Dividend Hunter — September 2026 Newsletter

Summary

September 2026 DH issue covers the PAGP removal / MRP addition rationale, full Millrose Properties deep dive, a Preferred Stock Primer, new MSC Income Fund (MSIF) BDC, and portfolio updates including FSCO dividend increase and ADAM dividend hike.

Details

Why I Sell Some Stocks and Add Others

Tim explains the PAGP removal: share price up 160% over 5 years, 40% in the last year alone, pushing yield below 6.5%. DH strategy focuses on higher-yielding investments — PAGP's price appreciation made it less effective for income generation. MRP added as replacement with 10.2% yield.

PAGP capital gains note: Up 120% since 2022 addition. PAGP distributions treated as "return of capital" until positive earnings & profits (estimated ~2029). Subscribers in taxable accounts may want to hold for tax reasons.

Account performance: July tech selloff (20-40% drops) had no negative impact — DH account continued gaining. Q3 gains exceeding any quarterly gains from the last 2.5 years.

Millrose Properties (MRP)

See [Millrose Properties (MRP) — Deep Dive]. Spun off from Lennar (LEN) February 7, 2025. Homesite acquisition/development REIT — develops sites and receives option payments from builders. $8.706B invested capital, 69% under Lennar Master Program. Q2 2026: $195.4M revenue, $0.77/share AFFO, 100% payout. Trading at $30.14 (15% NAV discount), 10%+ yield.

Editor's position: Long MRP.

Preferred Stock Primer

Comprehensive overview of preferred stock features: - Price & Yield: Issued at $25.00 par with set coupon rate (e.g., RITM.PD at 7.0%) - Callable: Issuer can redeem at par after call-protection date - Fixed-to-Floating: Converts from fixed to SOFR+spread after set date - Cumulative: Missed dividends must be made up before common dividends resume - Convertible: Can be exchanged for common stock at owner's discretion

Safety: Preferred dividends take priority over common. Cannot be reduced/suspended if common dividends are paid. DH portfolio now includes only PFFA (preferred stock ETF) — individual preferreds have been removed.

MSC Income Fund (MSIF)

See MSC Income Fund (MSIF) — Deep Dive. New BDC trading since January 29, 2025, externally managed by Main Street Capital (MAIN). Middle-market debt investments. Current monthly dividend: $0.11/month + $0.03 quarterly supplemental. Yield: 11.1%. Trading at 78% of book value ($12.35 vs $15.87 NAV).

Editor's position: Long MSIF.

Portfolio Update

• MRP added — August (covered above)
• PAGP removed — August 17 Stock of the Week
• ADAM — $0.30 dividend declared August 11 (+11% increase). Payment Oct 28, ex-div Sep 22
• FSCO — Monthly dividend raised to $0.0594/share (+1.9% from $0.0583). Share price $5.13 creeping toward $7.15 NAV
• Start Out Portfolio — HTGC, AMZA, KQQQ, RITM, PFFA

Gaps

No dividend increase expected for MSIF near-term (NII matches dividends). Energy Fortress research not yet published. Q3 solo 401(k) results pending.