2021 More Income by Doing Nothing

First Two Weeks of January

January’s MTD results have been good. I have made some great profits on selling covered calls, by doing some swing trades, and by collecting increasing dividends. Already in January, four of our stocks have announced dividend increases. The four ticker symbols are: ADC, LAND, SAR, and STAG. Of the four, the most meaningful one was ADC. Therefore, a quick review of ADC is in order.

My regular readers know that I don’t chase growth stocks. I avoid what I consider highly speculative investments like Tesla (TSLA). Using my model, I sacrifice the potential for some significant portfolio growth. However, I don’t think that TSLA’s current valuation warrants the current price of the stock. Of course, like so many other things, I could be terribly wrong about TSLA. But I am not wrong about what I have been able to accomplish thus far in 2021. For one thing, I have had some great results from selling covered calls. My intention is to provide a covered call update and discuss my swing trading results at least monthly. My purpose is to encourage interested investors to consider multiple ways to earn income and collect profits.

ADC’s DIVIDEND INCREASE

ADC announced a dividend increase of 6.2% from prior dividend of $0.195. This gives ADC a forward yield 3.98%. The dividend is payable Feb. 12 for shareholders of record Jan 29 and goes Ex-Dividend Jan 28.

The Business and Quality of ADC

The following Seeking Alpha screen shots reveal some important characteristics of ADC as an investment. First of all, ADC has an eight-year history of increasing dividends. Not too long ago the dividend was decreased. Always be mindful of that possibility with any investment. The business model is solid with a focus on real estate that I believe is a good long-term model for continued growth. The dividend payout ratio and dividend growth rate are both good. Therefore, I will continue to collect the dividends and enjoy the dividend growth. If you are a growth investor, then ADC is not for you. But if you want income from your investments, then good REITs can make a difference in your income stream. Here are five slides with data elements I look at when buying an investment.

The Properties of ADC

Do you recognize the names of the retail businesses that lease their buildings from ADC? I think you will. My guess is that you shop in at least some of them: Aldi, Home Depot, McDonald’s, TJMaxx, Walmart, Costco, Michael’s, Old Navy, Pick n Save, Hobby Lobby, Home Goods, Motomart, and O’Reilly Auto Parts are just the tip of their retail iceberg. I shop at Aldi, Home Depot, Walmart, McDonald’s, and Hobby Lobby. They are busy and profitable businesses, even during Covid-19.