Dropping Oaktree Capital From The Dividend Hunter Recommendations List
Today I am removing Oaktree Capital Group LLC (NYSE:OAK) from the recommended holdings list in The Dividend Hunter portfolio. Although for the newsletter I do not make timed Buy and Sell recommendations, today’s distribution announcement by OAK shows me that Oaktree no longer fits the criteria for The Dividend Hunter recommended holdings.
First off, Oaktree Capital is a really fine company and I think the units will continue to be an attractive, longer-term total return holding. However, today’s announcement of a $0.56 per unit is lower than the previous quarterly payout and puts the OAK yield in the low 4% range. When I added OAK to the recommendations list, I expected distributions to be closer to the $1.00+ per quarter range the company was paying in 2013.
The good news is that the unit price is up on today’s earnings announcement. The unit price is also up nicely since I added OAK to the portfolio in June 2014. “Closing” out the position today will result in a greater than 14% total return for the period when OAK was a Dividend Hunter recommendation.
As I discussed in the February newsletter, selling for a nice gain like with OAK allows you to reinvest a larger amount than the initial investment into a higher yielding stock, producing a higher cash flow yield into your brokerage account.
Finally, it was great to meet new and established subscribers at the MoneyShow in Orlando last week. As I told many of you, feel free to drop me an email if you have any questions. I can be reached at [email protected].