ACRE, AFIN, CL, DNNGY, EMA:CA, FDVV, FHB, IBM, MDLZ, MTB, OHI, REYN, RSHYY, SLG

Economy: 

Pfizer's Covid antiviral pill may cut severe illness by 89 percent; Pfizer’s Novel COVID-19 Oral Antiviral Treatment Candidate Reduced Risk of Hospitalization or Death by 89% in Interim Analysis of Phase 2/3 EPIC-HR Study | Pfizer Pfizer's antiviral pill is used in combination with the HIV drug Ritonavir. 

The BLS reported earlier today that the economy added 531,000 jobs last month. Average hourly earnings increased by 11 cents. Over the past 12 months, average hourly earnings have increased 4.9%, less than the CPI increase. The average work week decreased by .1 to 34.7 hours. The BLS revised the August and September job numbers by a combined 235,000. Employment Situation Summary - 2021 The U-6 number declined to 8.3% from 8.5%. Table A-15. Alternative measures of labor underutilization - 2021 M10 Results

ADP says 571,000 new jobs created by private businesses in October-MarketWatch The consensus estimate was for 395K. ADP revised up its September estimate to 568K from 523K. ADP National Employment Report | October 2021

Fed decision: Taper timetable as it starts pulling back on pandemic-era economic aid The FED will reduce its $120B in monthly asset purchases by $15B, a meaningless gesture IMO. The FED still views the problematic inflation numbers to be transitory. 

The FED will, commencing in December, "increase its holdings of Treasury securities by at least $60 billion per month and of agency mortgage-backed securities by at least $30 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook." Federal Reserve Board - Federal Reserve issues FOMC statement (11/3/21)

China economy shows signs of stagflation, price inflation: Economists

Mondelez to raise prices by 7% in 2022

+++

Markets and Market Commentary: 

Five Stocks With Safe and Growing Dividends | Barron's Of the 5 stocks mentioned, I currently own 4 out of the 5 stocks mentioned (AEP, GILD, LMT, and MET) I do not own Sempra Energy (SRE) since I avoid utility companies based in California. 

The ten year treasury yield has fallen about 3 basis points in response to the FED's taper announcement. 

Daily Treasury Yield Curve Rates The ten year yield declined 7 basis points yesterday, closing at a 1.53% yield. The breakeven inflation rate embedded in the ten year TIP price closed at 2.56%, which is the annual average CPI over the next ten years for the buyer of the 10 year TIP to breakeven with the buyer of the 1.53% nominal 10 year. The real yield on the ten year TIP closed at -1.03%. 

Some pundits explain the decline in terms of the FED providing clarity. What is clear about a statement that the FED will buy "at least" $90B per month in treasuries and mortgage backed securities starting in December. That is mushy IMO. Interest rates are probably falling in response to a consensus recognition that the FED's baby step will have no impact on its rate suppression far below the current CPI and the anticipated inflation embedded in the pricing of TIPS. 

A bargain you can't ignore: Small-cap stocks are trading at their second-biggest discount in 20 years - MarketWatch  This analysis compares the forward P/E ratios for the S & P Small Cap 600 with the S & P 500. The 20 year average is 98% compared to 72% now. This kind of comparative analysis is useful in asset allocations, but it does not really address whether stocks are overvalued, undervalued or fairly valued IMO. The forward non-GAAP P/E estimates may prove to be way off, as they have in the past. Importantly, assumptions are being made that the economy will continue its upward trajectory even after the federal government no longer tallies annual deficits measured in trillions. Historically extremely abnormal monetary stimulus appears likely to be the new normal, at least until there are several years of problematic inflation so significant that the FED will have no choice but to revert to normal policies (that is, no Q/E at all and a rapid increase in the federal funds rate to mid-single digit levels or higher) 

The Treasury's inflation savings bond reset for six months at a 3.56% rate. Individual - Series I Savings Bonds Rates & Terms: Calculating Interest Rates The inflation component of the rate resets on 5/1/22 This is the only Treasury security that can be purchased that will avoid negative real returns using the CPI inflation rates predicted in TIPs. I own this security in my Treasury Direct account. The maximum annual purchase amount is $10K ($5K if the buyer wants the paper certificate) The IBond purchased today would not have a yield in excess of CPI since the fixed component part is still at zero. When these savings bonds were first issued in 1998, the fixed rate component was at 3.4%. The buyer of this security then would consequently have a 6.96% coupon rate for the 6 month period starting on 11/1/21, rather than 3.56% for the buyer today.  I discuss this security more fully in a 2016 SeekingAlpha post. Buying IBonds Through Treasury Direct, see also my posts summarizes my consideration for buying TIPs in the secondary market: Update On Buying TIPs In The Secondary Market and The Mechanics Of Purchasing A TIP In The Secondary Market 

Peloton stock tanks on weak holiday forecast, CFO admits 'we underestimated the reopening impact on our company' - MarketWatch I have no position and do not contemplate establishing one. 

++++

Earnings Reports-Owned Stocks: 

AbbVie ((ABBV) Sec Filed Earnings Press Release (Non-GAAP E.P.S. = $3.33 with the consensus at $3.227 per Fidelity; GAAP E.P.S. = $1.78; GAAP includes a 1.904B intangible asset amortization which is properly ignored IMO; revenues = $14.342B, up 11.2% on a GAAP basis; Humira generated worldwide revenues of $5.425B; Other drugs with over $500M in worldwide revenues: Skyrizi = $796M, Imbruvica = $1.374B, Botox Therapeutic = $645M, Botox Cosmetic = $545M; Greater than $400M = Vraylar  = $461M; Rinvoq = $453M; Venclexta = $492M, Mavyret = $426M; raised its "GAAP diluted EPS guidance for the full-year 2021 from $6.04 to $6.14 to $6.29 to $6.33. AbbVie is raising its adjusted diluted EPS for the full-year 2021 from $12.52 to $12.62 to $12.63 to $12.67. The company's 2021 adjusted diluted EPS guidance excludes $6.34 per share of intangible asset amortization expense, non-cash charges for contingent consideration adjustments and other specified items."; Board increased the quarterly dividend by 8.5% starting with the February 2022 payment)

American Electric Power (AEP) SEC Filed Press Release (Non-GAAP E.P.S. = $1.43 with the consensus at $1.457 per Fidelity; non-GAAP net income = $717M; GAAP E.P.S. $1.59; the "difference between 2021 GAAP earnings and operating earnings for the quarter was due to the mark-to-market impact of economic hedging activities"; narrowed "2021 operating earnings (non-GAAP) guidance range to $4.65 to $4.75 per share, raising midpoint to $4.70)

Bluerock Residential REIT (BRG) SEC Filed Press Release (Core FFO = $5.4M or $.15 per share; occupancy at 96.2%; "repurchased 2,977,477 shares of Class A common stock during the quarter at an average price of $11.34 per share."; "same store average rent increased 7.1%") 

Chevron (CVX) SEC Filed Press Release (GAAP E.P.S. = $3.19 based on net income of $6.1B; non-GAAP E.P.S. = $2.96 with the consensus at $2.208 per Fidelity; non-GAAP excludes a $260M gain from an asset sale and a $107M pension settlement cost; free cash flow of $6.7B; repurchased $625M in stock; "The average sales price for crude oil and natural gas liquids in third quarter 2021 was $68 per barrel, up from $39 a year earlier. The average sales price of natural gas was $6.28 per thousand cubic feet in the third quarter, up from $3.89 in last year’s third quarter."; "Net oil-equivalent production of 1.13 million barrels per day in third quarter 2021 was up 145,000 barrels per day from a year earlier. The increase was due to an additional 224,000 barrels per day of production following the Noble Energy acquisition, partially offset by a 69,000 barrels per day decrease related to the Appalachian asset sale. The net liquids component of oil-equivalent production in third quarter 2021 increased 15 percent to 842,000 barrels per day, and net natural gas production increased 13 percent to 1.71 billion cubic feet per day, compared to last year’s third quarter.")   

Dime Community Bancshares (DCOM) SEC Filed Earnings Press Release GAAP E.P.S. = $.89; Non-GAAP at $1.01 with the consensus at $.788 per Fidelity; adjustments are for acquisition expenses and branch restructuring costs; credit loss recovery of $5.2M; NIM = 3.2%, up from 2.92% in the 2020 third quarter, adjusted NIM at 3.1% which excludes interest income created by the purchase accounting accretion rule; adjusted efficiency ratio = 46.9%; NPL ratio = .37%; Coverage ratio = 238.84%; Tangible book value per share = $22.61)

Financial Institutions (FISI) SEC Filed Press Release (E.P.S. = $1.05 with the consensus at $.893 per Fidelity; net income = $16.8M;  NIM = 3.07%, down from 3.22% in the 2020 third quarter; Efficiency Ratio = 57.76%; NPL Ratio = .18%; NPA Ratio = .12%; Coverage Ratio = 681%; ROA = 1.27%; ROE = 13.94%; ROTE = 16.5%; dividend payout ratio = 25.47%; tangible book value per share = $25.38, up from $22.76 in the 2020 third quarter). My AC per share is currently at $14.78. Item # 1.F. 

First Busey (BUSE) SEC Filed Earnings Press Release (GAAP E.P.S. = $.46, adjusted to $.58 with the consensus at $.524 per Fidelity; adjustments include acquisition, restructuring and amortization expenses; NIM = 2.41%, down from 2.75% in the 2020 third quarter; NPA Ratio = .23%; Coverage Ratio = 358.86%; Charge off ratio - .04%; other ratios skewed by extraordinary items; tangible book value per share = 17.09, up from $16.32 in the 2020 third quarter) My average cost per share is at $17.45. Item # 2.B. 

First Financial Northwest (FFNW) SEC Filed Press Release (E.P.S. = $.34 with the consensus at $.29 per Fidelity; net income = $3.2M; NIM = 3.33%, up from 3.07% in the 2020 third quarter; efficiency ratio = 67.26%, viewed as too high IMO; in what may be described as incredible, the both the NPL and NPA ratios are at zero; Charge off ratio = net recovery of .01%; total capital ratio = 15.5%; tangible book value per share = $16.86). In my Schwab taxable account, my average cost per share is currently at $9.30 and at $9.46 in my Fidelity account. Item # 1.J. Schwab Account (contains snapshot of Fidelity account position; buy discussion at Item # 1.B. Started FFNW in Schwab Taxable- Bought 10 at $9.55; 5 at $9.05 (10/3/20 Post)

Fortis (FTS) Press Release (All amounts are in Canadian dollars; Net income = $295M or $.63 per share; adjusted E.P.S. at $.64; increased common share dividend  "~6%, marking 48 years of consecutive increases"; "reaffirmed 6% average annual dividend growth guidance through 2025.")

Global Net Lease (GNL) SEC Filed Press Release (AFFO per share = $.44 with quarterly dividend at $.40 per share; the consensus estimate was for $.44, down from $.46 in the 2020 third quarter; portfolio 99.1% leased with a remaining 8.2 years weighted average lease term; contractual rent increases in 94% of leases; debt had a weighted average interest rate of 3.4% with a weighted average maturity of  4.5 years as of 9/30/21) 

Hologic (HOLX) SEC Filed Earnings Press Release (this report is for the 4th fiscal quarter ending 9/25/21; GAAP E.P.S. = $1.28; Non-GAAP E.P.S. = $1.61 with the consensus at $1 per Fidelity; the primary adjustment to GAAP is a $92M amortization non-cash expense for acquired intangible assets; non-GAAP net income = $415.7M; Hologic has been using its cash bonanza from Covid tests to acquire other businesses; "COVID-19 assay revenue of $443.3 million decreased (26.3%), or (26.8%) in constant currency. COVID-19 related revenue, which is revenue from products such as collection kits that depends in part on COVID-19 test demand, was $63.8 million in the fourth quarter, an increase of 1.1%, or 0.7% in constant currency, compared to the prior year period."; "on a trailing 12 months basis, adjusted Return on Invested Capital (ROIC) of 32.6% increased 1,410 basis points compared to the prior year period."; "debt outstanding at the end of the fourth quarter was $3.05 billion. The Company ended the quarter with cash and equivalents of $1.17 billion, and a net leverage ratio (net debt over adjusted EBITDA) of 0.6."; for fiscal 2022, HOLX guides non-GAAP E.P.S. to $3.55 to $3.85, reflecting a substantial decreased of between 57.8% to 54.2% compared to $8.41 for fiscal 2021 in Covid testing revenue; diluted GAAP E.P.S. for Fiscal 2021 was $7.21)

Horizon Bancorp (HBNC) SEC Filed Press Release (E.P.S. = $.52 with the consensus at $.438 per Fidelity; net income = $46.5M; NIM = 3.17%, down from 3.27% in the 2020 third quarter; efficiency ratio = 54.88%; NPL Ratio = .80%; Charge off ratio = zero; GAAP ROA = 1.41%, adjusted to 1.4%; ROE = 12.64%;  "repurchased 430,026 shares at an average cost of $17.74 per share for a total cost of $7.6 million. This resulted in a reduction in tangible book value of approximately $0.18 per share and an increase in EPS of $0.01 per share for the third quarter."; total capital ratio = 15.27% at holding company level; tangible book value per share = $12.05) In my Schwab account, my average cost per share is at $10.28. The shares owned in my Fidelity taxable account have an AC of per share $10.24.   

Office Properties Income Trust (OPI) SEC Filed Earnings Press Release (Normalized FFO per share = $1.24; CAD per share = $.64 or $30.9M; quarterly dividend per share = $.55; occupancy all properties = 89%; the largest deductions from FFO are $26.341M in "recurring" capital expenditures, which involves routine maintenance of the properties, and $3.924M in pretend cash created by the straight line accounting convention; the OPI report highlights the problem that I discussed in my last post with BDN's reports)  

Pfizer (PFE) SEC Filed Press Release (GAAP E.P.S. at $1.42; adjusted E.P.S.  = $1.34 with the consensus at $1.086; adjusted net income = $7.687B; revenues = $24.1B; raised 2021 revenue guidance to $81B to $82B and adjusted E.P.S. to $4.13 to $4.18; for 2021, anticipates $36B in revenue from its Covid vaccine "Comirnaty"; revenues excluding Comirnaty rose 7% to $11.1B; Xeljanz revenues, a JAK inhibitor, were down 13% in the U.S., reflecting in part "the negative impact of a review by the U.S. Food and Drug Administration (FDA) which resulted in a Drug Safety Communication (DSC) related to Xeljanz and two competitors’ arthritis medicines in the same drug class"; see also Pfizer’s Novel COVID-19 Oral Antiviral Treatment Candidate Reduced Risk of Hospitalization or Death by 89% in Interim Analysis of Phase 2/3 EPIC-HR Study | Pfizer)  

Piedmont Office Realty (PDM) SEC Filed Earnings Press Release and Supplemental Filing (core FFO per share = $.50; 2021 core FFO per share share guidance now at $$1.95- $1.98; "Debt-to-Gross Assets ratio was 34.4% as of September 30, 2021"; revenues = $60.2M; AFFO, which deducts maintenance expenses and pretend revenues created by the straight line accounting convention reported at $41.213M or about $.33 per share; the abbreviation AFFO and CAD would mean the same here; quarterly dividend at per share = $.21; leased at 85.6%; number of properties = 54; "issued $300 million in aggregate principal amount of 2.75% Senior Notes due 2032 and used the proceeds to repay its Amended and Restated $300 million Unsecured 2011 Term Loan that was scheduled to mature in November of 2021."; SU debt rated at BBB/Baa2; no mortgage debt)

Sanofi (SNY) SEC Filed Press Release (IRFS E.P.S. = €1.85, up 19.1%; "Business" E.P.S. = €2.18; IRFS net profit €2.317B, beating the FactSet consensus at €2.06B; revenues = €10.432B with FactSet consensus at €10.33B; free cash flow = €2.202B; Dupixent revenues = €1.41B, up 54.6% at CER with 9 month revenues at €3.7B; vaccines = €2.422B, up 16.5% in CER with no Covid 19 vaccine)

Seagate Technology (STX) SEC Filed Press Release (Non-GAAP E.P.S. = $2.35 with the consensus at $2.21 per Fidelity; non-GAAP net income = $544M; GAAP E.P.S. = $2.28; revenues = $3.115B; operating margin = 20.1%, up from 12.7%; raised the quarterly dividend to $.70 per share, up from $.67; for the current quarter, STX estimates non-GAAP E.P.S. of $2.35, plus or minus $.15; the primary difference between GAAP and Non-GAAP is share based compensation)

Shore Bancshares (SHBI) SEC Filed Press Release (GAAP E.P.S. = $.39 based on net income of $4.031M; GAAP includes a $538K expense relating to SHBI's acquisition of  Severn Bancorp; adjusted E.P.S. = $.44 (my calculation) with the consensus at $.40 per Fidelity; NIM = 2.99%, down from 3.17% in the 2020 third quarter; NPL Ratio = .15% ; NPA Ratio = .19%; Charge off ratio: small net recovery; tangible book value per share  = $15.55) My average cost per share is currently at $10.65. Item # 1.D. 

STAG Industrial (STAG) SEC Filed Press Release (Core FFO per share = $.53, up 15% compared to the 2020 third quarter; "Cash Available for Distribution of $72.4 million for the third quarter of 2021, an increase of 32.1% compared to the third quarter of 2020 of $54.8 million.";"Occupancy Rate of 95.9% on the total portfolio and 96.8% on the Operating Portfolio as of September 30, 2021.";  "sold eight buildings in the third quarter of 2021, consisting of 711,050 square feet for $39.4 million, resulting in a net gain of $22.7 million.") I own STAG in several of my accounts including 2 Roth IRAs. The average cost per share on a total portfolio basis is close to $17 per share. Dividends are paid monthly. I last pared my Schwab account position down to 100+ shares with a $17.56 AC per share. Item # 1.G. (4/1/21 Post) The stock declined yesterday due to a stock offering. STAG Industrial Announces Pricing Of Public Offering Of Common Stock 

TCG BDC (CGBD) SEC Filed Press Release (Net investment income per share = $.39 with the consensus at $.371 per Fidelity; net asset value per share = $16.65, up from $16.14 as of 6/30/21; paid during the 3rd quarter its regular dividend of $.32 and a special dividend of $.05; announced a $.32 per share dividend and a $.07 special dividend for the 4th quarter;  "As of September 30, 2021, the total weighted average yield for our first and second lien debt investments on an amortized cost basis was 7.69%, which includes the effect of accretion of discounts and amortization of premiums . . . As of September 30, 2021, on a fair value basis, approximately 1.5% of our debt investments bear interest at a fixed rate and approximately 98.5% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors.")

Valley National  (VLY) SEC Filed Press Release (Non-GAAP E.P.S. = $.30 with the consensus at $.295 per Fidelity; non-GAAP net income = $124.7M; GAAP E.P.S. = $.29; NIM = 3.15%, up from 3.01% in the 2020 3rd Q; adjusted efficiency ratio = 49.16%; NPL ratio = .77%; Coverage ratio = 136.01%; Charge off ratio = zero; ROTE = 14.64%; total capital ratio = 13.24%; tangible book value per share = $7.78, up from $7.12 in the 2020 3rd Q.) I own VLY in my Fidelity and Schwab taxable accounts, with the average cost per share at $7.39 and $7.36 respectively. Only two purchases were discussed here: Item # 1.K. and  Item #1.I. 

West Bancorporation (WTBA) SEC Filed Earnings Press Release and 10-Q (E.P.S. = $.76 with the consensus at $.71 per Fidelity; NIM = 3.06%, down from 3.21% in the 2020 third quarter; efficiency ratio = 39.41%; Texas Ratio = 3.24%-excellent; Charge off ratio = .01%; NPA Ratio = .28%; NPL Ratio = .38%;  ROA = 1.52%; ROE = 20.02%; dividend payout ratio = 31.27%; tangible book value per share = $14.89 per Reuters) For shares owned in my Fidelity taxable account, the average cost per share is currently at $15.52. I also own WTBA shares in my Schwab account with a $16.37 AC per share. Item # 2.F. - Fidelity Taxable 

W.P. Carey (WPC) SEC Filed Earnings Press Release (AFFO = $230.7M or $1.24, up 78% from the 2020 third quarter; affirmed 2021 AFFO range between $4.94 and $5.02; quarterly dividend raised to $1.052 per share; revenues = $325M, up 7.7%) 

++

'Patriot Purge': Tucker Carlson’s Sinister New Documentary - The Atlantic  

Greg Kelly, a Newsmax Anchor, Says Jan. 6 'May Have Been False Flag Operation'

The results in last weeks elections in Virginia and New Jersey do indicate that the Democrats are in trouble in 2022 and are likely to become the minority party in both the Senate and the House. 

Biden won in Virginia by 10+%. The Trumpster Glenn Youngkin defeated the former Democrat governor Terry McAuliffe who I view as a stronger candidate than Biden. The incumbent Democrat governor in NJ barely won reelection. I also noted that a retired truck driver with no political experience, and almost no campaign funds, defeated the NJ state senate majority leader.  Spending $2,300, GOP Newcomer Ed Durr Beats Top NJ Lawmaker 

++++

1. Bought 100 EMA:CA at C$58.18 (IB C$1 Commission):

Quote: Emera (EMA.TO) 

Closing Price 11/4/21: EMA.TO C$58.36  +C$0.76 +1.32% 

"Emera Inc. is a geographically diverse energy and services company headquartered in Halifax, Nova Scotia, with approximately $31 billion in assets and 2020 revenues of more than $5.5 billion. The company primarily invests in regulated electricity generation and electricity and gas transmission and distribution with a strategic focus on transformation from high carbon to low carbon energy sources."

Website: Home | Emera

September 2021 Investor Presentation.pdf 

Regulated Companies | Emera In the U.S., Emera owns Tampa Electric, Teco Peoples Gas and New Mexico Gas Company. The Canadian regulated utilities are Nova Scotia Power, Emera Newfoundland & Labrador, and Emera New Brunswick.    

This is my first purchase of Emera's common stock.  

I have owned Emera's reset equity preferred stocks and 4 of Emera Finance bonds which have matured.  I no longer own any of its preferred stocks after eliminating my last remaining position in EMAPRC.CA. Item # 1.A. (3/27/21)(profit snapshot = C$747).  

Investment Category: Bond Substitute with Dividend Growth 

Dividend: Quarterly at C$.6625 per share (C$2.65 annually), last raised from $.6375 effective for the 2021 4th quarter.  Dividend Payment History | Emera 

The company has a good track record in increasing the dividend and an above average starting yield for an electric utility company now. 

Yield at C$58.18 = 4.55% rounded

Last Ex Dividend: 10/29/21 (day after purchase)

Last Earnings Report (Q/E 6/30/21):  Emera-Q2-2021-MD-A-FINAL-Aug-10-2021.pdf

Adjusted Net income = C$137M

Adjusted E.P.S. = C$.54

Adjusted revenues = C$1.137B

Adjusted EBITDA = C$529M

Emera is scheduled to release its third quarter report next week. 

2. Small Ball: 

A. Eliminated IBM-Sold 9 at $139.39: 

Quote: International Business Machines Corp.

IBM SEC Filings

IBM Investor relations

IBM Analyst Estimates | MarketWatch

Profit Snapshot: $299.9 (9/29/21 Sale only)

Last Buy Discussions: Item # 2.G. Added 1 IBM at $95, 1 at $100; 1 at $102.75; 1 at $105.5; 1 at $92 (5/2/2020); Item # 1.C. Added 1 IBM at $116.16 (8/8/20 Post)

I mentioned eliminating my IBM position in a 10/22/21 comment. 

IBM spun off 80.1% of Kyndryl Holdings (KD) yesterday, a company engaged in managed IT services. IBM Spinoff Kyndryl Starts Trading. Now It Needs to Figure Out How to Grow. | Barron's This part of IBM's business generated adjusted revenue of $19.1B last year. IBM shareholders received 1 share of Kyndryl for every 5 shares of IBM. I sold my IBM shares before the ex-distribution date. IBM's $19 Billion Spinoff | The Motley Fool 

KD declined in its first day of regular trading. KD $26.38 -$2.12 -7.44% I will buy 1 KD share just to better monitor the price action. 

Dividend: The quarterly dividend rate was at $1.63 per share. The dividend will likely be cut, with the company using the Kyndryl spin off as the excuse. International Business Machines Corporation Common Stock (IBM) Dividend History | Nasdaq This has not yet been announced, however. 

The New IBM: Revenue Growth, More Free Cash Flow, and (Probably) a Dividend Cut | The Motley Fool

Last Earnings Report (Q/E 9/30/21): Just another blah report. The Stock Jocks had a negative reaction to it, sending the price down to $128.33 after a close at $141.9. IBM Historical Prices  

SEC Filed Press Release 

Non-GAAP E.P.S. = $2.52, down 2% Y-O-Y

Revenues = $17.62B, with consensus at $17.79B

Cloud and Cognitive Software revenues were reported at $5.69B vs. the consensus at $5.77B.

Discussed at IBM earnings Q3 2021.

Last Sell Discussions: Item # 2.M. Sold 1 IBM at $151.33 (6/25/21 Post); Item # 2.I. Pared IBM-Sold 1.308 at $132.95; 1 at $136.75; 1.215 at $138.41; 1 at $140.13;  4 at $145 and ,418 at 148.01 (5/8/21)

Current Position: None and none expected

B. Bought 10 ACRE at $15.52: 

Quote: Ares Commercial Real Estate Corp. 

I classify this company as a mortgage REIT. 

"Ares Commercial Real Estate Corporation . . . is a specialty finance company primarily engaged in originating and investing in commercial real estate loans and related investments. . . .The Company’s target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investments, including commercial mortgage backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self storage, student housing, residential and other commercial real estate properties, or by ownership interests therein."

Management: External 

ACRE SEC Filings

Website: Ares Commercial Real Estate 

2020 Annual Report (risk summary starts at page 11 and ends at page 51)

Investment Category: Bond Substitute 

Last Earnings Report (Q/E 9/30/21): This report was released after my purchase. SEC Filed Press Release

GAAP E.P.S.  =$.21 

Distributable Earnings per share = $.37

Consensus at $.34

Reconciliation of GAAP to Distributable Net Income: 

Regular dividend: $.33

There have been occasional supplemental dividends. 

ACRE-Dividends

Yield at $15.52:  (regular dividend only)

Last Ex Dividend:  9/29/21

Next Ex Dividend Date: 12.30/21

Taxation of 2020 Dividends: Tax Treatment.pdf

The stock recently dipped last June in response to a stock offering. Ares Commercial Real Estate Corporation Announces Pricing of Offering of Common Stock (6/18/21); Prospectus; ACRE Historical Prices 

I prefer to avoid mortgage REITs altogether but the FED's Jihad Against the Savings Class, now in its second decade, has worn me down and made me more willing to accept more risky investments in very small doses.  I cried uncle but that did not seem to help. Prayers for a normal risk free yield have so far been ignored or deemed inappropriate in that medium. 

C. Added to OHI-Bought 1 at $30.92; 1 at $30.49; 1 at $29.86; 2 at $29.81:  

Quote: Omega Healthcare Investors Inc. (OHI)

OHI SEC Filings

2020 Annual Report (risk factor summary starts at page 14 and ends at page 27)

Website: Omega Healthcare Investors, Inc.

Last Discussed: Item # 1.I. Restarted OHI - Bought 4 at $32.94, 1 at $31.44 (9/24/21 Post) 

OHI owns nursing homes and consequently would have been negatively impacted by the pandemic. Many of its tenants did not have stellar balance sheets before the pandemic which weakened them further financially. 

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

I view nursing homes REITs as the riskiest in the REIT sector . 

OHI Trading Profits to Date: $1,503.51

Average Cost per share =  $31.55 (11 shares)

Dividend: Quarterly at $.67 per share, last raised from $.66 effective for the 2019 4th quarter payment.  

Dividends – Omega Healthcare Investors, Inc.

I am currently reinvesting the dividend. 

Yield at AC = 8.49% rounded

Last Ex Dividend: Yesterday, 11/4/21 (owned all as of)

Last Earnings Report (Q/E 9/30/21): This report was released after my purchases. 

SEC Filed Press Release 

FFO per share = $.73

FFO at $180.658M

AFFO per share = $.85

AFFO = $208.814M

Funds Available for Distribution: $198.791M

FAD per share: $.806

Dividend: $.67

Cash Flow Computations: 

Goal: Harvest dividend and sell at any profit before any ROC adjustments to the tax cost basis. 

Maximum Position: 100 shares

Purchase Restriction: Each subsequent purchase must reduce my average cost per share. 

D. Pared FHB in Fidelity Account-Sold Highest Cost 5 shares at $29.86: 

Quote: First Hawaiian Inc. (FHB)

SEC Filings

2020 Annual Report

FHB Analyst Estimates | MarketWatch

Investment Category: Regional Bank Basket Strategy

Profit Snapshot: $31.19 (9/27/21 sale only)

Average Cost per share before pare = $18.02

Average Cost after pare = $17.36 (43 shares)

Snapshot Intraday on 9/27/21 after pare

Dividend: Quarterly at $.24 per share, last raised from $.24 effective for the 2020 first quarter payment. FHB Dividend History 

Dividend reinvestment has been turned off. 

Yield this Account: 5.53%

Subsequent to this pare and the one discussed below, BofA downgraded FHB to underperform with a $33 PT. I do not have a copy of that report. 

Last Earnings Report (Q/E 9/30/21): First Hawaiian (FHB) SEC Filed Earnings Press Release 

E.P.S. = $.5; 

consensus at $.478 per share per Fidelity; 

net income of $64.3M; 

"Recorded a $4.0 million negative provision for credit losses"; 

GAAP efficiency ratio = 55.07%; 

NPL Ratio = .07%; 

ROE = 9.31%; 

ROA = 1.02%; 

ROTE = 14.63%; 

tangible book value per share = $13.38; 

total capital ratio = 13.38%; 

number of branches = 54

Many of these ratios are slightly higher using FHB's calculation of "core" earnings that produced an E.P.S. of $.51. The adjustment to GAAP numbers was for severance costs.

E. Pared FHB in Schwab Taxable-Sold 5 at $29.86-Highest Cost Lot: 

See Item # 1.D. above. 

Profit Snapshot: $30.76

Average Cost before pare: $18.85

Average Cost after pare = $18.25 (40+ shares)

Details for Remaining Lots this Account: 

Yield this Account = 5.26%

Other Sell Discussions: Item # 3.H. Pared FHB in Fidelity Account- Sold 12.468 at $29.06 (7/9/21 Post); Item # 1.P. Pared FHB in Fidelity Taxable-Sold 5.891 at $30.47  (3/20/21 Post); Item #1.B. Continued Paring FHB in my Fidelity Taxable Account- Sold 5 at $28.61 (3/13/21 Post); Item 1.A. Pared FHB in Schwab Account: Sold 40 at $29.65;  5 at $30.81 and Item #1.B. Pared 10 FHB in Fidelity Account at $29.65 and 10 at $30.02 (2/12/20 Post); Item 1.A. Pared FHB in Schwab Account: Sold 40 at $29.65;  5 at $30.81 and Item #1.B. Pared 10 FHB in Fidelity Account at $29.65 and 10 at $30.02 (2/12/20 Post)

FHB Realized Gains to Date +$424.01

F. Bought 2 CL at $75.6; 1 at $74.57 : 

Quote: Colgate-Palmolive Co. (CL) 

Closing Price 11/4/21: CL $77.29 +$0.02 +0.03% 

Website: Colgate-Palmolive – Global Household & Consumer Products

Brands 

Investment Category: Dividend Growth 

The company has two product segments: 1. pet nutrition and 2. oral, personal and home care. Our Brands | Colgate-Palmolive The pet nutrition products are sold under the Hill's brand. 

CL Analyst Estimates | MarketWatch

CL SEC Filings 

10-Q for the Q/E 9/30/21 

I view the current price to be in overvalued territory, but that has been the case for some time now. 

Dividend: Quarterly at $.45, last raised from $.44 effective for the 2021 second quarter payment. 

Dividend History | Colgate-Palmolive Company

Yield at AC of $75.09 = 2.4% rounded

I would prefer to have a starting yield above 3% given the dividend growth history which is a bit slow IMO. 

Last Ex Dividend: 10/20/21

Last Earnings Report (Q/E 9/30/21): This report was released after my purchases. 

SEC Filed Earnings Press Release 

Non-GAAP E.P.S. = $.81, up 3%

Consensus at $.795 per Fidelity 

GAAP E.P.S. = $.75, down 7%

Net Sales: Up 6.5% to $4.414B

Organic Net Sales up 4.5% 

Full Year Guidance: Confirmed at 

Broker Reports: 

Morningstar (11/1/21): 3 stars with a fair value estimate of $73, wide moat

Argus (11/2/21): Buy with a $95 target price (notes that the company has paid a dividend every year since 1895)

S & P (10/31/21): 3 stars with a 12 month PT of $85, which seems reasonable given what I know now.  

Purchase Restriction: Given the valuation and current dividend yield, each subsequent purchase will have to be at the lowest price in the chain. 

G. Bought 2 MDLZ at $58.31:  

Quote: Mondelez International Inc. Cl A  (MDLZ) 

Closing Price 11/4: MDLZ $62.09 -$0.25 -0.40% 

MDLZ Analyst Estimates | MarketWatch

MDLZ SEC Filings 

Sourced from page 3: 2020 Annual Report I would characterize MDLZ as being mostly a snack company with brands that include "Cadbury, Milka and Toblerone chocolate; Oreo, belVita and LU biscuits; Halls candy; Trident gum and Tang powdered beverages."

MDLZ Profile | Reuters

MDLZ. Key Metrics | Reuters

Mondelez International History: Everything Investors Need to Know | The Motley Fool In 2012, Kraft split into two companies: Kraft which is now part of Kraft Heinz and Mondelez. 2013 was the first year Mondelez operated as a standalone company. 

Investment Category: Dividend Growth (starting in 2013)

Dividend: Quarterly at $.35, last raised from $.315 per share effective for the 2021 4th quarter payment. 

Yield at $58.31: 2.4%

Last Ex Dividend: 

As with CL, I would prefer a starting yield over 3%. 

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release 

Diluted EPS was $0.89, up 14.1%; 

GAAP Net Income = $1.258B, up 12.4%

Adjusted EPS was $0.71, up +9.4% on a constant-currency basis

Non-GAAP Income = $1.006B, up 8.9%

Revenues: $7.182B, up 7.8%

Raised full-year 2021 organic net revenue growth outlook to approximately 4.5% 

YTD cash provided by operating activities was $2.7 billion, an increase of +$0.4 billion versus prior year;  

YTD free cash flow was $2.1 billion, an increase of +$0.4 billion

GAAP to Non-GAAP Adjustments: 

Operating margin pressured down by input cost inflation and supply chain issues, falling 30 basis points to 17.2%. 

Broker Reports: 

Morningstar (11/3/21): 3 stars with a $60 FV estimate

S & P (11/13): 3 stars with a $66 12 month PT which is 20.9 times its 2022 E.P.S. estimate. 

Argus (8/9/21): Hold. Analyst would strongly consider changing to buy at less than $50 per share. 

H. Bought 50 RSHYY at $1.10: 

Quote: RusHydro PJSC ADR 

RSHYY Analyst Estimates | MarketWatch

Company Website: RusHydro (38GW of installed generation)

RusHydro PAO Profile | Reuters (Data in Rubles)

RusHydro PAO Key Metrics | Reuters (Data in Rubles)

Russian Ruble to US Dollar Exchange Rate Chart | Xe   

Investment Category: Blackjack Hand, par of the Lottery Ticket Basket

This is a Russian company that owns hydroelectric and geothermal plants in Russia. This purchase is a test to see whether or not I can trade the stock successfully. The P/E ratio is low. 

The company does pay an annual dividend.  The last ex dividend date was on 7/8/21.  

Using Morningstar's data, the P/S ratio is about .85. RusHydro PJSC ADR (RSHYY) Valuation - PINX | Morningstar

My only prior round-trip occurred in 2014 when I sold 150 shares at $1.94 that had been bought at $1.54. Item # 1.E. Sold as an LT 150 RSHYY at $1.94 (8/24/14 post) (profit snapshot = $44.09)-Item # 1.A. Bought: 150 RSHYY at $1.536 (4/24/14 Post) 

This stock will be owned by some USD priced global clean energy ETFs that focus on energy producers. (e.g. Renewable Energy Producers ETF, weighted at 2.5% as of 11/4)

I. Bought 5 SLG at $69.82: 

Quote: SL Green Realty Corp. - An Office REIT 

Closing Price 11/4/21: SLG $72.92 -$1.39 -1.87% 

"SL Green Realty Corp., Manhattan's largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of September 30, 2021, SL Green held interests in 76 buildings totaling 35.3 million square feet. This included ownership interests in 27.2 million square feet of Manhattan buildings and 7.3 million square feet securing debt and preferred equity investments."

SLG SEC Filings 

10-Q for the Q/E 9/30/21 (summary of debt starts at page 41)

2020 Annual Report

Last Buy and Sell Discussions:  Item # 1.H. Added to SLG-Bought 2 at $45.59; 1 at $44.23; 1 at $43; 1 at $42.5; 1 at $40; 1 at $38 and 1 at $35.5 and Sold 5 at $50; 2 at $52.19 and 1 at $61.54(6/20/20 Post) I sold those lots and 2 shares held in my Vanguard taxable account earlier this year. Item # 1.N. (2/13/21 Post)(profit snapshots total = $178.41).  

Closing Price 11/4:Investment Category: Equity REIT Common and Preferred Stock Basket Strategy

Dividend: Monthly at $.3033 per share ($3.64 annually per share rounded)

Yield at $69.82: 5.21%

Last Ex Dividend: 10/28/21

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release

"Funds from operations, or FFO, of $1.78 per share for the third quarter of 2021, including $11.4 million, or $0.16 per share, of lease termination income related to the termination of the WeWork lease at 609 Fifth Avenue, as compared to $1.75 per share for the same period in 2020, which included $20.2 million, or $0.26 per share, of net proceeds derived from a legal settlement."

Increased midpoint of previous FFO per share guidance to $6.45 to $6.65 and net income per share to $7.21 to $7.41. 

Net income includes realized gains from property sales of $187.766M, which are excluded from a FFO calculation.  

"Occupancy in the Company's Manhattan same-store office portfolio was 93.1% as of September 30, 2021, inclusive of 99,764 square feet of leases signed but not yet commenced, as compared to 93.6% at the end of the previous quarter."

I have owned in the past SLG's preferred stocks, including the only one that is currently outstanding. SL Green Realty Corp. 6.5% Preferred Series I My last purchase discussion was in Item # 4.A. Restarted SLGPRI-Bought 10 at  $20.75; 10 at $19 (5/9/20 Post). I sold those shares at $25.96. Item # 3.A. (9/12/20 Post) SLG can call that preferred stock at its $25 par value plus accrued and unpaid dividends, but has not done so yet. 

I own 2 SLG Operating L.P.. SU bonds: Item # 2.C. Bought 2 S L Green Operating LP 3.25% SU Bonds Maturing on 10/15/22 at a TC of  99.579 (6/20/20 Post); Bond Detail  

J. Bought Back 5 DNNGY at $45.16: 

"Ørsted develops, constructs, and operates offshore and onshore wind farms, solar farms, energy storage facilities, and bioenergy plants, and provides energy products to its customers."

Quotes: 

USD: Oersted A/S ADR

DKK: Oersted A/S  (Denmark: OMX)

DKK to USD -Danish Krone to US Dollars

Renewable Energy Solutions to Fight Climate Change | Ørsted

Green Energy Solutions | Ørsted

The shares rose 4.15% on 10/13 in response to Biden's offshore wind energy plan. Expansion of offshore wind planned for all US coasts, Biden administration announces - CNN  

I mentioned in a 10/14/21 comment that I had bought back a 5 share lot previously sold, having decided to ignore the short term problems previously identified here: Item # 2.A. Bought 5 DNNGY at $46.2 and Sold 5 at $47.36 (6/25/21 Post) The problem involves expensive repairs to cables at 10 of its offshore wind farms. The estimated cost could be around US$500M. Ørsted Is Under Pressure. Why Now Is the Perfect Time To Buy the Green Stock. | Barron's (6/16/21). 

Last Earnings Report (Q/E 9/30/21). Interim financial report 9M 2021.pdf This report was released after my purchase. Investors had a negative reaction.  

Net Profit = DKK477M

Operating Profit = DKK2.98B, down 11% due to lower wind speeds

Revenues: DKK14.51B

The 2020 third quarter included a gain of DKK11.1B from selling Ørsted's Danish power distribution, retail customer and city light businesses: 

Q.E. 6/30/21 Report: Interim report for the first half year of 2021 - Significant US offshore capacity awarded, and several strategic partnerships established in the first half. Full-year EBITDA guidance maintained despite low wind speeds

Other recent news:

Ørsted brings in Glennmont Partners as a 50% shareholder of Borkum Riffgrund 3 Offshore Wind Farm This farm is located off Germany's coast and will have 900 MW of capacity. The acquisition price is DKK9B "which comprises the price for the acquisition of a 50 % ownership share and the commitment to fund 50 % of the payments under the EPC contract for the entire wind farm.")

Ørsted and Williams (WMB) join forces to explore clean energy opportunities in the US 

Ørsted completes Muscle Shoals solar project in Alabama (670,000 solar panels with a capacity of 647MW; article has a picture of some of them)

K. Eliminated FDVV-Sold 5+ at $37.46: 

Quote: Fidelity High Dividend ETF Overview

Sponsor's website: FDVV | ETF Snapshot - Fidelity

Expense Ratio = .29%

Profit Snapshot: +$78.91

While this fund is labeled "High Dividend", many of the top holdings have yields at less than 1%. Those would include, by way of example, the following among the top 10 holdings: Apple,  Microsoft and Wells Fargo.

Holdings as of 9/30/21-Greater than 1% weightings: 

Of those holdings, I currently own MSFT (sort of), JPM, XOM, BAC, CVX, OKE, WMB, KMI, USB, PRU, MET, STWD, NYCB, and CSCO. So there is a significant duplication.  

While I have bought and sold MSFT in my brokerage accounts, my current position was a gift of 1 share that is currently in a frame. Since I have so far been unwilling to bust the 1 share certificate out of the frame, I still own it. I received this 1 share gift before the 2 for 1 stock split in 2003. Apparently, MSFT enrolled me its Computershare dividend reinvestment program, and the 1 share received in the stock split ended up there. That position is no up to 1.8 shares. The largest dividend reinvested in that account was a special distribution of $3 per share made in 2004. At a $330 share price, my 2.8 shares is currently worth about $924. Maybe there is a lesson to be learned from that history.  

The FDVV distribution yield is about 2.62% at a $37.51 price: 

Data Intraday on 9/29/21

Last Buy Discussions: Item 4.B. Bought 5 FDVV at $29.3  (6/5/19 Post); Item # 4.A. Bought 10 FDVV at $30.2 (4/27/19 Post)

L. Added 30 AFIN at $8.21: 

Quote:  American Finance Trust, Inc. Cl A (AFIN)- a REIT

Closing Price 11/3: AFIN $8.52 -$0.08 -0.93% 

AFIN is generally classified as a net lease REIT

Management: External

AFIN SEC Filings

2020 Annual Report (risk factor summary starts at page 4 and ends at page 29)

Investment Category: Equity REIT Common and Preferred Stock Basket Strategy 

Last Discussed: Item # 4.I. Added 10 AFIN at $8.1-Fidelity Account (7/30/21 Post); Item # 2.B. Started AFIN in Vanguard Taxable-Bought 20 at $8.38; 5 at $8.16; 5 at $8 (7/23/21 Post); Item # 1.B. Bought 50 AFIN at $9; 10 at $8.3-Fidelity Taxable (7/2/21 Post)

Average Cost per share this account: $8.6 (100 shares)

Dividend: Quarterly at $.2125 per share ($.85 annually)

Yield at AC = 9.88%

The dividend yield, like the one for GNL where I recently discussed a 1,000 share purchase, screams disfavored stock among buyers who count.

Last Ex Dividend: 10/8/21 (owned all as of)

Last Report (Q/E 9/30/21): This report was released after my purchases discussed in this post. 

AFFO per share = $.30, up from $.23 in the 2020 third quarter

AFFO = $36.005M, up from $25.465M

Income included a lease termination free of $10.4M. 

"While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO. The income from this termination fee was earned and recorded during the three months ended September 30, 2021, however, we did not receive the cash payment until October 1, 2021. Therefore, the cash payment is not part of our cash flows for the period ended September 30, 2021." SEC Filed Press Release 

Dividend at $.2125

Collected 100% of cash rents. 

FFO to AFFO calculation: 

The main add backs to FFO are share based compensation, acquisition related costs, and amortization of deferred finance costs. The main subtraction relates to the straight line rent accounting convention.  

M. Bought 30 AFIN in Vanguard Taxable Account-Various Prices: 

See Item #1.M. above

Average cost this account = $8.28 

Yield at $8.28 = 10.27%

N. Added to REYN-Bought 2 at $27.18-Fidelity Taxable: 

Quote: Reynolds Consumer Products Inc. (REYN)

Closing Price 11/4/21: REYN $28.24 -$0.11 -0.39% 

REYN Analyst Estimates | MarketWatch

SEC Filings

Brands The two main brands are Reynolds Wrap and Hefty trash bags. The company has been meaningfully hurt by rising input costs. REYN's product price increases have lagged those increases.  

Last Buy Discussions:  Item # 2.O. Adeed to REYN in Schwab Taxable-Bought 4 at $27.5; 5 at $27.3 (3/6/21 Post); Item # 1.Q. Added to REYN-Bought 2 at $27.9; 2 at $27.67 (2/27/21 Post); Item # 1.J. Started REYN in Schwab Taxable Account-Bought 5 at $29.95; 5 at $28.95; 2 at $28.58 (2/20/21 Post)

Average Cost per share this account: $29.33 (30+ shares)

Snapshot Intraday 10/5 after add

Dividend: Quarterly at $.23 per share

Reynolds Consumer Products Declares Quarterly Cash Dividend 

I am reinvesting the dividend in this account. 

Yield at AC per share this account: 3.14% rounded

Next Ex dividend date: 11/15/21

Last Earnings Report (Q/E 9/30/21): This report was released after my purchase. 

SEC Filed Press Release 

Non-GAAP E.P.S. = $.33

Consensus at $.317 per Fidelity

GAAP E.P.S. = $.31 

Revenues: $905M, up 10% over 2020 third quarter

2021 Guidance: 

Last Sell Discussion: Item # 3. Sold 5 at $31.5 in Schwab Taxable (6/4/21 Post) 

O. Eliminated MTB in Fidelity Taxable-Sold 1 at $156.26; 2.627 at $160:  

Quote: M&T Bank Corp.

Closing Price 11/4: MTB $154.17 -$5.16 -3.24% 

MTB Analyst Estimates

MTB SEC Filings

Investment Category: Regional Bank Basket Strategy

Last Discussion: Item # 3.D. Added 1 MTB at $146.9 (7/9/21 Post) 

Profit Snapshot: +$42.52 (10/5 and 10/22 sales only)

Dividend: Quarterly at $1.1 per share, last raised from $1. effective for the 2019 4th quarter payment. MTB Dividend History | Nasdaq

I will keep my 4 shares owned in my Schwab account, at least until MTB completes its acquisition of PBCT, which I also own in that account. I will receive .118 MTB for each PBCT share that I own. M&T Bank Corporation Announces Agreement to Acquire People's United Financial, Inc. (PBCT)

Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release 

Highlights: 

Performance Ratios: NPL ratio is too high. 

I sold into the price surge  occurring shortly after the release of this report, viewing it as nothing special and MTB is still showing an elevated NPL Ratio.   

Disclaimer: I am not a financial advisor, but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sale of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals, and situational risks. I can only make that kind of assessment for myself and my family members.