Fixed Income 2: Finding Attractive Income Opportunities in a Yieldless World

A monthly performance review of Durig’s high yielding Fixed Income 2 (FX2) Managed Income Portfolio which also explores the many benefits that the portfolio can provide to investors.

(performance is reported net of fee, as of 2-20-20)

Performance Highlights

  • Over 6% in Cash Generation Alone
  • Year-to-Date Return of 6.20%
  • Trailing 1 Year Return of 7.72%
  • Trailing 3 Year Return of 9.03%
  • Trailing 5 Year Return of 9.13%
  • Annualized Return Since Inception of 8.72%
  • Average Bond Maturity of 4 Years
  • Alpha of 10.58 (vs. Benchmark)*
  • Beta of -1.22 (vs. Benchmark)*
  • Excess Return of 4.32% (vs. Benchmark)*

Dogs of the Dow: Blue Chip Dividends with 4% Income

This review looks at the performance of the Dogs of the Dow Portfolio which produces over 4% in dividend income alone, and also examines the benefits the portfolio can provide to income investors.

Performance Highlights

(all performance is reported net of fee, as of 2-10-20)
  • Annualized Return Since Inception of 12.32%
  • Average Dividend Yield of 4.03%
  • Alpha of 1.89 (vs. Benchmark*)
  • Beta of 0.77 (vs. Benchmark*)

Designed for the Long Term

The Dogs of the Dow Portfolio was designed to produce high levels of dividend income over time with less volatility than the stock market.  With an average dividend yield of over 4% alone and a lifetime return of over 12%, the Dogs of the Dow’s effectiveness over the years lies in both its repeatability and scalability.

Though the stocks in Durig’s Dogs of the Dow Portfolio more than likely will change from year to year, the underlying screens used to select them remain the same.

Durig searches for and selects a group of of the highest yielding dividend stocks from the Dow Jones Industrial Average (DJIA) which have fallen out of favor (aka the “dogs”) and holds them for one year. Over time, these “dogs” tend to have “more room to run” with respect to their share price.

Time in the market nearly always beats timing the market.

Durig’s Dogs of the Dow is a simple, yet effective strategy that was specifically designed to earn you more income by capturing the dividends of some of the highest yielding blue chip stocks of the Dow Jones. Over time, reinvested dividends can help to boost total return and potentially grow the dividend income the portfolio produces.

Why Blue Chip Dividend Stocks?

Historically, blue chip dividend stocks have shown themselves to be resilient under downward market pressure, and are thought to offer relative stability in hectic markets as compared to non-dividend paying stocks. Additionally, companies that pay dividends tend to have much stronger fundamentals, such as stable earnings and growth, effective management and stronger financials.

The dividends paid by blue chips can also help to diversify income streams, and because dividends (and earnings) tend to grow over time they typically outpace inflation, preserving the value of your hard earned dollars.  These dividends can also help to lessen historical volatility, explained in a recent article:

“During the overall market downturn in 2002, when non dividend-paying stocks fell by an average of 30%, while dividend-paying stocks only declined on average by 10%. Even during the severe 2008 financial crisis that precipitated a sharp fall in stock prices, dividend stocks held up noticeably better than non dividend stocks.”

Less historical volatility equates to a smoother and more comfortable ride for investors.

Durig’s Dogs of the Dow Portfolio can be extremely efficient in a tax advantaged account (such as an IRA) since neither capital gains nor dividends are taxed, allowing your investment to grow tax-free.

Avoid the Crowd

The majority of blue chip investors find themselves in an overly crowded mutual fund structure.  While it may seem nice to share gains and losses but in actuality pooled investments are far more muddled, and typically more costly due to high administrative costs, hidden fees, and can create unwanted tax inefficiencies.

Avoid the crowd with a low cost, individually managed Dogs of the Dow account that offers a much cleaner investment environment.

Start building a better retirement today with the Dogs of the Dow.

Sign Up Below to Receive Updates on the Dogs of the Dow, and Many Other Related Investments!

Summary

The Dogs of the Dow Portfolio has continued to generate strong levels of dividend income over time with less historical volatility, and with over over 4% in dividend income, investors can sleep easier at night.

For those that wish for more income and less volatility with the potential to grow income over time, Durig’s Dogs of the Dow Portfolio is an excellent, low cost solution with professional management and support dedicated to helping you achieve your income goals.

Learn More

If you have any questions or would like further information Durig’s Dogs of the Dow Portfolio Strategy, please call Durig at (971) 327-8847, or email us at info@durig.com.

Durig Capital has several high yield portfolios available, click below to learn more.

Fixed Income 2 – FX2
Dividend Aristocrats
Income Aristocrats
Dogs of The Dow
Dogs of The S&P 500
Dogs of Europe
European Dividend Aristocrats

Risk Disclaimer: Any content on this review should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades investments to make. Invest with only with risk capital; that is, with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations. Past results are no indication of future performance. In no event should the content of this correspondence be construed as an express or implied promise or guarantee.

Durig Capital is not responsible for any losses incurred as a result of this article Information provided in this correspondence is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Disclosure:  The primary benchmark* used was SPDR® Dow Jones Industrial Avrg ETF Tr.

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The European Dividend Aristocrats: A Global Income Solution

Announcing Durig’s latest addition to its portfolio of income solutions, the European Dividend Aristocrats Portfolio. This one of a kind portfolio targets 20 high yielding blue-chip stocks* (the actual securities held in the portfolio are American Depository Receipts and trade just like stocks) listed on various European exchanges for investment and was designed to produce high levels of dividend income and even the potential for growth of income over time. The idea is to invest only in the stocks of companies with a current high dividend and a long history of continuous annual dividend increases. Focusing investment on companies that increase their dividends annually should position the portfolio to consistently capture to the “cream of the crop” of higher dividend companies of a variety of  European exchanges.

Dogs of Europe: A One of a Kind Income Solution

We are thrilled to introduce the latest addition to Durig’s portfolio of investment solutions, the Dogs of Europe.  Designed to capture the high quality dividends of European Blue Chips with the potential to grow income over time, this new portfolio strategy allows investors to participate in European equity trends with the help and support of a registered investment advisor in the United States.

Community Health Systems Bonds (CYH), 17% YTM providing High Yield, with Short Maturities

This week, Durig reviews one of the largest publicly traded hospital companies in the United States. Community Health Systems (NYSE:CYH) has spent the past few years paring down its portfolio of hospitals with an eye to retain those locations that are most profitable. The results of these divestitures are starting to be seen and the company has now put up two consecutive quarters of positive growth. In its most recent quarter results, one can see that same-store metrics tell a compelling story, especially in the competitive healthcare sector (see bullets above).

Income Aristocrats: Higher Income, Less Sleepless Nights

Following the success of it’s Dogs of the Dow and Dogs of the S&P 500 Portfolios, we now take an in-depth look at the latest addition to our portfolio of investment solutions, the Income Aristocrats Portfolio. A remarkably well diversified portfolio, the income aristocrats effortlessly blends three different portfolio strategies (Fixed Income 2, Dogs of the S&P 500, and the Dividend Aristocrats) into an excellent vehicle for generating cash flow.

Dogs of the Dow Do it Again

This review explores the performance of the Dogs of the Dow Portfolio, with nearly 4% in dividend income alone, and considers the many merits of blue chip dividend stocks such as those held in the portfolio.

Performance Highlights

  • Year-to-Date Return of 13.03%
  • Trailing 1 Year Return of 10.31%
  • Annualized Return Since Inception of 14.03%
  • Average Dividend Yield of 3.98%
  • Alpha of 4.47 (vs. Benchmark*)
  • Beta of 0.75 (vs. Benchmark*)

Dividend Aristocrats: Income Growth Over Time + Historical Outperformance

In this review, Durig examines the ways in which holding a diverse portfolio of dividend paying, high quality blue chip stocks can help to provide investors some much needed stability.

Performance Highlights

(all performance is reported net of fee, as of 11-15-19)
  • Lifetime Return of 14.06%
  • Average Dividend Yield of 3.34%

Quality Investments That Deliver

As trade tensions between the US and China continue to plague financial markets, investors are looking for high quality investments that can still deliver.

Durig has found the solution; blue chip dividend stocks.

Dogs of the S&P 500 Outperform Peers Across the Board

Durig benchmarks the performance of its Dogs of the S&P 500 Portfolio and explores how holding a diverse portfolio of blue chip dividend stocks can benefit investors in today’s markets.

Performance Highlights

  • Year-to-Date Return of 32.02%
  • Trailing 1 Year Return of 26.07%
  • Annualized Lifetime Return of 14.29%
  • Alpha of 4.52 (vs Benchmark*)
  • Beta of 0.73 (vs Benchmark*)
  • Average Dividend Yield of 4.29%

Income and Growth Strategies That Are Working in Today’s Market

In this special review, Durig benchmarks the performance of its three unique blue chip equity portfolios, the Dogs of the Dow, Dogs of the S&P 500, and the Dividend Aristocrats, all of which are designed to capture high quality blue chip dividends of some of the most reputable companies on wall street.

With interest rates continuing to fall and attractive yields becoming increasingly difficult to find, many investors are turning away from conventional fixed income investments such as US Treasuries.

Dividend Aristocrats: Income Stability and Growth Over Time

A review and performance recap of Durig’s highly successful Dividend Aristocrats Portfolio that also compares the portfolio to another aristocratic dividend portfolio. The Dividend Aristocrats Portfolio was also designed with income stability in mind, maintaining investment focus on only higher quality blue chip companies known as “Aristocrats.”

(all performance reported net of fee, as of 10-18-19)

October Performance Highlights

  • Average Dividend Yield of 3.51%
  • Lifetime return of 9.44%
  • Excess Return of 3.27% (vs. benchmark)*
  • Alpha of 7.95 (vs. benchmark*)
  • Beta of 0.18 (vs. benchmark*)

Dogs of the S&P 500: Over 4.5% Income with Strong Historical Performance

A benchmark performance review of Durig’s unique Dogs of the S&P 500 Portfolio that examines the income benefit the portfolio can provide, also exploring some of the achievements the portfolio has had in lifetime performance.

October Performance Highlights

  • Average Current Dividend Yield of 4.68%
  • Year-to-Date Return of 20.38%
  • Trailing 1 Year Return of 17.63%
  • Annualized Lifetime Return of 10.41%
  • Alpha of 1.69 (vs Benchmark*)
  • Beta of 0.72 (vs Benchmark*)

Chesapeake Energy Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 9.5% YTM

This week, Durig looks at an energy company that is making the transition from its historical focus on natural gas to be more focused on oil production. Chesapeake Energy (NYSE:CHK) has been making strides this year to transition towards a more oil focused production portfolio. Chesapeake has already increased oil in its production portfolio from 17% in 2018, to 24% as of the end of the second quarter.  The company estimates it will exit 2019 with oil representing 26% of its production. Oil is a higher margin product, so Chesapeake is already seeing the fruit of its decision (see bullet points above).

Dogs of the Dow: Find Blue Chip Peace of Mind with Over 4% Income

A monthly performance review of Durig’s Dogs of the Dow Portfolio that explores several benefits that income producing investments such the Dogs of the Dow can help to provide.

Performance Highlights

  • Lifetime Return of 12.87% (annualized)
  • Year-to-Date Return of 8.30%
  • Alpha of 4.89 (vs benchmark)*
  • Beta of 0.77 (vs benchmark)*
  • Average Current Yield of 4.18%

Dividend Aristocrats – A Path to Growing Your Income

A monthly performance review of the Dividend Aristocrats, a diversified blue chip stock portfolio built around some of the highest yielding dividend payers listed on the S&P 500. We also examine the various benefits the strategy can offer investors in volatile markets.

 

(performance is net of fee, 9-17-19)


Performance Highlights

 

  • Annualized Return Since Inception of 8.03%

  • Average Current Yield of 3.52%

California Resources Corporation Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 33.5% YTM

This week, Durig Capital takes a look at a unique oil and gas producer. Reviewed several times in the past, most recently in May of 2019 following the company’s release of their Q1 Results, California Resources Corporation (NYSE:CRC) produces oil, natural gas and natural gas liquids (NGL) strictly within the state of California. And, it sells all of it oil production in the state of California, which, as a state, represents the 5th largest economy in the world. The company recently signed its third major joint venture agreement, which will allow the company to add production and revenue with no initial capital cost to CRC. In addition to this great news, CRC also posted some excellent results from its second quarter (see bullet points above).

Dogs of the S&P 500: Dividend Yield of 4.66% with Strong Historical Growth

This week, Durig takes a closer look at the various benefits that its Dogs of the S&P 500 Portfolio may provide investors in light of today’s unpredictable financial markets. September Performance Highlights (See bullet points above).

A Multi-Benefit Income Strategy

Durig’s Dogs of the S&P 500 Portfolio has the dual benefit of growth and income from a variety of the highest yielding (with regard to dividends) blue chip companies listed on the S&P 500.  The portfolio is able to capture the highest quality blue chip dividends through its use of strategic weighting, achieving  an average dividend yield of 4.66%, with the growth component of this strategy helping to boost the total year-to-date portfolio return to 20.78%, and a trailing 1 year return of 13.77%, outpacing the S&P 500 itself in both year-to-date return and trailing 1 year return.  This multi benefit strategy allows investors to capture strong growth in principal, while still generating a healthy level of diversified income and realizing strong historical returns.

Tenneco Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 7.85% YTM

This week, Durig Capital takes a look at an industrial designer, manufacturer and marketer of aftermarket parts for light vehicles, commercial trucks and other industrial uses.  Tenneco (NYSE:TEN) is on track and getting ready to create two market leading companies after its landmark acquisition of Federal-Mogul late last year. Its second quarter results tell the story of a company working diligently to grow its business, even among some industry slowdowns (see above).

Tenneco’s 2024 bonds have a yield-to-maturity of just about 7.85%. This is a fantastic yield, especially when investors can’t even get 2% from the current 30-year U.S. Treasury bond. In light of this and the company’s solid Q2 performance, these bonds are ideal for additional weighting in Durig Capital’s Fixed Income 2 (FX2) High Yield Managed Income Portfolio, the aggregated performance of which is shown below.

Want More Income? Find It in Short Term Bond Portfolio

Do you want more income? If your answer is yes, we have excellent news for you! Durig’s FX2 Portfolio has a lifetime track record of historical outperformance of its peer benchmarks while generating extremely high levels of fully customizable income options, something that no mutual fund can offer, all within your own separately managed account.

(Above: FX2 Benchmark Performance, 8-27-19)

CSI Compressco Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 10.25% YTM

This week, Durig Capital takes a look at a company that provides compression services and equipment for the oil and gas industry. With the demand increasing for takeaway capacity from oil and gas fields around the country, CSI Compressco’s services become even more valuable and essential. The company had a fantastic second quarter, with record setting utilization, increased revenues and adjusted EBITDA.

 

  • Second quarter overall utilization came in at a record setting 89.1%.

  • Revenues increased by 36% over second quarter 2018.

  • Adjusted EBITDA increased 22% over first quarter and 41% year-over-year.

  • Outstanding interest coverage of 2.2x.

 

Dividend Aristocrats – Grow Income Over Time

The Dividend Aristocrats Portfolio, Durig Capital’s newest exciting investment solution is now open for investment.  This portfolio strategy targets the “cream of the crop” among a diversity of blue-chip companies listed on the S&P 500, seeking the companies with only the highest yields and have a stable history of increasing dividends.

Income Growth Over Time

Community Health Systems Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 23% YTM

This week, Durig Capital looks at the healthcare sector to review one of the largest publicly traded hospital companies in the United States. Community Health Systems (NYSE:CYH) has spent the last few years rationalizing its portfolio of hospitals. The company is beginning to realize the effects of this strategy as evidenced by its same-store results for the second quarter (see above).

AK Steel Bonds, Short Term, High Yield, Fixed Income Investment, Yielding 10.0% YTM

This week, Durig Capital reviews one of the leading producers of steel products in the United States. AK Steel (NYSE:AKS) produces steel for the automotive, infrastructure and manufacturing sectors. There has been much talk of bringing back manufacturing jobs to the U.S., especially in the production and manufacturing of steel. AK Steel is one of the companies trying to ensure continued heavy manufacturing capabilities within the United States. It recently reported its second quarter results (for the three months ending June 30, 2019) with the highlights (listed above).

Pay Day

Pay Day is a specified day of the week or month when one is paid usually workers collecting wages from their employers. In America it is usually the first of the month.  In Israel the tenth day of the month.

It is a commandment in Deuteronomy 24:14-16, Don’t delay to pay your employed worker the poor and destitute of your brothers or from the strangers immigrants in your land. On the same day you should pay them even not to wait one more day which will be for you a sin.”