It has been a while..

Jun 20, 2025

Dear Readers,

Apologies for the radio silence on this blog. The last few months have been very tough on both the family and work fronts. This meant that my free time after work and family duties was very limited, and consequently, this blog had to suffer as a result.

I truly appreciate readers checking in offline and asking about my whereabouts and if everything was fine. God bless y’all! Everything is fine on the home and health front. And no, I have not given up on either this blog or my portfolio. My portfolio is chugging along, doing its thing—I just needed to put a pause on this blog for the short term.

Of course, there has been no shortage of drama on the geopolitical front ever since President Trump entered office. And while this is not a space to discuss politics, the impact of these events on our portfolios cannot be overlooked.

There is a lot to unpack since my last post, so I will first discuss how the portfolio has been faring since then.

Portfolio Updates: Feb - May 2025

While blogging activity was on pause, there were no such pauses as far as portfolio movements over the last few months. Regarding sells, I have been slowly selling some of my holdings in Apple (ticker: AAPL) and Clorox (ticker: CLX) for completely different reasons. With AAPL, I do not subscribe to Wall Street’s sentiment about AAPL being behind in the AI race compared to the other Big Tech giants. Sure, AAPL might not be touting any big breakthroughs in AI at this time, but they own a device (the iPhone) that is fundamental to the larger AI story. And while they own the entire ecosystem (hardware, software, App Store) around that device, they control the narrative of how consumers will use AI and which AI solutions ultimately gain mass adoption.

So why sell AAPL then? Mostly because, as an investment, I now have a clear indication from management that, in terms of returning value to shareholders, AAPL prioritizes share buybacks over dividends. There is nothing particularly wrong with this approach, but the important caveat is that share buybacks need to happen when the stock is trading at a bargain. Unfortunately, this is not the case with AAPL. So in such a situation, I would have expected management to give cash back to shareholders through dividends and let me, the shareholder, worry about effective deployment of that capital. With the starting yield already being so low and the five-year dividend CAGR of nearly 5%, the effective Chowder number is pretty poor.

With CLX, the story is completely different. I have been watching this company since I first initiated a position back in 2021. Since then, it has been a disappointing investment. I also have a lack of confidence in CEO Linda Rendle. This is a shame because The Clorox Company boasts some very strong brands in its portfolio. And while this consumer staple is certainly not in the league of someone like Procter & Gamble (ticker: PG), I am struggling to see a growth catalyst for this business in the long run. Hence, I think I can put this capital to better use elsewhere.

As far as new positions, I have initiated a new position in Applied Materials (ticker: AMAT). The market fluctuations surrounding tariffs gave me an opportunity to initiate this position. For a long time now, I have been studying the semiconductor manufacturing landscape and eyeing businesses like TSMC, ASML, and other players in this supply chain. ASML has been of particular interest due to essentially being a monopoly as far as EUV-based lithography machines. However, they are somewhat of a “one-trick pony” in this regard, and part of my mind always wonders, “What if some piece of technology comes around and disrupts this whole space? What would happen to ASML’s business then?” I do not have a clear answer (and I am pretty sure nobody does at this point). But as a defensive play, I like to go with another player from the same supply chain who is responsible for other aspects of semiconductor manufacturing. The AMAT business deserves a separate, dedicated post.

Regarding income generated, the portfolio generated less income than the previous year for the months of February, April, and May, and higher income for the month of March (in fact, it set a new record total for this month). The reduction in income for February, April, and May is not a surprise. During the last year, I have removed both Verizon (ticker: VZ) and Whirlpool (ticker: WHR) from my portfolio. Both of these were massive dividend payers but do not have favorable business fundamentals in the long run. I have instead replaced these with businesses that are far more stable and resilient to market fluctuations while paying decent (albeit smaller) dividend income. These portfolio moves will incur short-term pain but pay “dividends” (see what I did there ;) ) over the long run.

At the time of writing, my top five dividend payers for stocks (not ETFs) are Texas Instruments (ticker: TXN), T. Rowe Price Group (ticker: TROW), Johnson & Johnson (ticker: JNJ), Target (ticker: TGT), and Lockheed Martin (ticker: LMT). My top five as far as overall value gained over time are J.P. Morgan Chase (ticker: JPM), Costco (ticker: COST), Microsoft (ticker: MSFT), Aflac (ticker: AFL), and Visa (ticker: V).

Dividend Hikes - Year To Date

AAPL hiked its quarterly dividend by ~4% (May 2025)
Albertsons (ticker: ACI) hiked its dividend by 25% (Jan 2025)
COST hiked its dividend by 12% (Apr 2025)
CareTrust REIT (ticker: CTRE) hiked its dividend by 15.5% (Mar 2025)
Chevron (ticker: CVX) hiked its dividend ~5% (Jan 2025)
The Home Depot (ticker: HD) hiked its dividend by 2.2% (Feb 2025)
JNJ hiked its dividend by 4.8% (Apr 2025)
JPM hiked its dividend by 12% (Mar 2025)
Realty Income (ticker: O) has hiked its dividend by 1.5% (Feb 2025), 0.2% (Mar 2025), and another 0.2% (Jun 2025)
PepsiCo (ticker: PEP) hiked its dividend by 5% (May 2025, announced in Feb)
PG hiked its dividend by 5% (Apr 2025)
The Southern Company (ticker: SO) hiked its dividend by 2.8% (Apr 2025)
TGT hiked its dividend by 1.8% (Jun 2025)
TROW hiked its dividend by 2.4% (Feb 2025)
UnitedHealth Group (ticker: UNH) hiked its dividend by 5.2% (Jun 2025)
Waste Management (ticker: WM) hiked its dividend by 10% (Feb 2025)

Looking at the list above, there is a good, even mix of high double-digit hikes, some mid-single-digit hikes along expected lines, and some low single-digit hikes that are very disappointing.

The dividend hike metric is crucial to me for several reasons: at the end of the day, this represents the value on the dividend check that will show up in my account. But aside from that, it is an indication from management about the confidence they have in their own business. Also, if there is a hike without the business fundamentals to support it, that again paints a picture of management that is probably not acting in the best interest of the shareholders they serve.

Let’s Talk About UNH

I cannot end this post without bringing up the topic of UnitedHealth Group (ticker: UNH). Between April 2025 and today (June 20th, 2025), the stock has dropped by nearly 50% in value! Ouch!! What has been unfortunate is that this company has had a difficult time as far as being in the news for the wrong reasons: starting with their now-former CEO being shot dead outside a hotel late last year, to the new CEO stepping down a few months later, to allegations of fraud, and through disappointing results in the most recent quarter. It has been a challenge to hold this stock in the midst of all these negative news articles.

In such situations, one needs to zoom out and look at the situation as objectively as possible. Before this drop, UNH was the 19th largest company in the world by market cap. It still is the largest US health insurer and the largest US employer of doctors. I do not have the source to back this up, but as per what I read from an industry analyst, more than 5% of the US GDP flows through this company each day! If you look at the company’s performance over the last decade or so, the numbers are simply jaw-dropping. During this time, it has also been a very solid dividend payer, boasting a Chowder number well over 13-14.

So does this mean this situation is a temporary blip in an otherwise solid business and now represents a good buying opportunity? To be honest, I do not know the answer. In my case, this is a hold and “watch how the story unfolds” situation. Clearly, there is some turmoil as far as the leadership in this company, and we need to see how a new CEO can guide this ship out of troubled waters and get it back on the path to growth. Obviously, the news related to fraud is concerning. But then again, almost every company in this world has gone through such allegations of fraud, anti-trust, or questionable business practices at one point or another in its lifetime. As the saying goes, “there are no saints here!” :)

Summary

That puts a wrap on this post. It has taken a long time to come about. I can make no promises about what the future holds as far as post frequency, but please know that I enjoy writing about my financial journey and I am as passionate as ever about sharing my learnings with the rest of this community.

Thank you once again for your readership!

LWD