) and feeling smug about it. Sure, the market could take a tumble, but my high-dividend stocks would weather the storm better than most, right?

Wrong. During the 2008 meltdown, DVY actually lost more than the S&P 500 despite, in theory, being a “safe” dividend-focused fund.

So, what happened?

It came down to diversification, or rather the lack of it. DVY allocated to the highest-yielding dividend stocks that met its criteria … which meant it was massively overweighted to the financial sector. You can imagine how that worked out for me.

Today, we’re going to approach dividend investing a little differently, picking a solid dividend stock from each of the S&P 500’s 10 industrial sectors. And while 10 stocks isn’t what I’d consider a fully diversified portfolio, this will give you a good head start.

You could toss a dart at the stock page of the Wall Street Journal and have a good chance of hitting a very good dividend stock in the real estate sector. Real estate investment trusts (REITs) are some of the most reliable dividend payers out there, and many are on sale at the moment.

The inexorable rise of Amazon.com, Inc. (AMZN) has made investors rightly wary of the retail sector… and of the landlords that serve them. But not all real estate is at risk of being made irrelevant by Jeff Bezos.

As an example, consider Realty Income Corp (O), the “monthly dividend company.” Realty Income owns properties that, if not “Amazon-proof,” are at least “Amazon-resistant.” It tends to own pharmacies, gyms, movie theaters and other high-traffic properties.

Realty Income yields 4.5% and has raised its dividend for 78 consecutive quarters. That’s not too shabby.

To read the full article, see 10 Best Dividend Stocks for the Market’s 10 Sectors.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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10 Monthly Dividend Stocks to Pay the Bills

Earlier this month, I wrote “10 Monthly Dividend Stocks to Buy to Pay the Bills.” The following is an excerpt:

I like making money in the stock market. But I love dividends. You see, the problem with capital gains is that in order to actually enjoy them, you have to sell you shares. But the beauty of dividend stocks is that you get to enjoy the fruits of your investment without having to actually sell anything. Think of it as milking a cow rather than killing it for meat. Which sounds like the better long-term plan to you?

But even most dividend stocks are imperfect, as dividends are usually paid quarterly. This problem with this is that most of our expenses tend to be monthly, so when you depend on dividends to pay your bills, there is always something of a disconnect between you income and your expenses. This can make budgeting something of a challenge.

Thankfully, monthly dividend stocks do exist, and there are actually quite a few of them out there.

Today, we’re going to look at 10 solid monthly dividend stocks to buy. Many of these names are popular among income investors, but others will almost definitely be new to you. Importantly, all have a long history of taking care of their shareholders with consistent monthly dividend checks.

Realty Income (O)
Dividend Yield: 4.4%
Type: Commercial REIT

Realty Income Corp (O) styles itself as “the Monthly Dividend Company,” and frankly, this conservative retail real estate investment trust (REIT) deserves the title of king of the monthly dividend stocks. Realty Income has paid its investors like clockwork for 559 consecutive months and raised its dividend for 77 consecutive quarters. And O has given no indication of slowing down.

Realty Income has raised its dividend at a 4.7% annual clip for over three decades running.

A stocks is always going to be considered more risky than a bond, but Realty Income is about as close to a bond as you can realistically get in the stock market. Its cash flows are backed by long-term leases to high-quality tenants. Its properties are generally high-traffic retail sites that are mostly recession proof and “Amazon.com proof.” Think of your local convenience store or pharmacy. Chances are decent that Realty Income owns it.

In the interests of full disclosure, I own some shares of Realty Income that I bought nearly a decade ago and that I never intend to sell. I’ve been reinvesting my dividends, slowly building up my share count. One of these days, I’ll flip the switch and start taking those dividends in cash. But for now, I’m enjoying watching the number of shares that I own increase with every passing month.

You can read the read the rest of the article here.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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