The Dividend Hunter

November 2021 Vol. 8 Issue 6

The Dividend Hunter Strategy and Selling EnLink LLC

Managing Editor's Note: This past month Tim issued a rare sell alert and this month he's replacing it with

a truly interesting income stock opportunity. The portfolio doesn't churn much as the Dividend Hunter is about buying and holding steady dividend payers, not chasing meme stocks "guaranteed to moon." That's not to say the portfolio never changes, but adding and selling stocks from it is done only with careful deliberation and with a purpose. That's how Dividend Hunters invest.

On October 20th, I sent out a note recommending that we Dividend Hunters sell our shares of EnLink LLC (ENLC). I expected to see my inbox fill up, but I received very few subscriber notes about my recommendation.

The notes I did receive were very well thought out, with the reasons why the individual investors questioned my recommendation in the light of their EnLink investments.

In This Issue

One Main Financial .............................. 5 Covered Call Strategy .......................... 8 Energy Midstream, MLPs, & AMZA ...10 Portfolio Update................................18 Current Portfolio ...............................19 Preferred Stocks Tickers ........................21

The EnLink share price plummeted during the pandemic-triggered a stock market sell-off: in March 2020, the shares traded below $1.00 for a short time (despite a $0.375 annual dividend). They stayed below $3.00 through the spring, summer, and well into fall 2020.

Dividend Hunter subscribers who bought EnLink in mid-2020 now sit on gains of 200%, 300%, even 500%. This quote is from an email from one Dividend Hunter subscriber, Howard:

I just continue to marvel at how my stock purchases that you recommended during the depths of the COVID crash look now. I put quite a bit of resources into ENLC and PRT that are now making me feel like a genius; but in reality,

1

November 2021 Vol. 8 Issue 6

your advice gave me the confidence to do it. A lot of those blocks of stock are up almost 5x now. Now, that's real wealth creation!

This note reinforces my belief that the Dividend Hunter strategy lets us grow our income in any phase of the stock market; following the strategy through market "crashes" lets us build our wealth.

I thought a lot about our EnLink investment as I drove home, towing my new travel trailer. (FYI, it's a small trailer but very nicely equipped. The model is a Rockwood Mini Lite 2205S if you want to check it out.) It was challenging to decide whether to make this recommendation. On the side of keeping EnLink on the Dividend Hunter recommendations list is that EnLink is a very well-run company with tremendous free cash flow. Also, in the current market, the energy sector is very hot.

I strongly considered recommending a partial sale of your EnLink shares, but I don't run Dividend Hunter that way. I want all the investments on the recommendations list to be okay to buy and accumulate for any subscriber, including those investors new to the Dividend Hunter and my philosophy about investing to build income.

I based my final decision on the fact that at its current share price and dividend rate, EnLink shares yield 4.5%. With no visibility on dividend growth, a yield that low points towards selling EnLink and putting the money to work at a higher yield to produce more cash income.

If I stick to the primary Dividend Hunter goal of investing to generate a high-yield cash income, the decision to sell EnLink becomes almost automatic. Yes, the gains made by many after purchasing ENLINK in 2020 are nice and certainly to be celebrated but in the end, this is a newsletter about creating a sustainable and meaningful income stream.

For example, if you sold $10,000 worth of EnLink and invested that money in the InfraCap MLP ETF (AMZA), you would immediately double your income (4.4% yield to 8.9%).

I am often asked what would make me recommend selling one of the Dividend Hunter investments. EnLink provides a good example. Many of us have made tremendous capital gains in the stock, and the current low yield provides the trigger

2

November 2021 Vol. 8 Issue 6

to sell, lock in those gains, and put the capital to work to earn more income because after, income is what being a Dividend Hunter is all about. The good news is that our new stock, OneMain Holdings (OMF)--which you'll read about later in this issue--makes an excellent replacement for EnLink. Read my thoughts on the stock and start building a position in your portfolio. A few notes before you dig in to this month's new stock: 1. If you want to send me questions use this form. I collect all questions during

the week and answer them in the Weekly Mailbag video that comes out every Friday evening. Please don't include personal information like account numbers and passwords though. 2. Sign up for mobile text alerts. We're building services to alert you when monthly issues come out, account status updates, renewal notices, and more. Click here. 3. If you joined us at the Dividend Hunter recently then be sure to visit our new member area. You'll get the five steps you need to take to get the most from your subscription. Just log on to the website and click the "New Members Start Here" link under the Dividend Hunter heading. 4. And... join me for the new member orientation on Tuesday, November 9th at 8:00 p.m. eastern. Click here to sign up. 5. In the December issue (can you believe we're already looking at December?) I'll share with you my outlook for 2022 ? not a predictions issue, just what I'm watching in the economy, the market, and with individual stocks and suggest you should too. These are the events, trends, and changes that may affect our portfolio and strategy.

3

November 2021 Vol. 8 Issue 6

We've added a ton of new features to your Dividend Hunter subscription just in the past year or so... We added the Weekly Mailbag... The New Member Orientation (that's open to everyone and the next one is coming soon)... We held emergency briefings during the spring 2020 crashes... We changed up our Startup portfolio... My goal is to make The Dividend Hunter the most trusted, comprehensive, and most valuable dividend newsletter on the market. It's affordable and easy to use. Well, I have one more special feature to release to you. One that could save you a lot of money in the years ahead as you and I work closer together. Click here to view this special update and how to get it.

4

OneMain Financial

I have been interested for a while in digging into OneMain Holdings (OMF). After several Dividend Hunter Insider subscribers requested I look into OneMain for my monthly Deep Dive Stock report, I took the hint and checked out the company.

As a result of that research I'm adding OneMain to the Dividend Hunter recommendations list.

(Click here if you want more about how you can start getting the monthly Deep Dive Stock too.)

November 2021 Vol. 8 Issue 6

Business Overview OneMain Holdings is a financial company that provides loans and insurance products to "near prime" customers. Products are sold through 1,400 branch offices in 44 states and online channels. OneMain holds a greater than 20% market share of the near-prime lending sector. This graphic shows the types of products sold by OneMain. Note the average APRs. NCO stands for net charge-off.

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download