Trades – INTC, OHI, TAL, CSCO, and ARCP

August Trades - Trading Screens

Close, but not quite there yet! I am getting closer to catching but from my summer blogging break, so let’s keep on moving along.

August was a big month of trading for me as I diversified some of my positions to better set my dividend growth portfolio up for some better performance going forward. While I ultimately envision holding roughly 30-40 positions in my dividend growth portfolio, my goal is to gain some additional exposure to companies with wide moats, defensible positions, and good value at the time of acquisition. Once I am able to add some additional capital on a regular basis, the actual sector allocation and relative weights will become much more important.

This diversification process started in July when I sold roughly half of my Prospect Capital (PSEC) position and invested the proceeds in Digital Realty Trust (DLR). You can see some of the details of that trade in my July passive income update.

August Trades

Sold Intel Corporation (INTC):

Intel-LogoMoving forward to August, my first move was to exit my Intel Corporation (INTC) position. The main reason I exited this position was the lack of dividend increase by management. The main goal of a dividend growth portfolio is to hold companies that are regularly and consistently increasing their dividend payments. I completely exited my INTC position and have limited my technology holdings to Cisco directly and DLR indirectly. This sale cost me $118.06 in forward twelve-month dividends.

Purchased Omega Healthcare Investors (OHI):

OHI_logoWith approximately half of the proceeds from the sale of INTC, I invested the proceeds into two different companies. The first, Omega Healthcare Investors (OHI) is a real estate investment trust (REIT) that focuses on owning skilled nursing facilities. Given the aging population and growing need for these services, I think OHI has a tremendous amount of long-term upside and a reasonable price. I purchased 47 shares of OHI for $1,427.64, giving me a cost basis of $30.38 per share. Given the dividend rate at the time of purchase of $0.47 per share, this purchase increased my forward twelve-month dividends by $88.36 and gave me a yield on cost of 6.19%.

Purchased Tal International Group (TAL):

TAL-logoUtilizing the second half of the INTC sale proceeds, I made an investment with Tal International Group (TAL). TAL is an intermodal container finance company, purchasing, leasing, and selling containers. These are the containers we’ve all seen on the backs of semi-trucks, container ships, and rail cars. TAL was appealing to me given the rising dividends, solid valuation, and great entry yield. I purchased 34 shares of TAL for $1,411.53, giving me a cost basis of $41.52 per share. Given the dividend rate at the time of purchase of $0.68 per share, this purchased increased my forward twelve-month dividends by $92.48 and gave me a yield on cost of 6.55%.

Sold Cisco Systems (CSCO):

cisco-logo2Later in August, I wanted to continue my diversification in my dividend growth portfolio, and took advantage of capturing some gains from CSCO, while reducing my technology exposure slightly. I still believe CSCO will remain in my portfolio for the long-term, but desired to trim the position back. As such, I sold 50 shares of CSCO, roughly half of my position. This sale cost me $34.00 in forward twelve-month dividends.

Purchased American Realty Capital Properties (ARCP):

ARCProperties-LogoReinvesting the proceeds from my sale of half of my CSCO position, I opened a position in another REIT, American Realty Capital Properties (ARCP). ARCP is a rapidly growing, triple-net lease commercial property investment company. Over the course of an 18-month period, ARCP has gone from a small REIT and by the middle of 2014 will be the largest in the industry, surpassing Realty Income (O), the industry leader. With strong prospects, active management team, and the potential for strong dividend growth, ARCP ticked several boxes for me. A bonus is the monthly dividend payments allowing for additional compounding from the more frequent payouts. I purchased 94 shares of ARCP for $1,222.24, giving me a cost basis of $13.00 per share. Given the dividend rate at the time of purchase of $0.07583 per share, this purchase increased my forward twelve-month dividends by $85.54 and gave me a yield on cost of 7.00%.

August Trade Summary

Heck of a busy month for me, with the subtraction of one position, the reduction of another, and the addition of three other positions. Overall, if you net the various increases and decreases in the forward twelve-month dividends, it resulted in a net increase of $114.32, bringing my total, prior to August dividend payments, to $1,103.71. Feels good to be back above the $1,000 dollar mark, and I don’t think I’ll dip below again. My portfolio now sits at a cost basis of $20,130.55 and an overall yield on cost of 5.48%.

Thanks for indulging me in going over and documenting my August trades as I continue to catch up from my blogging hiatus this past summer. I am getting closer to getting caught up completely and seeing how close I’ll come to my revised 2013 goals. Should be a fun tracking the last third of the year!

I have updated my Dividend Growth page with this information; additionally, this post can be found with all of my other trade posts under the Trades page.

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Flickr: andrewknots

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  1. Hi WYOR,
    I’ve been hearing good things about ARCP. Several of you guys seem to have stakes in the company. I think I need to take a look at that one. You bought it a few months ago… how are you feeling now?

    • Still pretty high on ARCP actually. I think they have a bright future and are making mostly accretive acquisitions. From a dividend perspective, they have already committed to increasing the dividends to $1.00 per share annually once the latest acquisitions go through this coming spring. For me, ARCP is a buy under $13.

      Thanks for stopping by Bryan.

  2. I came very close to closing out my INTC position back in September but decided to just reduce my position. I’m down to about 107 shares, so I’m leaning towards writing covered calls while I wait to see how they penetrate into mobile. I also purchased some ARCP and wouldn’t mind adding to my position, the growth has been amazing and I’m curious to see how management does once they get all of their acquisitions incorporated. Glad you’re back over $1k in forward dividends. It’s a nice little milestone when you know that you won’t be going back under that mark.

    • For INTC, it is just a matter of sticking to my guns on performance for dividend growth. As for ARCP, absolutely glad to have picked up some shares when I did, and am looking forward, like yourself, to seeing how their management transitions from acquisition mode to asset management mode. The ability to grow that dividend going forward is entirely dependent on how they manage that mindset transition.

      Thank you for stopping by JC!

  3. W2R,

    Nice moves here. I applaud you getting out of INTC. I reduced my position significantly, and am anxiously anticipating growth in the mobile segment in 2014. Further setbacks will likely cause me to sell the rest.

    I like ARCP here. The recent dividend hike is pretty juicy, and they’re going to raise it even further here pretty soon.

    Best wishes!

    • Jason, thanks for stopping by! I am glad to have gotten out of INTC and will no longer need to keep an eye out on that uncertain situation. The mobile market is getting more and more competitive and crowded and INTC, while well funded, is just plain late to the game.

      As for ARCP, I am very pleased with the recent hike, as well as the expected future hikes in the next six months to a year. Should be a good position for dividend growth.

  4. ARCP is a really solid stock,and yes as I also have a large position, am very happy with the progress for the long term as well, as management has their interests aligned with shareholders, and don’t know if anyone has seen it of late, but management is buying HUGE positions on the open market adding to their large positions already….Hey, got to be telling you something:)

    • I agree, management does indeed appear to have their interests aligned with the recent purchases. Never bothers me to see them add to their positions in anticipation of future increases.

      Thanks for stopping by Hrant!

  5. Interesting trades! WB too quit INTC if I’m not mistaken. I acquired some positions in TGH instead of TAL, even though TAL has been on my watch list for ever now.

    All reits are pretty much on sale now! I’ll be watching ARCP.

    • Can’t say I blame WB, and it doesn’t hurt to be in his company on things! TGH is a very viable option as a substitute for TAL. As for ARCP, as I’ve said elsewhere, I think they have some great growth potential, which is awesome for a holding yielding 7% like they do. I’d buy on anything under $13.

  6. W2R,
    August was a busy month. It turned out to be a good time to buy too. Sucks about the Intel dividend increase skip, but good to make a move out of it.

    • Definitely stinks about Intel, but I’m not going to hang around waiting. Technology stocks are tricky in general, so any time they aren’t performing up to the expectations (for dividends), they are prime to be dumped.

      Thanks for stopping by RBD!

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