Dividends Premium: September 2025

Doom or boom, this income portfolio is ready to pile on more gains.

Editor’s Note: Welcome to the September Dividends Premium!

It was another great month for the portfolio, led by my recommendations with the most leverage to rising inflation. The average holding is now up 23.46 percent year to date. And I expect more gains ahead.

Have a question? Then please join my Dividends Roundtable, which I host 24-7 on the Discord application.

Thanks for reading and here’s to your wealth!--RC

Doom or Boom We’re Ready

The dog days of August were surprisingly good to most of our portfolio stocks. Adding in dividends paid, the average year to date return for my recommendations is now 23.46 percent. That’s a nearly 5 percentage point gain from a month ago.

Our average return is 12 percentage points ahead of the S&P 500, which has recently enjoyed an upward burst from the Big 8 Tech stocks. And our stocks have outperformed the iShares Dividend ETF (DVY), used as a benchmark for dividend equity portfolios, by more than 14 percentage points.

The portfolio is also achieving its objective for current income. The weighted yield is 4.9 percent, 3.8 percentage points ahead of the S&P 500 and 1.3 points greater than the DVY. And despite a notable dividend reduction at natural gas royalty company Blackstone Minerals (NYSE: BSM), distributions will grow this year, with 14 holdings raising dividends at least once.

Since inception, our model income and growth portfolio is ahead by 74.82 percent. That’s the increase in principal plus accumulated dividends. And it’s based on the assumption investors have harvested cash from distributions, rather than reinvested to produce a significantly higher return.

That’s solid overall portfolio performance, both in absolute terms and relative to alternative investments.

Winners and Losers

Not every stock has been a winner. Global refiner and chemicals company LyondellBasell (NYSE: LYB) raised an already double-digit percentage dividend by 2.2 percent this year. But the stock is down -21.8 percent year to date, even after a big bounce from last month’s low point.

Black Stone is understandably also off by a double-digit percentage after cutting its payout -20 percent. Like most residential REITs, Mid-America Apartment Communities (NYSE: MAA) is also slightly underwater, despite a 3.1 percent dividend boost.

Though I’ve exited the position, Kraft Heinz (NYSE: KHC) is also down close to a double-digit percentage. Since the August portfolio update, the company has announced its anticipated plan to split into two companies. And at least so far, investors have been less than excited about the details released.

That includes Kraft’s biggest shareholder Warren Buffett and Berkshire Hathaway (NYSE: BRK/B), which wrote down the value of its KHC by $8.4 billion last month. And it’s hard to blame Buffett: Though the grocery arm spinoff will be tax-free to investors, it will cost the combined company an estimated $300 million in “dis-synergies.”

There’s also been no clarification of what dividends the two halves of the company will pay after the split, which has been targeted for “the second half of 2026.” That doesn’t necessarily mean the payout will be cut. But Kraft’s revenue and margins are under pressure from inflation and supply chain disruption. And given management’s stated objective of keeping investment grade ratings, a big “re-set” should be considered a major risk.

Kraft shares are at this point only a couple of dollars below where I exited the position last month. My view is the stock still rates a sell. We can reassess once details of the split come into better focus.

As for Black Stone, LyondellBassell and Mid-American, all three should be on higher ground a year from now. Black Stone’s cash flow and distribution are closely linked to natural gas prices. The commodity slipped under $3 per million BTU during a relatively mild summer. But the price now appears to be benefitting from rising demand and tightening supplies.

The main variable for a dividend restoration is when third parties start to ramp up activity on Black Stone’s lands. The “farmout” agreement with privately held Ellipsis announced last month is extremely promising. But we’re likely going to have to be patient.

LyondellBassell’s earnings are also heavily exposed to cyclical pressures, mainly demand for its end-use chemicals and feedstock pricing spreads. Both have negatively impacted results this year. But management noted some improvement during the Q2 earnings call, even as strategic cost cutting maintained high levels of free cash flow to support the dividend.

Mid-America’s near-term growth has stalled under the weight of massive new supply hitting its core Sunbelt markets. But dividends and investment plans remain well supported, even as signs of tightening increase.

Bottom line: The cyclical factors dragging these three stocks down are now swinging in their favor. And as they do, stocks will recover, very likely becoming portfolio leaders in the next 12 to 18 months.

On the other side are 14 positions currently with double-digit year-to-date gains led by Newmont Mining (NYSE: NEM), which has more than doubled. And despite a great deal of volatility related to politics, we also have a gain of more than 60 percent in CVS Inc (NYSE: CVS).