25 September, 2019 seen 128On September 2, 2019, I sold all 30 shares of Tallinna Vesi (TVEAT) I had, getting EUR 10.85 per share, to finance the purchase of US stocks. TVEAT has been in my portfolio since 2017. As most of the Nasdaq Baltic listed companies TVEAT paid just an annual dividend. Tallinna Vesi was neither a good nor a bad investment. After holding it for about 2 years.…
On December 28, 2019, I noticed that 100 shares of NRZ I hold were called away. This comes as a little shock, as just a couple of days ago I bought an additional 53 shares of NRZ as I was looking to repair my dividend income in January 2020.
With 100 NRZ shares called away, January 2020 dividend income will drop by $42.5 (after tax), which is quite a pain. Every year I'm looking to growth YoY for about $50-$70, with this latest stock sale I will barely reach January 2019 income level.
Now, back in August 2019 I sold following covered call NRZ JAN 17 '20 16 Call @0.17
With NRZ price rising to $16.65 I got called away from these shares just a day before stock going ex-dividend. A double loss to me.
In total, my loss here is 48$ from the stock sale (my break-even was at $16.17 when writing a covered call option) + I won't get a hefty +$42.5 dividends in January. Now, the stock price most probably will drop by 50 cents after NRZ will go ex-dividend.
I could probably buy back 100 shares straight away but I won't qualify anymore for dividends, and if so my loss will be double that. Now, as painful it might be, one is for sure there won't be a miracle with January dividend and I will barely overpass (if) January 2019 dividend income, but here is what I decided to do.
As I got $1,600 capital, I will buy 2 (or 3) monthly dividend-paying stocks, right now (to get income in January) + these stocks will give a good boost to the rest of the months in a year. Right now I have several candidates like EDI, EDF, RA, CLM
Quick math here;
100 shares of NRZ would give me $170 in dividends a year
From the $1,600 I could buy 60 shares of EDF and 68 shares of EDI
- 60 EDF shares = $110.16
- 68 EDI shares = $104.61
That's some $44.77 more than by having those 100 shares of NRZ.
Also, both EDF and EDI would give to January (and every other month of the year) + $17.93. it won't save my January 2020 dividend income but will offset some loss at least + it will give some boost to the rest months of the year. For example, it was not planned to reach $200 in dividend income next February, but with additional capital, I already can see $200+. Awesome.
Now I still want to get back those NRZ shares, and for doing that I have already started selling naked puts (Currently, I have already sold one 16 strikes put for May 20, for what I got premium $75).
As the next month when I'm looking to take a dividend from NRZ is April, I will sell February 20' 16 strike naked put for some $25-$35. Depending on the NRZ price in February, if under $16 I will get assigned 100 shares or if above $16 I might buy at market price 100 or at least 47 shares of NRZ (ironically I bought 53 shares just a couple of days ago)