The Current Top Ten
If you have been watching the market during 2022 you might be a bit frazzled or some of you might even be worried. Bear markets can be disconcerting unless you remember the long-term matters far more than the short-term. Most bear markets are relatively short-lived. Bull markets, where the market is going up, are generally more robust and usually result in great results and returns.
As a seasoned investor, I am very aware of our top ten holdings. They are: VYM, AVGO, PFE, STX, MAIN, F, HPQ, ARCC, O, and ABBV. VYM clearly is the largest holding and is a great dividend growth ETF. I buy more shares every time the price dives. The technology investments in the top ten include AVGO, STX, and HPQ. Health care investments in the top ten are PFE and ABBV. O is a REIT (real estate investment trust), MAIN is a BDC (business development company), F is Ford, and ARCC is a financial company. However, these have not all performed equally well. For example, STX had a very rough Friday!
An Example: Seagate Technologies was number Four!
I say “was” because Seagate is now number five in our top ten. It was number four on Thursday and dropped to number five on Friday.
If you, like me, have shares of STX, you might be stressed out. STX (Seagate Technology Holdings) dropped 8.1% on Friday due to demand headwinds for Seagate products and some downgrades due to weak Q4 results. Did I sell our 1,600 shares?
Absolutely not. The reason is simple: Seagate is a long-term investment. I don’t have to sell it. In fact, Seagate Technology (NASDAQ:STX) declared a $0.70/share quarterly dividend, in line with previous dividend on July 21, 2022. It offers a forward yield of 3.61% and it is payable Oct. 5; for shareholders of record Sept. 21 with an ex-div date of Sept. 20. So, if I have my 1,600 shares of STX on September 20, I will receive a dividend payment of $1,120 on October 5. That will buy a lot of groceries.
Are the STX Dividends at Risk?
The dividend payout ratio for STX is 33.95%. This is well below the 50% mark for this type of investment. However, even if the dividend was completely eliminated due to profit problems in the future, STX’s contributions to our total annual dividends is only .79% of the total estimated dividends for 2022. So the risk to the investment is low and the risk to overall income is also negligible.
If you want to see a similar post regarding our holdings, see the blog post for June 22, 2022. It was called “Wayne and Cindie 2022 Investment Portfolio UPDATE.” That post also has a link to some files that showed our holdings in June 2022. However, I have sold some positions since then. For example, we no longer have shares of Microsoft (MSFT) and I have added in some new investments since then.