AFL has been a decent performer, and is a modestly overvalued today. The dividend is down to 2.14%, and also hold a larger position in my taxable account. As a result, I'm closing the AFL position in favor or something more undervalued with a better yield.
Enter Smucker (SJM). JM Smucker came to attention today via Chuck Carnivale, article here:
https://seekingalpha.com/article/4105099-choosy-investors-choose-j-m-smucker-dividend-adds-value
Thoughts on the matter:
- AFL is a big position in two accounts. Closing out one makes sense, and reduces risk
- Growth prospects are better for SJM
- Yield higher for SJM
- AFL is a bit overvalued today, has a low yield, and is very stingy with dividend increases
- I recently opened a position in ORI, another insurance name, so I feel fine closing AFL in the Chump account
- SJM is a more defensive stock, and should fair well if the market tanks, or the economy slows
In short, this is an upgrade from my AFL holding here, a more defensive stock, and a better fit for my retirement portfolio given the higher yield, around 2.95% today.... Added the stock at $107, 1/2 position.
Best,
Chump
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