Sure Retirement...3 Enterprise Products Partners (EPD) is an MLP and has different tax consequences...

Sure Retirement

HIGH-YIELD, HIGH-QUALITY SECURITIES

January 2021 Edition

By Ben Reynolds, Bob Ciura, Josh Arnold, and Eli Inkrot

Edited by Brad Beams

Published on January 10th, 2021

Table of Contents

Opening Thoughts - 2020 Showed The Power Of Buying During Declines - .......................... 3

The Sure Retirement Top 10 – January 2021 ............................................................................ 4

Analysis of Top 10 Securities ....................................................................................................... 5

Unum Group (UNM) .................................................................................................................. 5

National Fuel Gas Co. (NFG) ..................................................................................................... 8

Walgreens Boots Alliance Inc. (WBA) .................................................................................... 11

AT&T Inc. (T) .......................................................................................................................... 14

Altria Group Inc. (MO) ............................................................................................................. 17

H&R Block Inc. (HRB) ............................................................................................................ 20

Gilead Sciences Inc. (GILD)..................................................................................................... 23

Federal Realty Investment Trust (FRT) .................................................................................... 26

Enterprise Products Partners LP (EPD) .................................................................................... 29

People’s United Financial Inc. (PBCT) .................................................................................... 32

Closing Thoughts - Getting Paid To Wait - .............................................................................. 35

List of Securities by Retirement Suitability Score ................................................................... 36

List of Securities by Sector ......................................................................................................... 42

Sell Rules, Past Recommendations, Pending Sells, & Past Sells ............................................. 49

Sell Rules .................................................................................................................................. 49

Unsold Past Recommendations................................................................................................. 50

Sold Positions............................................................................................................................ 51

Pending Sells ............................................................................................................................. 52

Buying & Ranking Criteria ....................................................................................................... 53

Portfolio Building Guide ............................................................................................................ 54

Examples ................................................................................................................................... 54

Tax Guide .................................................................................................................................... 55

Corporations .............................................................................................................................. 56

Master Limited Partnerships (MLPs)........................................................................................ 57

Real Estate Investment Trusts (REITs)..................................................................................... 58

Business Development Companies (BDCs) ............................................................................. 59

Glossary of Common Terms & Acronyms ............................................................................... 60

3

Opening Thoughts - 2020 Showed The Power Of Buying During Declines -

2020 was the most unusual investing year (and non-investing) for that matter since Sure Dividend

was founded in 2014.

By March 23rd, the S&P 500 ETF (SPY) had generated total returns of negative 30.3%. This severe

decline occurred rapidly. The S&P 500 had peaked just over a month earlier on February 19th.

With a steep ~30% decline and a global pandemic, a recovery period measured in years seemed

most likely. Amazingly, the S&P 500 returned to positive returns on the year by June 8th. On

August 10th, the S&P 500 had generated total returns of 5.3% on the year, eclipsing the pre-COVID

mark. The S&P 500 ETF ended the year up 18.3% - while also suffering a 30.3% decline.

The key takeaway here is the power of buying during declines. It’s not easy to buy when others are

selling. Headlines are filled with pessimistic news. Uncertainty abounds.

While it’s not easy to buy when others are selling – it can be very beneficial because that’s when

the best bargains are typically found. When markets are in free fall many investors begin to ‘panic

sell;’ they unload securities for no other reason than they might fall farther. Investors who focus on

momentum – buying what is going up – start selling because of price declines. With so much

selling for reasons other than the intrinsic value and future business prospects of a company,

opportunities abound.

Falling market prices means more high-quality securities have yields greater than or equal to 4.0%.

Of the 10 securities we recommended in the April 2020 edition of The Sure Retirement Newsletter,

several have rallied significantly, while others are still deeply undervalued. The image below

shows the total returns of our Top 10 securities from April 2020 through January 6th, 2021, as well

as the S&P 500 ETF over the same period.

Several of the securities that have not fully recovered are recommended in this month’s edition of

The Sure Retirement Newsletter: Walgreens Boots Alliance (WBA), National Fuel Gas (NFG), and

Enterprise Products Partners (EPD). Please read more on this in this month’s Closing Thoughts.

https://www.suredividend.com/wp-content/uploads/2020/04/Sure-Retirement-2020-04-April-Newsletter-6OZC.pdf

4

The Sure Retirement Top 10 – January 2021

Name & Ticker Div. Risk

Score Price

Fair Value

Exp. Value Ret.

Div. or Dist. Yield

Payout Ratio1

Exp. Growth

ETR

Unum (UNM) A $24 $30 5.0% 4.7% 23% 2.0% 10.7%

National Fuel Gas (NFG) A $44 $57 5.3% 4.0% 47% 2.0% 10.5%

Walgreens (WBA) A $45 $49 1.6% 4.1% 38% 5.0% 10.2%

AT&T (T) B $29 $36 4.1% 6.9% 64% 3.0% 12.4%

Altria (MO) B $42 $47 2.4% 8.2% 77% 3.0% 11.8%

H&R Block (HRB) B $16 $18 1.9% 6.5% 32% 4.6% 11.5%

Gilead (GILD) B $63 $71 2.6% 4.3% 42% 5.0% 11.4%

Federal Realty (FRT)2 B $85 $90 1.2% 4.9% 93% 5.9% 11.2%

Enterprise Products (EPD)3 B $21 $19 -2.3% 8.4% 65% 5.5% 10.0%

People’s United (PBCT) B $14 $16 2.5% 5.5% 60% 3.0% 9.5%

Notes: Data for the table above is from the 1/8/21 Sure Analysis Research Database spreadsheet. ‘Div.’ stands for

‘Dividend.’ ‘Dist.’ stands for ‘Distribution.’ ‘Exp. Value Ret.’ means expected returns from valuation changes. ‘Exp.

Growth’ means expected annualized growth rate over the next five years. ‘ETR’ stands for expected total returns. Data

in the table above might be slightly different than individual company analysis pages due to writing the company reports

throughout the past week.

Disclosures: Ben Reynolds is long WBA, T, & MO from this month’s Top 10. Bob Ciura is long MO. Eli Inkrot is long

UNM, WBA, & T.

Hanesbrands (HBI), Magellan Midstream Partners (MMP), and Mercury General (MCY) were replaced

by H&R Block (HRB), Federal Realty (FRT), and People’s United (PBCT) in this month’s Top 10. As

a reminder, securities that are no longer in the Top 10 are holds, not sells.

An equally weighted portfolio of the Top 10 has the following future expected total returns estimate

characteristics:

Top 10 S&P 500

Dividend Yield: 5.7% 1.6%

Growth Rate: 3.9% 5.5%

Valuation Expansion: 2.4% -8.5%

Expected Annual Total Returns: 10.9% -1.4%

Notes: Data for this newsletter is from 1/5/21 through 1/8/21. We use the simplified method of calculating expected total

returns for the S&P 500, which is the sum of dividend yield, growth rate, and valuation multiple expansion/contraction.

1 The payout ratio for MLPs uses distributable cash flow (DCF). The payout ratio for REITs uses funds from operations (FFO). 2 Federal Realty Investment Trust (FRT) is a REIT and has different tax consequences versus common stocks. Please see the REIT

portion of our tax guide in this newsletter. 3 Enterprise Products Partners (EPD) is an MLP and has different tax consequences versus common stocks. Please see the MLP

portion of our Tax Guide in this newsletter, as well as the MLP Tax Consequences and the advantages & disadvantages of investing in

MLPs portions of our primary MLP article on Sure Dividend.

https://www.suredividend.com/mlp-list/#taxes

https://www.suredividend.com/mlp-list/#advantages

https://www.suredividend.com/mlp-list/#advantages

https://www.suredividend.com/mlp-list/

5

Return to Top 10 List

Analysis of Top 10 Securities

Unum Group (UNM)

Overview & Current Events

Unum Group is an insurance holding company providing a broad portfolio of financial protection

benefits and services. The company operates through its Unum US, Unum UK, Unum Poland and

Colonial Life businesses; providing disability, life, accident, critical illness, dental and vision benefits

to millions of customers. Unum generated revenue of approximately $12 billion last year.

On October 16th, 2020 Unum declared a $0.285 dividend, the sixth straight payment at this rate. On

October 27th, 2020 Unum reported Q3 2020 results for the period ending September 30th, 2020. For the

quarter, Unum generated $2.996 billion in revenue, up 1.2% compared to Q3 2019. Premium Income

(making up 77% of revenue) was down -0.6%, but this was positively offset by Investment Income,

Investment Gains, and Other Income. Adjusted earnings-per-share (EPS) totaled $1.21 versus $1.36 a

year ago. Book value per share equaled $53.50 compared to $46.70 at the end of Q3 2019.

Competitive Advantage & Recession Performance

Competitive advantages are difficult to achieve in the insurance industry, as the products are

commodity-like in nature and customers are often motivated by price. That said, Unum has developed

a solid position in its industry with a strong operating history in good times or bad.

During the last recession Unum posted earnings-per-share of $2.19, $2.51, $2.57 and $2.71 during the

2007 through 2010 stretch. Furthermore, the dividend kept increasing during this time as well. The

dividend payout ratio (now sitting at 23%) is also noteworthy, as there is ample room for future growth.

Growth Prospects, Valuation, & Catalyst

Over the past decade, Unum grew its earnings-per-share by approximately 8% per year on average.

More impressive, is the fact that earnings-per-share grew every single year during this period. Results

were driven by an average business growth rate (~3% per year) aided by a significant share repurchase

program which retired ~5% of the share count each year, due to a persistently low valuation.

Moving forward we believe Unum can continue to grow via premiums and investment income, expense

management and share repurchases. Although share repurchases were suspended for 2020 due to the

COVID-19 pandemic, we anticipate buybacks to resume in the short-term.

The company does face headwinds from exceptionally low interest rates, demand uncertainty related to

the COVID-19 pandemic, and concerns regarding the company’s long-term care policies. To account

for these, we are assuming only 2% annual EPS growth through 2026.

We expect Unum to generate adjusted earnings-per-share of $5.00 for 2020. Based on this, the stock is

presently trading at a price-to-earnings ratio (P/E) of just 4.8. Our fair value estimate is a P/E of 6.0,

which means expansion of the P/E multiple could add 4.7% annually to returns. When combined with

the 2% growth rate and 4.7% dividend yield, this implies the potential for 10.7% yearly gains.

Key Statistics, Ratios, & Metrics Years of Dividend Increases: 12 5-Year Growth Estimate: 2.0%

Dividend Yield: 4.7% 5-Year Valuation Return Estimate: 5.0%

Most Recent Dividend Increase: 9.6% 5-Year CAGR Estimate: 10.7%

Estimated Fair Value: $30 Dividend Risk Score: A

Stock Price: $24 Retirement Suitability Score: A

6


Income Statement Metrics Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenue 10193 10278 10515 10369 10525 10731 11047 11287 11599 11999

SG&A Exp. 776 808 787 790 821 835 839 852 886 898

D&A Exp. 75 81 84 85 88 100 102 103 101 110

Net Profit 879 284 894 847 402 867 931 994 523 1100

Net Margin 8.6% 2.8% 8.5% 8.2% 3.8% 8.1% 8.4% 8.8% 4.5% 9.2%

Free Cash Flow 1197 1096 1274 926 1109 1192 1037 1059 1392 1591

Income Tax 441 49 355 373 140 371 416 410 104 282

Balance Sheet Metrics

Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Assets 57308 59555 62236 59404 62450 60564 61942 64013 61876 67013

Cash & Equivalents 54 117 77 94 103 113 100 77 94 84

Accounts Receivable 1666 6527 6475 6454 6541 6324 6470 6545 6278 6384

Goodwill & Int. Ass. 201 232 225 220 214 255 367 367 447 440

Total Liabilities 48363 51386 53624 50745 53928 51900 52974 54438 53254 57048

Long-Term Debt 2856 2883 3211 2612 2781 2801 2999 2938 2971 3327

Shareholder’s Equity 8944 8170 8613 8659 8522 8664 8968 9575 8622 9965

D/E Ratio 0.32 0.35 0.37 0.30 0.33 0.32 0.33 0.31 0.34 0.33

Profitability & Per Share Metrics

Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Return on Assets 1.6% 0.5% 1.5% 1.4% 0.7% 1.4% 1.5% 1.6% 0.8% 1.7%

Return on Equity 10.1% 3.3% 10.7% 9.8% 4.7% 10.1% 10.6% 10.7% 5.8% 11.8%

ROIC 7.7% 2.5% 7.8% 7.3% 3.6% 7.6% 7.9% 8.1% 4.3% 8.8%

Shares Out. 327.2 303.6 281.8 265.9 256.7 247.9 236.0 227.3 220.1 209.9

Revenue/Share 31.15 33.86 37.32 38.99 41.01 43.30 46.81 49.65 52.71 57.18

FCF/Share 3.66 3.61 4.52 3.48 4.32 4.81 4.39 4.66 6.33 7.58

Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.

7


8


National Fuel Gas Co. (NFG) Overview & Current Events

National Fuel Gas is a diversified energy company with upstream, midstream, and downstream

operations. The company’s upstream assets located in the Marcellus and Utica shale formations have

production capacity of ~800 million cubic feet of gas per day. Upstream is ~42% of the company’s

annual earnings before interest, taxes, depreciation, and amortization (EBITDA). The midstream

operations, including pipeline infrastructure, are 37% of EBITDA. Finally, NFG’s downstream utility

segment provides utility services to over 740,000 customers and is 21% of total EBITDA.

In November, National Fuel Gas reported financial results for the fourth fiscal quarter and full fiscal

year. Adjusted earnings-per-share (EPS) of $0.40 for the quarter were a 26% year-over-year decline,

due primarily to weak commodity prices that impacted the company’s Exploration & Production (E&P)

segment. Partially offsetting declining oil and gas prices was a 14% increase in production, fueled by

the recent acquisition of upstream assets. Adjusted EBITDA increased 1.5% year-over-year.

Competitive Advantages & Recession Performance

National Fuel Gas’ competitive advantage is its combination of regulated and stable businesses

(pipelines and utilities) with cyclical and potentially higher-growth sectors (E&P). This allows the

company to endure difficult operating environments and downturns, such as the coronavirus pandemic,

with less difficulty than its peers which focus exclusively on more cyclical areas of energy.

Despite operating in the highly cyclical and economically sensitive energy industry, National Fuel Gas

performed very well during the Great Recession. Earnings-per-share increased 10% from 2007-2009,

with continued growth in the years after. This recession-resilience has allowed the company to

increase its dividend for 50 consecutive years. Looking further back, National Fuel Gas has paid

dividends to shareholders for 118 consecutive years. Since 1970, the company has paid over $3.2

billion in dividends to shareholders.


We expect 2.0% annual earnings-per-share growth over the next five years. Higher commodity prices

would be a meaningful boost, but even in the current environment we believe National Fuel Gas can

produce modest growth. The recent acquisition of Shell’s integrated upstream and midstream assets in

Pennsylvania for $541 million is expected to boost natural gas production by 215 to 230 million cubic

feet per day. The company also raised fiscal 2021 guidance, and now expects a more meaningful

recovery next year with adjusted earnings-per-share in a range of $3.55 to $3.85.

Based on expected fiscal 2021 adjusted EPS of $3.80, National Fuel Gas shares trade for a

Price/Earnings ratio (P/E) of 11.6. Our fair value estimate for NFG is a P/E of 15.0, meaning the stock

appears to be significantly undervalued. A P/E expanding from 11.6 to 15 could boost annual returns

by 5.3% per year, over the next five years. In addition, dividends and expected EPS growth will boost

shareholder returns. The combination of valuation changes, 2% annual EPS growth, and the 4.0%

dividend yield leads to total expected returns of 10.5% per year over the next five years.






9



Revenue 1,779 1,627 1,830 2,113 1,761 1,452 1,580 1,593 1,693 1,546

Gross Profit 924 940 1,042 1,123 1,075 1,055 1,080 1,014 1,031 568

Gross Margin 51.9% 57.8% 57.0% 53.2% 61.0% 72.6% 68.4% 63.7% 60.9% 36.7%

Operating Profit 441 448 518 570 515 532 594 520 512 479

Operating Margin 24.8% 27.5% 28.3% 27.0% 29.3% 36.6% 37.6% 32.6% 30.2% 31.0%

Net Profit 258 220 260 299 (379) (291) 283 392 304 (124)

Net Margin 14.5% 13.5% 14.2% 14.2% -21.5% -20.0% 17.9% 24.6% 18.0% -8.0%

Free Cash Flow (160) (376) 35 (5) (165) 7 234 31 (94) (482)

Income Tax 164 151 173 190 (319) (233) 161 (7) 85 19

Balance Sheet Metrics Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Assets 5,221 5,935 6,218 6,728 6,565 5,636 6,103 6,036 6,462 6,965



Inventories 82 78 94 67 65 71 74 78 80 85

Goodwill & Int. Ass. 5 5 5 5 5 5 5 5 5 5

Total Liabilities 3,329 3,975 4,024 4,317 4,539 4,109 4,400 4,099 4,323 4,993

Accounts Payable 142 88 105 137 180 108 126 160 132 134

Long-Term Debt 1,089 1,570 1,649 1,723 2,084 2,086 2,384 2,131 2,189 2,660

Shareholder’s Equity 1,892 1,960 2,195 2,411 2,025 1,527 1,704 1,937 2,139 1,972

D/E Ratio 0.58 0.80 0.75 0.71 1.03 1.37 1.40 1.10 1.02 1.35

Profitability & Per Share Metrics Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Return on Assets 5.0% 3.9% 4.3% 4.6% -5.7% -4.8% 4.8% 6.5% 4.9% -1.8%

Return on Equity 14.2% 11.4% 12.5% 13.0% -17.1% -16.4% 17.5% 21.5% 14.9% -6.0%

ROIC 8.6% 6.8% 7.1% 7.5% -9.2% -7.5% 7.4% 9.6% 7.2% -2.8%

Shares Out. 82.9 83.3 83.7 84.2 84.6 85.1 85.5 86.0 86.8 88.0

Revenue/Share 21.26 19.43 21.69 24.87 20.87 17.12 18.37 18.43 19.51 17.58

FCF/Share (1.92) (4.49) 0.42 (0.06) (1.95) 0.09 2.72 0.36 (1.09) (5.47)


10


11


Walgreens Boots Alliance Inc. (WBA)


Walgreens Boots Alliance is a pharmacy retailer with more than 21,000 stores in 11 countries, and

including equity investments, has a presence in more than 25 countries. The stock has a $39 billion

market cap, and the company produces $139 billion in annual revenue. Walgreens has increased its

dividend for 45 consecutive years, which makes it a member of the prestigious Dividend Aristocrats.

On January 7th, 2021 Walgreens reported Q1 fiscal year 2021 results for the period ending November

30th, 2020 (Walgreens fiscal year ends August 31st). For the quarter, sales increased 5.7% to $36.3

billion, led by a 3.9% increase in the Retail Pharmacy USA segment and an 18.6% increase in the

Pharmaceutical Wholesale division. The company posted an operating loss of -$440 million in the

quarter, as a result of a -$1.5 billion charge from the company’s equity earnings in AmerisourceBergen.

On an adjusted basis and excluding this charge, earnings-per-share (EPS) equaled $1.22, down from

$1.37 in Q1 2020. The company estimated adverse COVID-19 impacts of $0.26 to $0.30 per share,

which were partially offset by a lower share count. In addition, Walgreens maintained its fiscal 2021

guidance, anticipating low single-digit growth in adjusted EPS.


Walgreens’ competitive advantage is its leading market share. Its robust retail presence and convenient

locations encourage consumers to use Walgreens instead of its competitors. This brand strength means

customers keep coming back to Walgreens, providing the company with stable sales and growth.

Consumers are unlikely to cut spending on prescriptions and other healthcare products, even during

difficult economic times, which makes Walgreens very resistant to recessions. Walgreens’ adjusted

earnings-per-share declined by just 7% during 2009 and the company actually grew its adjusted

earnings-per-share from 2007 through 2010.


Walgreens has a positive long-term growth outlook. Retail pharmacy has proven to be resistant to e-

commerce and will benefit from the aging U.S. population and rising demand for healthcare. For

example, in the most recent quarter Walgreens’ sales growth was led by its Retail Pharmacy USA

segment and Pharmaceutical Wholesale division. Pharmacy sales, which accounted for 76.8% of the

Retail Pharmacy USA segment’s sales for the quarter, increased 5.9% compared with the year-ago

quarter. New partnerships are an additional growth catalyst, as Walgreens and DoorDash announced

an on-demand delivery collaboration.

Based on expected fiscal 2021 adjusted EPS of $4.90, Walgreens stock trades at a price-to-earnings

ratio (P/E) of 9.2. We believe Walgreens is valued too cheaply based on its strong business model,

competitive advantages, and long history of dividend increases. Our fair value estimate is a P/E of

10.0, which means expansion of the price-to-earnings ratio could add 1.6% to Walgreens’ annualized

returns through 2026. We expect this expansion to combine with expected 5% annualized EPS growth

and the 4.1% dividend yield to generate 10.2% annualized total returns.






12



Revenue ($B) 72 72 72 76 103 117 118 132 137 140

Gross Profit 20492 20342 21119 21569 26753 29874 29162 30792 30076 28017

Gross Margin 28.4% 28.4% 29.2% 28.2% 25.9% 25.5% 24.7% 23.4% 22.0% 20.1%

SG&A Exp. 16561 16878 17543 17992 22400 23910 23813 24694 25242 27045

D&A Exp. 1086 1166 1283 1316 1742 1718 1654 1770 2038 1927


Op. Margin 5.4% 4.8% 5.0% 4.7% 4.2% 5.1% 4.5% 4.6% 3.5% 0.7%

Net Profit 2714 2127 2548 1932 4220 4173 4078 5024 3982 456

Net Margin 3.8% 3.0% 3.5% 2.5% 4.1% 3.6% 3.4% 3.8% 2.9% 0.3%

Free Cash Flow 2430 2881 3089 2787 4413 6522 5904 6896 3892 4110

Income Tax 1580 1249 1499 1526 1056 997 760 998 588 360

Balance Sheet Metrics

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Assets 27454 33462 35481 37250 68782 72688 66009 68124 67598 87174


Acc. Receivable 2497 2167 2632 3218 6849 6260 6528 6573 7226 7132

Inventories 8044 7036 6852 6076 8678 8956 8899 9565 9333 9451

Goodwill & Int. 3229 3447 3717 3539 28723 25829 25788 28697 27436 26021



Long-Term Debt 2409 5392 5047 4490 14383 19028 12935 14397 16836 15742

Total Equity 14847 18236 19454 20513 30861 29880 27466 26007 23512 20637

D/E Ratio 0.16 0.30 0.26 0.22 0.47 0.64 0.47 0.55 0.72 0.76

Profitability & Per Share Metrics

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Return on Assets 10.1% 7.0% 7.4% 5.3% 8.0% 5.9% 5.9% 7.5% 5.9% 0.6%

Return on Equity 18.6% 12.9% 13.5% 9.7% 16.4% 13.7% 14.2% 18.8% 16.1% 2.1%

ROIC 15.9% 10.4% 10.6% 7.8% 11.9% 8.8% 9.0% 12.2% 9.7% 1.2%

Shares Out. 889 944 947 950 1,090 1,083 1,024 952 924 880

Revenue/Share 78.08 81.39 75.60 79.15 98.15 107.55 109.61 132.20 148.20 158.51

FCF/Share 2.63 3.27 3.23 2.89 4.19 5.98 5.47 6.93 4.21 4.67


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Return to Top 10 page

AT&T Inc. (T)


AT&T is the largest communications company in the world, providing a wide range of services,

including wireless, broadband, and television. The company operates in three business units: AT&T

Communications (providing mobile, broadband and video to almost 100 million U.S. consumers and

nearly 3 million businesses), WarnerMedia (including Turner, HBO, Warner Bros. and Xandr), and

AT&T Latin America serving 11 countries. AT&T has a market capitalization above $206 billion and

the company generated $181 billion in revenue last year.

On October 22nd, 2020, AT&T reported Q3 2020 results. The company generated $42.3 billion in

revenue, down from $44.6 billion in Q3 2019. The COVID-19 pandemic impacted revenue across all

segments, particularly WarnerMedia and domestic wireless services. Helping offset this was strong

subscriber additions including more than 5 million total domestic wireless net adds along with over 1

million postpaid net additions. On an adjusted basis, earnings-per-share (EPS) equaled $0.76 versus

$0.94 previously. The $0.76 figure does not adjust for (-$0.21) in negative COVID-19 impacts. Net

debt declined by $2.9 billion in the quarter and AT&T’s net debt-to-EBITDA ratio was 2.66x.


AT&T has a competitive advantage with its entrenched position and immense scale. The U.S. telecom

industry is dominated by three major players: AT&T, Verizon, and T-Mobile. It is very difficult for a

new telecom company to build a network with the necessary scale to compete with the established

industry giants. This gives AT&T a wide economic moat and a durable competitive advantage.

During the last recession, AT&T posted results of $2.76, $2.16, $2.12 and $2.29 in earnings-per-share

for the 2007 through 2010 period. The company did not eclipse its pre-recession high on an earnings

basis until 2016, but the dividend did continue to grow throughout the entire period. We expect AT&T

to remain highly profitable during challenging times and continue to increase its dividend each year.


AT&T is a colossal business, generating profits of $20+ billion annually, but it is not a fast grower.

From 2007 through 2019, AT&T grew earnings-per-share by 2.2% per year. That said, the company

still has growth avenues available from its media content - driven by the $85 billion acquisition of

Time Warner, which owns multiple media brands, including: TNT, TBS, CNN, and HBO. In addition,

the company is well positioned to take advantage of the 5G rollout. It also has the possibility of

repurchasing shares as it gets its debt under control. The company expects free cash flow of at least

$26 billion in 2021. We are forecasting 3% annual future EPS growth.

We expect AT&T to generate adjusted earnings-per-share of $3.25 in fiscal 2020. Based on this,

shares are presently trading at a price-to-earnings ratio (P/E) of 9.0. We view AT&T as undervalued,

with a fair value P/E estimate of 11.0, which indicates the potential for valuation expansion of 4.1% per

year. In conjunction with the 6.9% dividend yield and 3% expected EPS growth, this implies a 12.4%

annual total return potential.




Estimated Fair Value: $36 Dividend Risk Score: B


15



Revenue ($B) 124.3 126.7 127.4 128.8 132.4 146.8 163.8 160.5 170.8 181.2

Gross Profit 74023 71819 72206 77561 72302 79755 86596 82736 91337 97052

Gross Margin 59.6% 56.7% 56.7% 60.2% 54.6% 54.3% 52.9% 51.5% 53.5% 53.6%

SG&A Exp. 34986 41314 41066 28414 39697 32919 36845 35465 36765 39422

D&A Exp. 19379 18377 18143 18395 18273 22016 25847 24387 28430 28217


Op. Margin 15.8% 9.6% 10.2% 23.9% 10.8% 16.9% 14.6% 14.3% 15.3% 16.2%

Net Profit 19085 3944 7264 18418 6442 13345 12976 29450 19370 13903

Net Margin 15.4% 3.1% 5.7% 14.3% 4.9% 9.1% 7.9% 18.3% 11.3% 7.7%

Free Cash Flow 15692 14633 19711 13852 10139 16662 16926 17363 22844 29233

Income Tax -1162 2532 2900 9328 3619 7005 6479 -14.7B 4920 3493


Total Assets ($B) 269.4 270.4 272.3 277.8 296.8 402.7 403.8 444.1 531.9 551.7


Acc. Receivable 13610 13231 12657 12918 14527 16532 16794 16522 26472 22636

Goodwill/Int. ($B) 134.1 130.2 128.5 131.5 136.7 225.3 222.1 219.7 310.2 303.9

Total Liab. ($B) 157.4 164.6 179.6 186.3 206.6 279.0 279.7 302.1 338.0 349.7


LT Debt ($B) 66.2 64.8 69.8 74.8 81.8 126.2 123.5 164.3 176.5 161.1

Total Equity ($B) 111.6 105.5 92.4 91.0 89.7 122.7 123.1 140.9 184.1 184.2

D/E Ratio 0.59 0.61 0.76 0.82 0.91 1.03 1.00 1.17 0.96 0.87


Return on Assets 7.1% 1.5% 2.7% 6.7% 2.2% 3.8% 3.2% 6.9% 4.0% 2.6%

Return on Equity 17.9% 3.6% 7.3% 20.1% 7.1% 12.6% 10.6% 22.3% 11.9% 7.5%

ROIC 10.7% 2.3% 4.4% 11.2% 3.8% 6.3% 5.2% 10.6% 5.7% 3.8%

Shares Out. 5,911 5,927 5,581 5,226 5,187 6,145 6,139 6,139 7,282 7,348

Revenue/Share 20.93 21.30 21.89 23.91 25.37 26.00 26.46 25.97 25.09 24.65

FCF/Share 2.64 2.46 3.39 2.57 1.94 2.95 2.73 2.81 3.36 3.98


16


17


Altria Group Inc. (MO) Overview & Current Events

Altria sells cigarettes, chewing tobacco, cigars, e-cigarettes and wine under the Marlboro, Skoal,

Copenhagen, and St. Michelle brands, among others. The company also has a 10% equity stake in

Anheuser-Busch InBev (BUD), a 35% stake in e-cigarette maker Juul, and a 45% stake in the

marijuana company Cronos Group (CRON).

On October 30th, Altria reported financial results for the 2020 third quarter. Revenue (net of excise

taxes) of $5.7 billion increased 5% year-over-year. Smokeable volumes declined 0.2% for the quarter,

better than the 4% predicted drop. On a GAAP basis, Altria reported a loss of (-$0.51) per share, as the

company took a non-cash pre-tax impairment charge of $2.6 billion related to its investment in Juul.

However, adjusted earnings-per-share (EPS) came to $1.19 per share, beating estimates by $0.03 per

share. Adjusted earnings-per-share were flat in the third quarter on a year-over-year basis, while

adjusted EPS increased 5.6% over the first three quarters collectively. Altria also raised the low end of

its full-year guidance for adjusted earnings-per-share, to a range of $4.30 to $4.38, from $4.21 to $4.38.


Altria has tremendous competitive advantages. It has the most valuable cigarette brand in the U.S.,

Marlboro, which commands greater than a 40% domestic retail share. This gives Altria the ability to

raise prices to drive revenue growth, as it has done for many years. Thanks to Altria’s stable growth,

the company increased its dividend for the 51st consecutive year in 2020. With a target dividend

payout ratio of 80% of annual adjusted EPS, we view the dividend as safe.

Another benefit of Altria’s business model is that it is highly resistant to recessions. Cigarette and

alcohol sales hold up very well during recessions, which keep Altria’s profitability and dividend

growth intact. Given Altria’s own exposure to cigarettes and now, e-cigarette products, in addition to

its sizable investment stake in AB-InBev, it should hold up very well during the next downturn.


Altria’s biggest risk is the declining U.S. smoking rate, the impact of which was seen clearly in its

results in 2020. In response, Altria has invested heavily in non-combustible products, such as its $13

billion investment in e-cigarette leader Juul and its $1.8 billion investment in Cronos. Altria also

invested $372 million to acquire an 80% ownership stake in Swiss tobacco company, Burger Söhne

Group, to commercialize its tobacco leaf-free on! oral nicotine pouches. Finally, Altria is aggressively

expanding its own e-cigarette brand IQOS. In July, IQOS received approval from the FDA to be

marketed as a modified-risk tobacco product since it heats rather than burns tobacco.

Based on expected 2020 earnings-per-share of $4.31, Altria stock trades for a price-to-earnings ratio of

9.7, compared with our fair value estimate of 11.0. As a result, Altria stock appears to be undervalued,

which could result in positive returns of 2.4% per year over the next five years. In addition, we expect

3% annual earnings-per-share growth through 2026, while the stock has a high dividend yield of 8.2%.

Taken together, Altria stock has total expected returns of 11.8% per year over the next five years.






18



Revenue 16892 16619 17500 17663 17945 18854 19337 19494 19627 19796 Gross Profit 9188 8939 9563 10457 10160 11114 11572 11963 12254 12711

Gross Margin 54.4% 53.8% 54.6% 59.2% 56.6% 58.9% 59.8% 61.4% 62.4% 64.2% SG&A Exp. 2735 2643 2301 2340 2539 2708 2662 2338 2756 2226 D&A Exp. 276 253 225 212 208 225 204 209 227 226

Operating Profit 6264 6290 7314 8095 7619 8365 8910 9625 9498 10485 Op. Margin 37.1% 37.8% 41.8% 45.8% 42.5% 44.4% 46.1% 49.4% 48.4% 53.0% Net Profit 3905 3390 4180 4535 5070 5241 14239 10222 6963 -1293

Net Margin 23.1% 20.4% 23.9% 25.7% 28.3% 27.8% 73.6% 52.4% 35.5% -6.5% Free Cash Flow 2599 3476 3761 4244 4500 5614 3637 4702 8153 7591

Income Tax 1816 2189 2294 2407 2704 2835 7608 (399) 2374 2064


Total Assets 37402 36751 35329 34859 34475 31459 45932 43202 55459 49271 Cash & Equivalents 2314 3270 2900 3175 3321 2369 4569 1253 1333 2117

Acc. Receivable 85 268 193 115 124 124 151 142 142 152 Inventories 1803 1779 1746 1879 2040 2031 2051 2225 2331 2293

Goodwill & Int. 17292 17272 17252 17232 17334 17313 17321 17707 17475 17864 Total Liabilities 32175 33068 32159 30741 31465 28586 33159 27822 40670 42952

Accounts Payable 529 503 451 409 416 400 425 374 399 325 Long-Term Debt 12194 13689 13878 14517 14693 12847 13881 13894 25746 28042

Total Equity 5192 3680 3168 4119 3014 2880 12770 15377 14787 6222 D/E Ratio 2.35 3.72 4.38 3.52 4.87 4.46 1.09 0.90 1.74 4.51


Return on Assets 10.5% 9.1% 11.6% 12.9% 14.6% 15.9% 36.8% 22.9% 14.1% -2.5% Return on Equity 84.3% 76.4% 122% 125% 142% 178% 182% 72.6% 46.2% -12.3%

ROIC 23.3% 19.5% 24.3% 25.4% 27.9% 31.4% 67.2% 36.6% 19.9% -3.5% Shares Out. 2089 2044 2010 1994 1969 1960 1943 1901 1888 1860

Revenue/Share 8.13 8.05 8.65 8.84 9.07 9.61 9.91 10.15 10.40 10.59 FCF/Share 1.25 1.68 1.86 2.12 2.28 2.86 1.86 2.45 4.32 4.06


19


20


H&R Block Inc. (HRB) Overview & Current Events

H&R Block is global consumer tax services provider, offering comprehensive tax return preparation

and refund anticipation loans. The company has about 11,000 locations worldwide with a mix of

franchised and company-owned locations. H&R Block also recently began providing tax preparation

software to diversify against its core business, which has been in decline in recent years. Annual

revenue is in excess of $3 billion, and the company typically prepares about 23 million tax returns each

year. H&R Block’s market capitalization is $2.9 billion.

H&R Block reported second-quarter earnings on December 8th, with results coming in mixed as

revenue slightly beat expectations, but profits were weaker than expected. Revenue rose from $161

million in the year-ago period to $177 million in this year’s Q2. Gains were made in the U.S. and

Canada, which both saw higher tax return volumes.

The company’s pretax loss improved $24 million but still came in at -$237 million, with the

improvement coming from higher revenue and lower operating expenses. Adjusted earnings-per-share

came to -$1.09, which was down from -$0.85 in the year-ago period. The company said substantially

all of this decline was due to tax rate changes that occur in quarters when the company posts a loss, as

it did in Q2. H&R Block said it repurchased and retired 9.5 million shares at an aggregate price of

$150 million, or $15.83 per share.


H&R Block’s clear competitive advantage is that it is the market leader in tax preparation services.

Competitors are generally independent firms with a very small, local clientele, so H&R Block is a

leader in what is a highly fragmented industry. The company’s services, however, are under assault

from do-it-yourself software solutions, such as Intuit’s popular TurboTax franchise. H&R Block has

been working to combat this, but its core business continues to face downward pressure.

H&R Block isn’t necessarily recession-resistant, but it did remain profitable during the Great

Recession, and it did the same in 2020 during the COVID crisis. Since tax preparation is a mandatory

activity for taxpayers each year, H&R Block doesn’t face highly reduced demand due to recessions,

except to the extent that consumers find its services to be too expensive from financial hardship.


We see 4.6% annual growth from our earnings power estimate of $2.20 per share for fiscal 2021. The

lack of a simplified tax code removed a headwind for H&R Block, but we continue to see its growth

outlook as cloudy. The company’s acquisition of Wave Financial, which provides end-to-end

accounting services for small businesses, has helped H&R Block diversify away from tax return

preparation and introduce another avenue for growth.

We see shares as2,945 slightly undervalued at present, trading for 7.3 times our 2021 earnings power

estimate, which is below our fair value estimate of 8 times earnings. We expect 11.5% annual returns

in the coming years from the ample 6.5% yield, 4.6% growth, and a 1.9% tailwind from the valuation.




Estimated Fair Value: $18 Dividend Risk Score: B Stock Price: $16 Retirement Suitability Score: A

21



Revenue 2,945 2,894 2,906 3,024 3,079 3,038 3,036 3,160 3,095 2,640

Gross Profit 1,168 972 1,161 1,202 1,210 1,353 1,392 1,420 1,338 927

Gross Margin 39.7% 33.6% 40.0% 39.7% 39.3% 44.5% 45.8% 44.9% 43.2% 35.1%

SG&A Exp. 529 378 373 361 367 719 676 668 722 744

D&A Exp. 122 104 92 116 160 174 182 183 167 170



Net Profit 406 266 434 475 474 374 409 613 423 (8)

Net Margin 13.8% 9.2% 14.9% 15.7% 15.4% 12.3% 13.5% 19.4% 13.7% -0.3%

Free Cash Flow 450 280 384 663 503 445 463 751 511 27

Income Tax 235 230 237 267 256 186 208 42 100 (10)


Total Assets 5,208 4,650 4,538 4,694 4,515 2,847 2,694 3,141 3,300 5,112

Cash & Equivalents 1,678 1,944 1,748 2,185 2,007 897 1,011 1,545 1,572 2,662


Goodwill & Int. Ass. 1,214 704 719 792 874 905 901 882 862 1,127



Long-Term Debt 1,930 1,041 907 906 506 1,492 1,494 1,496 1,493 3,495

Shareholder’s Equity 1,450 1,326 1,264 1,557 1,833 23 (61) 394 542 71

D/E Ratio 1.33 0.78 0.72 0.58 0.28 64.59 (24.5) 3.80 2.76 49.20


Return on Assets 7.8% 5.4% 9.4% 10.3% 10.3% 10.2% 14.8% 21.0% 13.1% -0.2%

Return on Equity 28.1% 19.2% 33.5% 33.7% 27.9% 40.3% 368% 90.4% -2.5%

ROIC 12.0% 9.3% 19.1% 20.5% 19.7% 19.4% 27.7% 36.9% 21.5% -0.3%

Shares Out. 272.6 274.2 275.3 220.5 207.2 209.3 207.0 207.0 207.0 198.1

Revenue/Share 9.51 9.69 10.59 10.96 11.11 12.11 14.18 15.03 14.97 13.32

FCF/Share 1.45 0.94 1.40 2.40 1.82 1.77 2.16 3.57 2.47 0.14


22


23


Gilead Sciences Inc. (GILD)


Gilead Sciences is a biotechnology company that focuses on antiviral medications and treatments. The

company generates significant revenue from treatments for HIV, Hepatitis B and C, and various types

of cancer. Gilead was founded in 1987, produces more than $23 billion in annual revenue, and trades

with a market capitalization of $79 billion.

On October 23rd, 2020, Gilead announced it had completed the acquisition of Immunomedics for a total

consideration of $21 billion. On October 28th, 2020, Gilead reported Q3 2020 results. Revenue came

to $6.6 billion during the quarter, which was an increase of 17% year-over-year. The company’s

Hepatitis C business continued to shrink as Gilead grapples with its treatments curing the disease they

treat, resulting in a smaller patient pool. Remdesivir continued to show strong results as a treatment for

COVID-19, but we note that the World Health Organization recently released guidance for medical

professionals to not use Remdesivir for COVID-19, so we expect a reduction in revenue growth for that

product. Biktarvy sales soared 50% year-over-year, although some of this was as a result of

cannibalizing sales from other HIV treatments.

Earnings-per-share came to $2.11 during the third quarter, from $1.64 in the prior year, and Gilead

boosted guidance to $23.3 billion in revenue at the midpoint. We expect Gilead to generate $6.45 in

adjusted earnings-per-share this year following very strong third-quarter results.

Competitive Advantage & Recession Performance

Gilead’s competitive advantage is its treatments for HIV and Hepatitis B and C, as it leads these spaces

in terms of market share. Gilead’s only “issue” is that its treatments work so well that some patients

don’t need them any longer, reducing the patient pool. Gilead’s continued work on cancer treatments

should help it offset some of this and help it maintain an advantage in the future.

Gilead isn’t necessarily beholden to economic conditions as people generally seek treatment for

ailments irrespective of whether we’re in a recession or not. Gilead’s profits held up quite well during

the Great Recession and are doing so again during 2020’s recession.


We expect Gilead to produce 5% annual growth moving forward as the company continues to see top

line expansion from new treatments, and its takeover of Immunomedics should help as well. Gilead

should see strong operating leverage as revenue moves higher given that biotechs generally have very

small variable costs, so incremental revenue produces large margin gains.

We see Gilead producing 11.4% total annual returns in the coming years, consisting of 5% projected

earnings-per-share growth, the ample 4.3% dividend yield, and a 2.6% tailwind from the valuation.

Gilead shares trade for 9.6 times this year’s earnings-per-share estimate of $6.45, and we assess fair

value at 11 times earnings. The moderate payout ratio also provides a long dividend growth runway.






24



Revenue 7,949 8,385 9,702 11,202 24,890 32,639 30,390 26,107 22,127 22,449

Gross Profit 6,080 6,261 7,231 8,343 21,102 28,633 26,129 21,736 17,274 17,774

Gross Margin 76.5% 74.7% 74.5% 74.5% 84.8% 87.7% 86.0% 83.3% 78.1% 79.2%

SG&A Exp. 1,044 1,242 1,461 1,699 2,983 3,426 3,398 3,878 4,056 4,381

D&A Exp. 265 302 278 345 1,050 1,098 1,158 1,286 1,429

Operating Profit 3,962 3,790 4,010 4,524 15,265 22,193 17,633 14,124 8,200 4,287


Net Profit 2,901 2,804 2,592 3,075 12,101 18,108 13,501 4,628 5,455 5,386

Net Margin 36.5% 33.4% 26.7% 27.5% 48.6% 55.5% 44.4% 17.7% 24.7% 24.0%

Free Cash Flow 2,772 3,507 2,798 2,915 12,261 20,503 16,299 11,308 7,476 ---

Income Tax 1,024 862 1,038 1,151 2,797 3,553 3,609 8,885 2,339 (204)


Total Assets 11,593 17,303 21,240 22,579 34,664 51,716 56,977 70,283 63,675 61,627

Cash & Equivalents 908 9,884 1,804 2,113 10,027 12,851 8,229 7,588 17,940 ---

Accounts Receivable 1,622 1,951 1,751 2,182 4,635 5,854 4,514 3,851 3,327 3,582

Inventories 1,204 1,390 1,745 1,697 1,386 1,955 1,587 801 814 2,067

Goodwill & Int. Ass. 1,426 2,067 12,797 13,069 12,245 11,419 10,143 21,259 19,855 17,903


Accounts Payable 803 1,206 1,327 1,256 955 1,178 1,206 814 790 ---

Long-Term Debt 3,485 7,607 8,224 6,636 12,404 22,055 26,346 33,542 27,322 ---


D/E Ratio 0.59 1.13 0.88 0.58 0.80 1.19 1.39 1.64 1.28 ---


Return on Assets 27.3% 19.4% 13.4% 14.0% 42.3% 41.9% 24.8% 7.3% 8.1% 8.6%

Return on Equity 47.4% 44.5% 32.3% 29.7% 90.3% 106.6% 72.2% 23.5% 26.1% 24.5%

ROIC 33.4% 23.3% 16.1% 17.0% 51.9% 52.2% 31.1% 9.3% 10.6% 15.1%

Shares Out. 1.60 1.51 1.52 1.53 1.50 1.42 1.31 1.31 1.30 1.27

Revenue/Share 4.55 5.31 6.13 6.61 15.11 21.46 22.38 19.79 16.92 17.58

FCF/Share 1.59 2.22 1.77 1.72 7.44 13.48 12.00 8.57 5.72


25


26


Federal Realty Investment Trust (FRT) Overview & Current Events

Federal Realty is a real estate investment trust, or REIT, which specializes in the ownership, operation,

and redevelopment of high-quality, retail-based properties. Federal Realty has focused over the years

on building its portfolio in coastal markets in the U.S. that have a constrained real estate supply. This

has led to the trust’s steady growth and resilience to downturns, and it enjoys industry-leading pricing

with strong occupancy. The trust owns a portfolio of just over 100 properties with 2,800 tenants. The

portfolio produces more than $800 million in annual revenue, and shares trade with a $6.4 billion

market capitalization. Federal Realty is also a Dividend King, with 53 years of dividend increases.

Federal Realty reported third-quarter earnings on November 5th and results were predictably weak,

although they did beat expectations on the top and bottom lines. FFO-per-share declined from $1.43 in

the year-ago period to $1.22, and total revenue was down 11% to $208 million. However, rent

collections came to 85% in Q3 as Federal Realty continues to work with impacted tenants to keep them

in place until a recovery comes. The trust also signed 101 new leases for 481 thousand square feet of

space, which is a good sign for near-term demand.

The trust’s resilience during the COVID crisis showed why it is a Dividend King, having been able to

stay highly profitable in one of the worst environments for retail since the Great Depression. We see

$4.55 in FFO-per-share for 2020; note that we are using an earnings power estimate of $6.00 per share,

which normalizes results from COVID impacts.


Federal Realty’s competitive advantage is in its extremely high-quality portfolio of retail properties,

which is the best in the business. This means that not only does Federal Realty have strong, sustained

demand for its spaces, but it can charge industry-leading prices per square foot. This is no accident; the

trust’s coastal markets are carefully selected for population growth, income growth, and scarcity of

supply. The formula has worked for decades.

Recessions impact Federal Realty’s tenants in the retail industry, and therefore impact Federal Realty

through lower leasing volumes. The trust has managed to raise its dividend for more than five decades

because it weathers economic storms, with yet more evidence from the COVID crisis. Federal Realty

held up well considering the circumstances and is one of the more resilient retail REITs in this respect.


We expect Federal Realty to produce annual growth of 5.9% from our 2020 earnings power estimate of

$6.00 per share. This is consistent with the trust’s historical growth rates, but we note that this growth

is unlikely to be smooth. REITs in general tend to see lumpy profit growth, and Federal Realty has

exhibited this behavior as well. However, over time, the combination of rent increases and a growing

portfolio should see Federal Realty’s FFO-per-share move higher. The stock is trading for slightly

below fair value, and we see 11.2% average annual returns in the coming years. With the yield at 5%,

Federal Realty remains a strong income pick, and we see value in the shares at the current price.






27



Revenue 542 551 606 637 686 744 802 857 915 936

Gross Profit 373 381 427 447 474 511 548 585 628 637

Gross Margin 68.8% 69.2% 70.4% 70.1% 69.1% 68.6% 68.4% 68.2% 68.6% 68.1%

SG&A Exp. 24 29 31 32 32 36 33 36 34 43

D&A Exp. 120 127 142 161 171 175 194 216 244 240



Net Profit 123 144 152 163 165 210 250 290 242 354

Net Margin 22.7% 26.1% 25.1% 25.5% 24.0% 28.3% 31.2% 33.8% 26.4% 37.8%

Free Cash Flow 168 102 116 24 (15) 87 (10) (60) 148 52


Total Assets 3,160 3,666 3,899 4,219 4,547 4,897 5,423 6,276 6,290 6,795





Long-Term Debt 1,080 2,047 2,137 2,250 2,338 2,556 2,727 3,213 3,158 3,357


D/E Ratio 0.94 1.68 1.66 1.55 1.46 1.54 1.38 1.42 1.35 1.32


Return on Assets 3.8% 4.2% 4.0% 4.0% 3.8% 4.5% 4.8% 5.0% 3.9% 5.4%

Return on Equity 10.6% 12.3% 12.2% 12.0% 10.9% 12.9% 13.8% 14.2% 11.3% 15.5%

ROIC 5.6% 5.2% 4.5% 4.5% 4.2% 5.0% 5.5% 5.6% 4.3% 6.1%

Shares Out. 62 64 65 67 69 69 72 73 74 75

Revenue/Share 8.84 8.80 9.46 9.73 10.17 10.79 11.28 11.87 12.49 12.52

FCF/Share 2.73 1.63 1.81 0.37 (0.22) 1.25 (0.14) (0.83) 2.02 0.70


28


29


Enterprise Products Partners LP (EPD) Overview & Current Events

Enterprise Products Partners is a midstream master limited partnership (MLP) with services including

storage and transportation of oil and gas. Enterprise Products Partners’ assets include approximately

50,000 miles of pipelines; 260 million barrels of storage capacity for Natural Gas Liquids (NGL), crude

oil, and other refined products; and 14 billion cubic feet of natural gas storage capacity.

In late October (10/28/20), Enterprise Products reported third-quarter results. Adjusted EBITDA

increased 1.8% for the third quarter, year-over-year. Distributable cash flow (DCF) increased 0.4% for

the period. Growth was fueled by volume increases and new assets placed in service. In the third

quarter, gross operating profits were flat in the NGL Pipelines & Services segment while they declined

2% in Crude Oil Pipelines & Services. The Natural Gas Pipelines & Services segment saw gross

operating profit decline 20% while Petrochemical & Refined Products Services grew 9%.


Enterprise Products has tremendous competitive advantages, primarily its vast network of assets. It

would be enormously costly to build out a network of pipelines and terminals large enough to compete

with Enterprise Products. These are high-quality assets, which generate strong cash flow, even in

recessions. Enterprise Products has been able to raise its distribution for 22 years in a row, including

its most recent increase of 1.1% year-over-year, just announced on January 7th.

Cash flow and distributions are likely to hold up, even during a recession. Enterprise Products is

arguably the safest MLP in our coverage universe. The partnership has an investment-grade credit

rating of BBB+ from Standard & Poor’s and Baa1 from Moody’s. In addition, the MLP reported a

distribution coverage ratio of 1.7x in the third quarter. In terms of debt, Enterprise Products had a

trailing 12-month leverage ratio of 3.5x, right on par with the company’s target leverage ratio.


Enterprise Products Partners’ future growth will come from new projects. Enterprise Products has

benefited from higher cash flows from the completion of two NGL fractionators that began service in

2020. Exports are another growth catalyst, as demand for liquefied petroleum gas (LPG) and liquefied

natural gas (LNG) is growing rapidly globally, particularly in Asia. It has also announced cost

reductions to boost cash flow. In 2021 and 2022, Enterprise Products sees growth capital expenditures

of $1.6 billion and $800 million, respectively, compared with $2.9 billion expected to be spent in 2020.

We expect 5.5% annualized growth from Enterprise Products Partners over the next five years.

We expect Enterprise Products to generate DCF-per-unit of $2.75 for 2020. Based on this, the

company trades with a price-to-DCF ratio of 7.7. Our fair value estimate for Enterprise Products is a

DCF multiple of 7x. We believe this MLP is slightly overvalued, and a declining valuation multiple

could reduce annual returns by 2.3% per year. Fortunately, DCF growth and distributions will offset a

declining valuation multiple. Including 5.5% expected annual DCF-per-unit growth and the 8.4%

yield, we expect annualized returns of 10.0% for Enterprise Products Partners.

Key Statistics, Ratios, & Metrics Years of Distribution Increases: 22 5-Year Growth Estimate: 5.5%

Distribution Yield: 8.4% 5-Year Valuation Return Estimate: -2.3%

Most Recent Distrib. Increase: 1.1% 5-Year CAGR Estimate: 10.0%

Estimated Fair Value: $19 Distribution Risk Score: B

Security Price: $21 Retirement Suitability Score: A

30



Revenue 33,739 44,313 42,583 47,727 47,951 27,028 23,022 29,242 36,534 32,789

Gross Profit 2,290 2,995 3,215 3,488 3,731 3,359 3,379 3,684 5,137 5,727

Gross Margin 6.8% 6.8% 7.6% 7.3% 7.8% 12.4% 14.7% 12.6% 14.1% 17.5%

SG&A Exp. 205 182 170 188 215 193 160 181 208 212

Operating Profit 985 1,007 1,105 1,218 1,361 1,516 1,552 1,644 1,792 1,949

Op. Margin 2,085 2,813 3,045 3,300 3,516 3,167 3,219 3,503 4,929 5,516

Net Profit 6.2% 6.3% 7.2% 6.9% 7.3% 11.7% 14.0% 12.0% 13.5% 16.8%

Net Margin 321 2,047 2,420 2,597 2,787 2,521 2,513 2,799 4,172 4,591

Free Cash Flow 1.0% 4.6% 5.7% 5.4% 5.8% 9.3% 10.9% 9.6% 11.4% 14.0%

Income Tax 259 (537) (731) 457 1,269 172 1,083 1,565 1,903 1,989


Total Assets 31,361 34,125 35,934 40,139 47,201 48,802 52,194 54,418 56,970 61,733


Acc. Receivable 3,837 4,502 4,351 5,476 3,823 2,570 3,330 4,358 3,659 4,874

Inventories 1,134 1,112 1,088 1,093 1,014 1,038 1,771 1,610 1,522 2,091

Goodwill & Int. 3,949 3,749 3,654 3,542 8,602 9,782 9,609 9,436 9,354 9,194


Accounts Payable 675 773 765 724 774 860 398 802 1,103 1,005

Long-Term Debt 13,564 14,529 16,202 17,352 21,364 22,541 23,698 24,569 26,178 27,625

Total Equity 11,374 12,113 13,188 15,215 18,063 20,295 22,047 22,547 23,854 24,764


Return on Assets 1.1% 6.3% 6.9% 6.8% 6.4% 5.3% 5.0% 5.3% 7.5% 7.7%

Return on Equity 4.8% 17.4% 19.1% 18.3% 16.8% 13.1% 11.9% 12.6% 18.0% 18.9%

Shares Out. 1687.4 1763.2 1797.6 1871.4 1937.3 2012.6 2117.6 2161.1 2187 2200

Revenue/Share 60.57 26.87 24.71 25.90 25.30 13.52 11.02 13.57 16.71 14.89

FCF/Share 0.47 (0.33) (0.42) 0.25 0.67 0.09 0.52 0.73 0.87 0.90


31


32


People’s United Financial Inc. (PBCT) Overview & Current Events

People’s United Financial is a regional bank and financial services company with operations located

primarily on the east coast of the U.S. The stock has a market capitalization of $6.0 billion as shares

have begun recovering value lost during the initial selloff from COVID-19 in early 2020. As interest

rates have moved higher, so have bank stocks, including People’s United.

People’s United’s most recent earnings report was for the third quarter and was released on October

22nd. Results showed strength in revenue and earnings, although the 8.3% gain in the top line still

missed expectations slightly. Net interest margin was down fractionally to 3.0%, which is still quite

strong among regional banks, and in particular, considering the state of the yield curve. As longer-term

rates rise, People’s United stands to benefit from larger lending spreads.

Net interest income was down 3% year-over-year in Q3, but noninterest income gained 13% on higher

fees. That meant that earnings were relatively unscathed in Q3, matching the prior year total at $0.34

per share. Q3’s earnings performance was up nicely from the $0.24 performance of the second quarter

as the company saw fairly rapid improvement from dire conditions early in 2020. Credit quality

improved in Q3 as well in the form of lower provisions for credit losses. Due to this, we boosted our

estimate of earnings-per-share for this year from $1.10 to $1.20.


Competitive advantages are hard to come by in the banking industry, but People’s United has

established itself with a long and successful track record of generating steady growth. The company

has a network of 400+ branches, with total assets of $61 billion. It has also increased its dividend for

28 consecutive years, placing it on the exclusive list of Dividend Aristocrats.

People’s United is not a recession-resistant company. As a financial services provider, its profits are

highly correlated to economic growth. For example, from 2007-2010, earnings-per-share declined

54%. However, it remained profitable and continued to increase its dividend through the Great

Recession. We expect $1.20 in earnings-per-share for 2020; the current dividend payout stands at

$0.72 per share, for a dividend payout ratio of 60%. Thus, the dividend is quite safe.


People’s United is facing uncertainty due to COVID-19, but we note that earnings rebounded quickly.

In addition, the bank has a positive growth outlook in the coming years. Acquisitions will continue to

help the company expand its geographic reach and customer base. In the last six years, it has grown its

loans and deposits at a 9% average annual rate. Going forward, we expect 3% annual earnings-per-

share growth over the next five years, building on $1.20 in earnings-per-share for 2020.

Based on this, the stock trades for a price-to-earnings ratio (P/E) of 11.7. Our fair value estimate is a

P/E of 13, which we believe is warranted due to the company’s growth potential and dividend history.

Combining valuation changes of 2.5% with the 3.0% expected annual earnings growth and the 5.1%

dividend yield, we expect total returns of 9.5% per year from People’s United Financial.






33



Revenue 964 1221 1249 1230 1242 1275 1315 1453 1602 1843

SG&A Exp. 418 489 485 495 511 521 534 593 640 754

D&A Exp. 73 65 66 67 64 63 61 69 58 74

Net Profit 83 192 245 232 252 260 281 337 468 520

Net Margin 8.6% 15.8% 19.6% 18.9% 20.3% 20.4% 21.4% 23.2% 29.2% 28.2%

Free Cash Flow 148 131 429 295 297 248 294 574 501 173

Income Tax 40 93 124 115 129 130 129 130 108 132


Total Assets 25037 27558 30324 33214 35997 38947 40610 44453 47877 58590


Goodwill & Int. 1962 2174 2154 2127 2103 2088 2142 2560 2866 3285


Long-Term Debt 691 519 1838 4370 3326 4497 4127 3884 3311 4119

Total Equity 5219 5215 5039 4568 4633 4732 4898 5576 6290 7703

D/E Ratio 0.13 0.10 0.36 0.96 0.72 0.95 0.80 0.67 0.51 0.52


Return on Assets 0.4% 0.7% 0.8% 0.7% 0.7% 0.7% 0.7% 0.8% 1.0% 1.0%

Return on Equity 1.6% 3.7% 4.8% 4.8% 5.5% 5.6% 5.8% 6.4% 7.9% 7.4%

ROIC 1.5% 3.3% 3.9% 2.9% 3.0% 3.0% 3.0% 3.6% 4.8% 4.8%

Shares Out. 352.6 348.7 338.4 312.0 298.3 300.4 304.0 332.9 372.8 425.0

Revenue/Share 2.73 3.50 3.69 3.94 4.16 4.25 4.33 4.37 4.56 4.64

FCF/Share 0.42 0.38 1.27 0.95 0.99 0.83 0.97 1.72 1.43 0.44


34


35

Closing Thoughts - Getting Paid To Wait -

In this month’s Opening Thoughts we looked at the power of buying during market declines as well as the performance of the Top 10 Sure Retirement Newsletter recommendations from April 2020. While several of the securities from that newsletter have gone on to generate excellent total returns, several others have not.

The four worst performing securities are Weyco (WEYS), Walgreens (WBA), National Fuel Gas (NFG), and Enterprise Products Partners (EPD). Three of these four (WEYS is the exception4) are recommendations in this January 2021 edition of The Sure Retirement Newsletter. We view them as buys because they still offer attractive expected total returns.

The April 2020 Top 10 is a good spectrum of what happens when you buy into undervalued securities. Many have worked out favorably from a total return perspective as their valuation multiples have revised upwards.

The ones that have not (WEYS, WBA, and to a lesser extent, NFG and EPD) have all paid solid dividends in the meantime. The yield on cost for these securities is below:

With an average yield on cost5 of 6.1%, investors in these securities are getting ‘paid to wait’ for either the valuation multiple to rise or for the underlying business to grow.

When buying into high-quality income securities with high yields, investors don’t need the valuation multiple to quickly rise, or for the business to rapidly grow its dividend. Time is on the side of the investor as solid investment income rolls in quarter after quarter.

Thanks,

Ben Reynolds

The next Sure Retirement Newsletter publishes on Sunday, February 14th, 2021

4 For those wondering, we have significantly lowered our future earnings-per-share expectations for WEYS, which is why it isn’t still

being recommended as a buy. We are likely overly conservative on the security currently and may revise our earnings estimates

upwards somewhat in the next quarterly update we do on this security. 5 Yield on cost is based on closing price data from the first Monday after the newsletter went live, April 13 th, 2020.

36

List of Securities by Retirement Suitability Score

Each of the securities in the Sure Analysis Research Database are grouped according to Retirement

Suitability Score and sorted (from highest to lowest) by Expected Total Returns. Dividend or

Distribution Yield is included next to each security’s ticker symbol. The Retirement Suitability

Score is a combination of the Dividend Risk Score and the security’s Distribution or Dividend

Yield. You can learn more about how the score is calculated at the Sure Analysis Procedures,

Glossary, & Definitions.

Note: Check the Sure Analysis Research Database for the most up-to-date Retirement Suitability

Scores and Dividend or Distribution Yields. These rankings will not always align with our Top 10

list due to additional safety constraints we impose on the Top 10 as well as when different aspects

of the newsletter are compiled. See our ‘Buying and Ranking Criteria’ for more information.

A-Rated Retirement Suitability

Securities 1. Energy Transfer LP (ET): 15.6%

2. Magellan Midstream Partners LP (MMP): 9.2%

3. MPLX LP (MPLX): 11.4%

4. Sunoco LP (SUN): 10.8%

5. Enbridge Inc (ENB): 7.7%

6. ONEOK Inc. (OKE): 9.1%

7. Telephone and Data Systems, Inc. (TDS): 3.6%

8. AT&T, Inc. (T): 6.9%

9. Altria Group Inc. (MO): 8.1%

10. Walgreens Boots Alliance Inc (WBA): 4.4%

11. Gilead Sciences, Inc. (GILD): 4.5%

12. First of Long Island Corp. (FLIC): 4%

13. Unum Group (UNM): 5%

14. Federal Realty Investment Trust (FRT): 5%

15. Enterprise Products Partners LP (EPD): 8.6%

16. British American Tobacco plc (BTI): 6.9%

17. H&R Block Inc. (HRB): 6.4%

18. National Fuel Gas Co. (NFG): 4.1%

19. People`s United Financial Inc (PBCT): 4%

20. Sun Life Financial, Inc. (SLF): 4.8%

21. UGI Corp. (UGI): 3.7%

22. General Dynamics Corp. (GD): 2.9%

23. Black Hills Corporation (BKH): 3.6%

24. Bank of Nova Scotia (BNS): 8.2%

25. Verizon Communications Inc (VZ): 8.3%

26. Community Trust Bancorp, Inc. (CTBI): 4%

27. Matthews International Corp. (MATW): 2.9%

28. Franklin Resources, Inc. (BEN): 4.4%

29. AbbVie Inc (ABBV): 4.3%

30. Cardinal Health, Inc. (CAH): 3.6%

31. Royal Bank of Canada (RY): 5.1%

32. Toronto Dominion Bank (TD): 5.4%

33. Northwest Natural Holding Co (NWN): 4.3%

34. Kimberly-Clark Corp. (KMB): 3.2%

35. International Business Machines Corp. (IBM): 5.1%

36. Archer Daniels Midland Co. (ADM): 2.8%

37. Aflac Inc. (AFL): 2.6%

38. MDU Resources Group Inc (MDU): 3.2%

39. Fortis Inc. (FTS): 4.2%

40. MetLife Inc (MET): 3.8%

41. 3M Co. (MMM): 3.4%

42. Consolidated Edison, Inc. (ED): 4.3%

43. National Retail Properties Inc (NNN): 5.2%

44. Canadian Imperial Bank of Commerce (CM): 6.6%

45. Arrow Financial Corp. (AROW): 3.3%

46. Weyco Group, Inc (WEYS): 5.7%

47. Leggett & Platt, Inc. (LEG): 3.7%

48. PPL Corp (PPL): 5.9%

49. Genuine Parts Co. (GPC): 3.1%

50. Sonoco Products Co. (SON): 2.9%

51. Macerich Co. (MAC): 10.1%

52. Johnson & Johnson (JNJ): 2.5%

53. Nucor Corp. (NUE): 2.9%

54. Emerson Electric Co. (EMR): 2.5%

55. Southside Bancshares Inc (SBSI): 3.9%

56. First Financial Corp. - Indiana (THFF): 2.7%

57. Universal Corp. (UVV): 5.9%

58. Procter & Gamble Co. (PG): 2.2%

59. Tompkins Financial Corp (TMP): 2.9%

60. United Bankshares, Inc. (UBSI): 4.2%

B-Rated Retirement Suitability

Securities 1. SFL Corporation Ltd (SFL): 15.1%

2. Preferred Apartment Communities Inc (APTS): 10.4%

3. Holly Energy Partners LP (HEP): 11.5%

4. Suburban Propane Partners LP (SPH): 11.8%

5. Lockheed Martin Corp. (LMT): 2.8%

https://www.suredividend.com/sure-analysis-research-database/


https://www.suredividend.com/procedures-glossary-definitions/



37

6. Office Properties Income Trust (OPI): 9.4%

7. Northrop Grumman Corp. (NOC): 1.9%

8. Kinder Morgan Inc (KMI): 7.2%

9. Genesis Energy LP (GEL): 15%

10. Perrigo Company plc (PRGO): 2%

11. Huntington Ingalls Industries Inc (HII): 2.5%

12. Lumen Technologies Inc (LUMN): 9.9%

13. Bristol-Myers Squibb Co. (BMY): 3%

14. China Mobile Limited (CHL): 7.1%

15. Telefonica S.A (TEF): 10.7%

16. Old Republic International Corp. (ORI): 4.3%

17. New Jersey Resources Corporation (NJR): 3.8%

18. L3Harris Technologies Inc (LHX): 1.9%

19. Geo Group, Inc. (GEO): 19.3%

20. Sempra Energy (SRE): 3.3%

21. Enterprise Bancorp, Inc. (EBTC): 2%

22. Intel Corp. (INTC): 2.6%

23. Chimera Investment Corp (CIM): 13.6%

24. Mercury General Corp. (MCY): 4.8%

25. DHT Holdings Inc (DHT): 23.2%

26. Navient Corp (NAVI): 6.1%

27. Brookfield Infrastructure Partners L.P (BIP): 3.9%

28. Polaris Inc (PII): 2.5%

29. Iron Mountain Inc. (IRM): 8.3%

30. CyrusOne Inc (CONE): 2.9%

31. Williams Cos Inc (WMB): 7.5%

32. KNOT Offshore Partners LP (KNOP): 13%

33. CVS Health Corp (CVS): 2.8%

34. Cisco Systems, Inc. (CSCO): 3.2%

35. Lowe`s Cos., Inc. (LOW): 1.4%

36. Atmos Energy Corp. (ATO): 2.5%

37. Flowers Foods, Inc. (FLO): 3.4%

38. Hanesbrands Inc (HBI): 4.1%

39. Kroger Co. (KR): 2.1%

40. Merck & Co Inc (MRK): 3%

41. Tyson Foods, Inc. (TSN): 2.7%

42. AMGEN Inc. (AMGN): 2.8%

43. Becton, Dickinson And Co. (BDX): 1.3%

44. Oracle Corp. (ORCL): 1.5%

45. Omnicom Group, Inc. (OMC): 4.1%

46. Realty Income Corp. (O): 4.6%

47. Prudential Financial Inc. (PRU): 5.6%

48. ABM Industries Inc. (ABM): 1.4%

49. Otter Tail Corporation (OTTR): 3.5%

50. DTE Energy Co. (DTE): 3.4%

51. Silgan Holdings Inc. (SLGN): 1.3%

52. Prosperity Bancshares Inc. (PB): 2.7%

53. Alliant Energy Corp. (LNT): 3%

54. Edison International (EIX): 4.2%

55. Campbell Soup Co. (CPB): 2.8%

56. Assurant Inc (AIZ): 1.9%

57. M & T Bank Corp (MTB): 3.4%

58. Simon Property Group, Inc. (SPG): 7%

59. Philip Morris International Inc (PM): 5.6%

60. AvalonBay Communities Inc. (AVB): 4%

61. Raytheon Technologies Corporation (RTX): 3.1%

62. Amerisource Bergen Corp. (ABC): 1.7%

63. Whirlpool Corp. (WHR): 2.7%

64. Comcast Corp (CMCSA): 2.2%

65. Fresenius Medical Care AG & Co. KGaA (FMS): 1.7%

66. Keurig Dr Pepper Inc (KDP): 2.8%

67. General Mills, Inc. (GIS): 3.3%

68. Ameriprise Financial Inc (AMP): 2.2%

69. Best Buy Co. Inc. (BBY): 2.2%

70. AGNC Investment Corp (AGNC): 9.8%

71. Novartis AG (NVS): 3.3%

72. Tennant Co. (TNC): 1.3%

73. Donaldson Co. Inc. (DCI): 1.5%

74. Service Properties Trust (SVC): 5%

75. W. P. Carey Inc (WPC): 6%

76. Carlisle Companies Inc. (CSL): 1.3%

77. Coca-Cola Co (KO): 3.1%

78. J.M. Smucker Co. (SJM): 3%

79. Whitestone REIT (WSR): 6.8%

80. Targa Resources Corp (TRGP): 4.3%

81. Easterly Government Properties Inc (DEA): 4.6%

82. Lazard Ltd. (LAZ): 4.4%

83. SEI Investments Co. (SEIC): 1.3%

84. Physicians Realty Trust (DOC): 5.3%

85. Bank of Montreal (BMO): 5.5%

86. Duke Energy Corp. (DUK): 4.2%

87. Hormel Foods Corp. (HRL): 2%

88. Southern Company (SO): 4.2%

89. American Electric Power Company Inc. (AEP): 3.4%

90. Travelers Companies Inc. (TRV): 2.5%

91. Gorman-Rupp Co. (GRC): 1.8%

92. Enerplus Corporation (ERF): 3.1%

93. Williams-Sonoma, Inc. (WSM): 1.9%

94. TELUS Corp. (TU): 5%

95. International Flavors & Fragrances Inc. (IFF): 2.8%

96. H.B. Fuller Company (FUL): 0.9%

97. Greif Inc (GEF): 3.6%

98. Clorox Co. (CLX): 2.2%

99. Chubb Limited (CB): 2%

100. McGrath RentCorp (MGRC): 2.4%

101. Snap-on, Inc. (SNA): 2.7%

102. Entergy Corp. (ETR): 3.8%

103. Kellogg Co (K): 3.6%

104. Artesian Resources Corp. (ARTNA): 2.7%

105. Universal Health Realty Income Trust (UHT): 4.2%

106. John Wiley & Sons Inc. (JW.A): 2.8%

107. Bank OZK (OZK): 2.4%

108. Target Corp (TGT): 1.5%

109. Rogers Communications Inc. (RCI): 4.1%

110. Automatic Data Processing Inc. (ADP): 2.2%

111. Everest Re Group Ltd (RE): 2.7%

112. Brady Corp. (BRC): 1.6%

113. Pentair plc (PNR): 1.5%

114. Public Service Enterprise Group Inc. (PEG): 3.5%

115. T. Rowe Price Group Inc. (TROW): 2.4%

116. Colgate-Palmolive Co. (CL): 2.1%

117. Digital Realty Trust Inc (DLR): 3.3%

118. Stanley Black & Decker Inc (SWK): 1.6%

119. Western Union Company (WU): 4%

120. Parker-Hannifin Corp. (PH): 1.3%

121. Walmart Inc (WMT): 1.5%

122. Tanger Factory Outlet Centers, Inc. (SKT): 6.9%

123. Dover Corp. (DOV): 1.6%

38

124. PepsiCo Inc. (PEP): 2.8%

125. Eastman Chemical Co (EMN): 2.6%

126. NextEra Energy Partners LP (NEP): 3.2%

127. WPP plc. (WPP): 5.7%

128. Westamerica Bancorporation (WABC): 2.8%

129. PPG Industries, Inc. (PPG): 1.4%

130. Cullen Frost Bankers Inc. (CFR): 3.2%

131. Medtronic plc (MDT): 1.9%

132. SJW Group (SJW): 1.8%

133. Illinois Tool Works, Inc. (ITW): 2.2%

134. Abbott Laboratories (ABT): 1.3%

135. W.W. Grainger Inc. (GWW): 1.5%

136. RPM International, Inc. (RPM): 1.6%

137. Lancaster Colony Corp. (LANC): 1.6%

138. Diversified Healthcare Trust (DHC): 4.4%

139. American States Water Co. (AWR): 1.6%

140. MSA Safety Inc (MSA): 1.1%

141. BancFirst Corp. (BANF): 2.2%

142. Air Products & Chemicals Inc. (APD): 1.9%

143. MGE Energy, Inc. (MGEE): 2.1%

144. Eaton Vance Corp. (EV): 2%

145. Cincinnati Financial Corp. (CINF): 2.8%

146. California Water Service Group (CWT): 1.6%

147. Vermilion Energy Inc (VET): 11.4%

148. Middlesex Water Co. (MSEX): 1.5%

149. Community Bank System, Inc. (CBU): 2.6%

150. CorEnergy Infrastructure Trust Inc (CORR): 12.7%

C-Rated Retirement Suitability

Securities 1. Great Elm Capital Corp (GECC): 12.6%

2. SL Green Realty Corp. (SLG): 4.1%

3. CNOOC Ltd. (CEO): 9%

4. China Petroleum & Chemical Corp (SNP): 8%

5. USA Compression Partners LP (USAC): 14.5%

6. Pfizer Inc. (PFE): 4%

7. FirstEnergy Corp. (FE): 5.1%

8. Principal Financial Group Inc (PFG): 4.5%

9. Thermo Fisher Scientific Inc. (TMO): 0.2%

10. TC Energy Corporation (TRP): 6.9%

11. Newtek Business Services Corp (NEWT): 10.3%

12. GlaxoSmithKline plc (GSK): 5.3%

13. FedEx Corp (FDX): 1%

14. Icahn Enterprises LP (IEP): 10.3%

15. Hewlett Packard Enterprise Co (HPE): 4%

16. TC Pipelines, LP (TCP): 8.4%

17. Boston Properties, Inc. (BXP): 4.3%

18. Sanofi (SNY): 3.5%

19. LTC Properties, Inc. (LTC): 5.8%

20. NACCO Industries Inc. (NC): 2.9%

21. Home Depot, Inc. (HD): 2.2%

22. Sixth Street Specialty Lending Inc (TSLX): 7.9%

23. Farmers & Merchants Bancorp (FMCB): 0%

24. Truist Financial Corporation (TFC): 3.7%

25. B&G Foods, Inc (BGS): 6.9%

26. Mckesson Corporation (MCK): 0.9%

27. Omega Healthcare Investors, Inc. (OHI): 7.2%

28. Republic Services, Inc. (RSG): 1.8%

29. Ares Capital Corp (ARCC): 9.3%

30. PennantPark Floating Rate Capital Ltd (PFLT): 10.1%

31. Dollar General Corp. (DG): 0.7%

32. Ritchie Bros Auctioneers Inc (RBA): 1.5%

33. UnitedHealth Group Inc (UNH): 1.4%

34. HP Inc (HPQ): 2.9%

35. TriplePoint Venture Growth BDC Corp (TPVG): 10.7%

36. Healthcare Trust of America Inc (HTA): 4.7%

37. Höegh LNG Partners LP (HMLP): 11.3%

38. Two Harbors Investment Corp (TWO): 7.9%

39. MGM Growth Properties LLC (MGP): 6.1%

40. PSB Holdings Inc (WI) (PSBQ): 0%

41. Sabine Royalty Trust (SBR): 8%

42. Landmark Infrastructure Partners LP (LMRK): 8%

43. New York Community Bancorp Inc. (NYCB): 6.2%

44. New Residential Investment Corp (NRZ): 5.2%

45. Shaw Communications Inc. (SJR): 7%

46. Kraft Heinz Co (KHC): 4.7%

47. STAG Industrial Inc (STAG): 4.7%

48. Bank Of New York Mellon Corp (BK): 2.9%

49. Starwood Property Trust Inc (STWD): 10%

50. Gladstone Investment Corporation (GAIN): 7.9%

51. Blackstone Mortgage Trust Inc (BXMT): 9.2%

52. Interpublic Group of Cos., Inc. (IPG): 4.3%

53. Prospect Capital Corp (PSEC): 12.2%

54. Ellington Financial Inc (EFC): 8.3%

55. Annaly Capital Management Inc (NLY): 10.6%

56. Spirit Realty Capital Inc (SRC): 6.5%

57. Keycorp (KEY): 4.4%

58. Sap SE (SAP): 1.3%

59. Sabra Healthcare REIT Inc (SBRA): 7.6%

60. Orchid Island Capital Inc (ORC): 14.6%

61. S&P Global Inc (SPGI): 0.8%

62. Brookfield Property Partners LP (BPY): 9.5%

63. Medical Properties Trust Inc (MPW): 5.1%

64. Global Net Lease Inc (GNL): 7.4%

65. Essex Property Trust, Inc. (ESS): 3.6%

66. Public Storage (PSA): 3.6%

67. BCE Inc (BCE): 6.5%

68. Mondelez International Inc. (MDLZ): 2.1%

69. Gladstone Commercial Corp (GOOD): 8.1%

70. Intercontinental Exchange Inc (ICE): 1.1%

71. Cummins Inc. (CMI): 2.4%

72. Crown Castle International Corp (CCI): 3.1%

73. Horizon Technology Finance Corp (HRZN): 8.7%

74. Gladstone Capital Corp. (GLAD): 8.6%

75. Blackrock Inc. (BLK): 2%

76. Gladstone Land Corp (LAND): 4.5%

77. ARMOUR Residential REIT Inc (ARR): 10.7%

78. CoreSite Realty Corporation (COR): 4%

79. Huntington Bancshares, Inc. (HBAN): 4.6%

80. Exelon Corp. (EXC): 3.7%

81. Moody`s Corp. (MCO): 0.8%

82. Solar Senior Capital Ltd (SUNS): 8.4%

83. RenaissanceRe Holdings Ltd (RNR): 0.9%

84. Broadmark Realty Capital Inc (BRMK): 7.5%

85. MSC Industrial Direct Co., Inc. (MSM): 2.6%

86. Spark Energy Inc (SPKE): 7.3%

39

87. Stryker Corp. (SYK): 1%

88. Applied Materials Inc. (AMAT): 1%

89. Hercules Capital Inc (HTGC): 8.8%

90. Brookfield Renewable Partners LP (BEP): 2.7%

91. Chesapeake Financial Shares Inc (CPKF): 0%

92. Cross Timbers Royalty Trust (CRT): 8%

93. Apollo Commercial Real Estate Finance Inc (ARI): 12.6%

94. Costco Wholesale Corp (COST): 0.7%

95. FBL Financial Group, Inc. (FFG): 3.8%

96. American Tower Corp. (AMT): 2%

97. New Mountain Finance Corp (NMFC): 12.7%

98. Stellus Capital Investment Corp (SCM): 9.6%

99. Dynex Capital, Inc. (DX): 9.1%

100. Apollo Global Management Inc (APO): 4.7%

101. Booz Allen Hamilton Holding Corp (BAH): 1.4%

102. Pembina Pipeline Corporation (PBA): 10.4%

103. Unilever plc (UL): 3%

104. United Parcel Service, Inc. (UPS): 2.5%

105. Seagate Technology plc (STX): 4.3%

106. Roper Technologies Inc (ROP): 0.5%

107. Fox Corporation (FOXA): 1.6%

108. Church & Dwight Co., Inc. (CHD): 1.1%

109. Hershey Company (HSY): 2.1%

110. CSX Corp. (CSX): 1.2%

111. Invesco Ltd (IVZ): 4.3%

112. AllianceBernstein Holding LP (AB): 8.1%

113. Tractor Supply Co. (TSCO): 1.1%

114. U.S. Bancorp. (USB): 3.6%

115. Visa Inc (V): 0.6%

116. A.O. Smith Corp. (AOS): 1.8%

117. Qualcomm, Inc. (QCOM): 1.7%

118. Diageo plc (DEO): 2.2%

119. Arthur J. Gallagher & Co. (AJG): 1.5%

120. Expeditors International of Washington, Inc. (EXPD): 1.1%

121. WEC Energy Group Inc (WEC): 2.8%

122. Microsoft Corporation (MSFT): 1%

123. Brown & Brown, Inc. (BRO): 0.5%

124. Ladder Capital Corp (LADR): 9.5%

125. PacWest Bancorp (PACW): 5%

126. Caterpillar Inc. (CAT): 2.2%

127. Urstadt Biddle Properties, Inc. (UBA): 4.4%

128. Patterson Companies Inc. (PDCO): 3.4%

129. Ventas Inc (VTR): 4.4%

130. 1st Source Corp. (SRCE): 2.8%

131. Arbor Realty Trust Inc. (ABR): 8.5%

132. Sysco Corp. (SYY): 1.8%

133. Stepan Co. (SCL): 0.7%

134. McDonald`s Corp (MCD): 2.4%

135. Antero Midstream Corp (AM): 13.7%

136. Canadian Pacific Railway Ltd (CP): 1%

137. eBay Inc. (EBAY): 1.2%

138. Tootsie Roll Industries, Inc. (TR): 0.9%

139. Sherwin-Williams Co. (SHW): 0.7%

140. Kimco Realty Corp. (KIM): 3.7%

141. Xcel Energy, Inc. (XEL): 2.6%

142. Norfolk Southern Corp. (NSC): 1.6%

143. Jack Henry & Associates, Inc. (JKHY): 1.1%

144. McCormick & Co., Inc. (MKC): 1.4%

145. Newell Brands Inc (NWL): 4.1%

146. C.H. Robinson Worldwide, Inc. (CHRW): 2.2%

147. Waste Management, Inc. (WM): 1.9%

148. Fastenal Co. (FAST): 2%

149. Skyworks Solutions, Inc. (SWKS): 1.5%

150. HNI Corp. (HNI): 3.5%

151. Rio Tinto plc (RIO): 4.8%

152. Computer Services, Inc. (CSVI): 0%

153. Union Pacific Corp. (UNP): 1.9%

154. Commerce Bancshares, Inc. (CBSH): 1.6%

155. Essential Utilities Inc (WTRG): 2.1%

156. Oxford Square Capital Corp (OXSQ): 16.8%

157. Canadian National Railway Co. (CNI): 1.2%

158. Linde plc (LIN): 1.5%

159. Franklin Electric Co., Inc. (FELE): 0.9%

160. Rockwell Automation Inc (ROK): 1.7%

161. NextEra Energy Inc (NEE): 1.9%

162. Honeywell International Inc (HON): 1.7%

163. Lilly (Eli) & Co (LLY): 1.8%

164. Cintas Corporation (CTAS): 0.8%

165. Otis Worldwide Corp (OTIS): 0.9%

166. Deere & Co. (DE): 1.1%

167. Nordson Corp. (NDSN): 0.8%

168. Ecolab, Inc. (ECL): 0.9%

169. Textron Inc. (TXT): 0.2%

170. Infosys Ltd (INFY): 1.6%

171. Brookfield Asset Management Inc. (BAM): 1.4%

172. Carrier Global Corp (CARR): 0.7%

173. Brown-Forman Corp. (BF.B): 0.9%

174. PermRock Royalty Trust (PRT): 4.8%

175. AptarGroup Inc. (ATR): 1.1%

176. Erie Indemnity Co. (ERIE): 1.6%

177. West Pharmaceutical Services, Inc. (WST): 0.2%

178. RLI Corp. (RLI): 0.9%

179. Albemarle Corp. (ALB): 0.9%

180. VEREIT Inc (VER): 5%

D-Rated Retirement Suitability

Securities 1. Tencent Holdings Ltd. (TCEHY): 0%

2. Innovative Industrial Properties Inc (IIPR): 2.5%

3. HollyFrontier Corp (HFC): 5.4%

4. Ping AN Insurance (Group) Co. of China, Ltd. (PNGAY):

0%

5. Eagle Financial Services, Inc. (EFSI): 0%

6. Exxon Mobil Corp. (XOM): 7.7%

7. Morgan Stanley (MS): 2%

8. Suncor Energy, Inc. (SU): 5.9%

9. Bayer AG (BAYRY): 0%

10. PetroChina Co. Ltd. (PTR): 5.9%

11. Total SE (TOT): 5.2%

12. BP plc (BP): 8.2%

13. Phillips 66 (PSX): 4.9%

14. Royal Dutch Shell plc (RDS.B): 5.1%

15. Valero Energy Corp. (VLO): 6.7%

16. Prologis Inc (PLD): 2.4%

17. Axis Capital Holdings Ltd (AXS): 3.3%

18. Chevron Corp. (CVX): 5.8%

40

19. Hasbro, Inc. (HAS): 2.9%

20. ViacomCBS Inc (VIAC): 2.6%

21. Jack In The Box, Inc. (JACK): 1.3%

22. Consolidated Water Co. Ltd. (CWCO): 2.6%

23. Lam Research Corp. (LRCX): 1%

24. Allstate Corp (The) (ALL): 2%

25. Marathon Petroleum Corp (MPC): 5.4%

26. Yum Brands Inc. (YUM): 1.8%

27. Brixmor Property Group Inc (BRX): 3.2%

28. Permian Basin Royalty Trust (PBT): 6.1%

29. Dominion Energy Inc (D): 4.7%

30. Amcor plc (AMCR): 4%

31. Red Eléctrica Corporación S.A. (RDEIY): 0%

32. Broadcom Inc (AVGO): 3.1%

33. America Móvil S.A.B.DE C.V. (AMX): 0%

34. CenterPoint Energy Inc. (CNP): 3.4%

35. Store Capital Corp (STOR): 4.3%

36. New York Mortgage Trust Inc (NYMT): 6.1%

37. American Express Co. (AXP): 1.1%

38. Camden Property Trust (CPT): 3.4%

39. Comerica, Inc. (CMA): 4.7%

40. Conoco Phillips (COP): 4%

41. Bank of America Corp. (BAC): 2.4%

42. Citigroup Inc (C): 3.3%

43. CNA Financial Corp. (CNA): 3.8%

44. Domino’s Pizza Inc (DPZ): 0.8%

45. Intuit Inc (INTU): 0.6%

46. Vector Group Ltd (VGR): 6.5%

47. NetApp Inc (NTAP): 2.2%

48. Conagra Brands Inc (CAG): 2.5%

49. Equity Residential Properties Trust (EQR): 4.2%

50. Ally Financial Inc (ALLY): 2.1%

51. Restaurant Brands International Inc (QSR): 4.4%

52. Northeast Indiana Bancorp Inc. (NIDB): 0%

53. Barrick Gold Corp. (GOLD): 1.4%

54. Main Street Capital Corporation (MAIN): 7.5%

55. SK Telecom Co Ltd (SKM): 0.4%

56. Synchrony Financial (SYF): 2.5%

57. Advance Auto Parts Inc (AAP): 0.6%

58. National Bank of Canada (NTIOF): 0%

59. Newmont Corp (NEM): 1.6%

60. Johnson Controls International plc (JCI): 2.2%

61. Algonquin Power & Utilities Corp (AQN): 3.4%

62. Compass Diversified Holdings (CODI): 5.3%

63. Eni Spa (E): 5.6%

64. Healthpeak Properties Inc (PEAK): 5%

65. RELX plc (RELX): 2.3%

66. Artisan Partners Asset Management Inc (APAM): 5.4%

67. Novo Nordisk (NVO): 1.8%

68. WestRock Co (WRK): 2.4%

69. Foot Locker Inc (FL): 2.3%

70. Baker Hughes Co (BKR): 3.3%

71. Koninklijke Philips N.V. (PHG): 1.7%

72. Schlumberger Ltd. (SLB): 3.7%

73. Telefonaktiebolaget L M Ericsson (ERIC): 1.3%

74. Toro Co. (TTC): 1.1%

75. Alexandria Real Estate Equities Inc. (ARE): 2.5%

76. Goldman Sachs Group, Inc. (GS): 1.8%

77. DuPont de Nemours Inc (DD): 1.6%

78. JPMorgan Chase & Co. (JPM): 2.8%

79. Oshkosh Corp (OSK): 1.4%

80. Gaming and Leisure Properties Inc (GLPI): 3.4%

81. Weyerhaeuser Co. (WY): 1.5%

82. Logitech International SA (LOGI): 0.8%

83. Cognizant Technology Solutions Corp. (CTSH): 1.1%

84. KLA Corp. (KLAC): 1.3%

85. Nielsen Holdings plc (NLSN): 1.2%

86. Pearson plc (PSO): 2.7%

87. Canadian Natural Resources Ltd. (CNQ): 7.8%

88. UBS Group AG (UBS): 2.4%

89. General Motors Company (GM): 0.9%

90. Garmin Ltd (GRMN): 2%

91. Lamar Advertising Co (LAMR): 3%

92. Texas Instruments Inc. (TXN): 2.3%

93. Magna International Inc. (MGA): 2.7%

94. Xerox Holdings Corp (XRX): 4.3%

95. Paychex Inc. (PAYX): 2.7%

96. Kontoor Brands Inc (KTB): 2.4%

97. CME Group Inc (CME): 1.9%

98. Equinor ASA (EQNR): 4%

99. Dow Inc (DOW): 4.9%

100. CF Industries Holdings Inc (CF): 3%

101. Starbucks Corp. (SBUX): 1.6%

102. Paccar Inc. (PCAR): 1.8%

103. Lincoln Electric Holdings, Inc. (LECO): 1.3%

104. Occidental Petroleum Corp. (OXY): 4.3%

105. International Paper Co. (IP): 4%

106. Covanta Holding Corporation (CVA): 3.7%

107. Summit Hotel Properties Inc (INN): 2%

108. ResMed Inc. (RMD): 0.7%

109. Hannon Armstrong Sustainable Infrastructure capital Inc

(HASI): 2.1%

110. Vodafone Group plc (VOD): 6.1%

111. Constellation Brands Inc (STZ): 1%

112. LyondellBasell Industries NV (LYB): 4.5%

113. Compass Minerals International Inc (CMP): 4.6%

114. Welltower Inc (WELL): 4.3%

115. Blackstone Group Inc (The) (BX): 3%

116. UMB Financial Corp. (UMBF): 1.8%

117. Gap, Inc. (GPS): 1.2%

118. Corning, Inc. (GLW): 2.4%

119. BHP Group Limited (BHP): 3.4%

120. Nutrien Ltd (NTR): 2.6%

121. Xylem Inc (XYL): 1%

122. ABB Ltd. (ABB): 2.9%

123. Helmerich & Payne, Inc. (HP): 7.4%

124. Accenture plc (ACN): 1.3%

125. NVIDIA Corp (NVDA): 0.1%

126. Owens & Minor, Inc. (OMI): 0%

127. Wells Fargo & Co. (WFC): 3.9%

128. Halliburton Co. (HAL): 1.5%

129. VF Corp. (VFC): 2.2%

130. Tiffany & Co. (TIF): 1.8%

131. Nike, Inc. (NKE): 0.7%

132. Chemours Company (CC): 3.7%

133. Harley-Davidson, Inc. (HOG): 1.2%

134. Harvest Capital Credit Corp (HCAP): 5.1%

135. Marriott International, Inc. (MAR): 0.4%

41

136. AstraZeneca plc (AZN): 2.7%

137. Morningstar Inc (MORN): 0.5%

138. Honda Motor (HMC): 2%

139. Apple Inc (AAPL): 0.6%

140. Trane Technologies plc (TT): 1.4%

141. Tapestry Inc (TPR): 1%

142. Sony Corp. (SNE): 0.5%

143. Thomson-Reuters Corp (TRI): 2%

144. HSBC Holdings plc (HSBC): 4%

145. Eaton Corporation plc (ETN): 2.4%

146. Yamana Gold Inc. (AUY): 1.7%

147. Apache Corp. (APA): 7.4%

148. Waddell & Reed Financial, Inc. (WDR): 3.9%

149. Badger Meter Inc. (BMI): 0.8%

150. Kulicke & Soffa Industries, Inc. (KLIC): 1.5%

F-Rated Retirement Suitability

Securities 1. Inter Pipeline Ltd. (IPPLF): 0%

2. Sampo plc (SAXPY): 0%

3. Chatham Lodging Trust (CLDT): 2.1%

4. Canadian Utilities Ltd. (CDUAF): 0%

5. Great-West Lifeco, Inc. (GWLIF): 0%

6. Fairfax Financial Holdings Ltd. (FRFHF): 0%

7. Aon plc. (AON): 0.4%

8. Exchange Income Corp. (EIFZF): 0%

9. Calvin b. Taylor Bankshares, Inc. (TYCB): 0%

10. Imperial Brands plc (IMBBY): 0%

11. Deutsche Telekom AG (DTEGY): 0%

12. Industria De Diseño Textil SA (IDEXY): 0%

13. Superior Plus Corp. (SUUIF): 0%

14. Collectors Universe Inc (CLCT): 0.9%

15. Bayerische Motoren Werke AG (BMWYY): 0%

16. Itaú Unibanco Holding S.A. (ITUB): 0.8%

17. Chorus Aviation, Inc. (CHRRF): 0%

18. Swiss Re Ltd (SSREY): 0%

19. Dream Office Real Estate Investment Trust (DRETF): 0%

20. Gazprom (OGZPY): 0%

21. Discover Financial Services (DFS): 1.4%

22. Imperial Oil Ltd. (IMO): 2.6%

23. Sienna Senior Living, Inc. (LWSCF): 0%

24. Münchener Rückversicherungs-Gesellschaft AG (MURGF):

0%

25. Global Water Resources Inc (GWRS): 2%

26. ASML Holding NV (ASML): 0.6%

27. Aegon N. V. (AEG): 0.3%

28. Siemens AG (SIEGY): 0%

29. Gold Resource Corporation (GORO): 1.3%

30. Vale S.A. (VALE): 0%

31. Choice Properties Real Estate Investment Trust (PPRQF): 0%

32. Scholastic Corp. (SCHL): 2.4%

33. Nestle SA (NSRGY): 0%

34. Cheesecake Factory Inc. (CAKE): 1%

35. Tenaris S.A. (TS): 0.8%

36. TJX Companies, Inc. (TJX): 0.3%

37. Anheuser-Busch In Bev SA/NV (BUD): 0.8%

38. Dream Industrial Real Estate Investment Trust (DREUF): 0%

39. Cedar Fair LP (FUN): 2.3%

40. Canon Inc (CAJ): 2%

41. Daimler AG (DDAIF): 0%

42. Kansas City Southern (KSU): 0.8%

43. Mastercard Incorporated (MA): 0.5%

44. Darden Restaurants, Inc. (DRI): 1%

45. Ambev S.A. (ABEV): 0%

46. Wheaton Precious Metals Corp (WPM): 0.9%

47. Olin Corp. (OLN): 3.1%

48. Marvell Technology Group Ltd (MRVL): 0.5%

49. Ryder System, Inc. (R): 2.6%

50. Wendy`s Co (WEN): 1.3%

51. TransAlta Renewables, Inc. (TRSWF): 0%

52. Dunkin Brands Group Inc (DNKN): 0%

53. General Electric Co. (GE): 0.4%

54. Dillard`s Inc. (DDS): 1%

55. Taiwan Semiconductor Manufacturing (TSM): 1.5%

56. U.S. Global Investors, Inc. (GROW): 0.5%

57. Patterson-UTI Energy Inc (PTEN): 1.6%

58. Ferrari N.V. (RACE): 0.5%

59. MGM Resorts International (MGM): 0.5%

60. Wynn Resorts Ltd. (WYNN): 0.9%

42

List of Securities by Sector

Each of the securities in the Sure Analysis Research Database are grouped according to sector and

Retirement Suitability Score and sorted (from highest to lowest) by Expected Total Returns.

Dividend or Distribution Yield is included next to each security’s ticker symbol. The Retirement

Suitability Score is a combination of the Dividend Risk Score and the security’s Distribution

or Dividend Yield. You can learn more about how the score is calculated at the Sure Analysis

Procedures, Glossary, & Definitions.

Note: Check the Sure Analysis Research Database for the most up-to-date Retirement Suitability

Scores and Dividend or Distribution Yields. These rankings will not always align with our Top 10

list due to additional safety constraints we impose on the Top 10 as well as when different aspects

of the newsletter are compiled. See our ‘Buying and Ranking Criteria’ for more information.

Basic Materials A-Ranked Retirement Suitability 1. MDU Resources Group Inc (MDU): 3.2%

2. Nucor Corp. (NUE): 2.9%

B-Ranked Retirement Suitability 1. International Flavors & Fragrances Inc. (IFF): 2.8%

2. H.B. Fuller Company (FUL): 0.9%

3. Eastman Chemical Co (EMN): 2.6%

4. PPG Industries, Inc. (PPG): 1.4%

5. RPM International, Inc. (RPM): 1.6%

6. Air Products & Chemicals Inc. (APD): 1.9%

C-Ranked Retirement Suitability 1. Stepan Co. (SCL): 0.7%

2. Sherwin-Williams Co. (SHW): 0.7%

3. Rio Tinto plc (RIO): 4.8%

4. Linde plc (LIN): 1.5%

5. Ecolab, Inc. (ECL): 0.9%

6. Albemarle Corp. (ALB): 0.9%

D-Ranked Retirement Suitability 1. Barrick Gold Corp. (GOLD): 1.4%

2. Newmont Corp (NEM): 1.6%

3. DuPont de Nemours Inc (DD): 1.6%

4. Dow Inc (DOW): 4.9%

5. CF Industries Holdings Inc (CF): 3%

6. LyondellBasell Industries NV (LYB): 4.5%

7. Compass Minerals International Inc (CMP): 4.6%

8. BHP Group Limited (BHP): 3.4%

9. Nutrien Ltd (NTR): 2.6%

10. Chemours Company (CC): 3.7%

11. Yamana Gold Inc. (AUY): 1.7%

F-Ranked Retirement Suitability 1. Gold Resource Corporation (GORO): 1.3%

2. Vale S.A. (VALE): 0%

3. Wheaton Precious Metals Corp (WPM): 0.9%

4. Olin Corp. (OLN): 3.1%

Communication Services A-Ranked Retirement Suitability 1. Telephone and Data Systems, Inc. (TDS): 3.6%

2. AT&T, Inc. (T): 6.9%

3. Verizon Communications Inc (VZ): 8.3%

B-Ranked Retirement Suitability 1. China Mobile Limited (CHL): 7.1%

2. Telefonica S.A (TEF): 10.7%

3. Omnicom Group, Inc. (OMC): 4.1%

4. Comcast Corp (CMCSA): 2.2%

5. TELUS Corp. (TU): 5%

6. John Wiley & Sons Inc. (JW.A): 2.8%

7. Rogers Communications Inc. (RCI): 4.1%

8. WPP plc. (WPP): 5.7%

C-Ranked Retirement Suitability 1. Shaw Communications Inc. (SJR): 7%

2. Interpublic Group of Cos., Inc. (IPG): 4.3%

3. BCE Inc (BCE): 6.5%

4. Fox Corporation (FOXA): 1.6%

D-Ranked Retirement Suitability 1. Tencent Holdings Ltd. (TCEHY): 0%

2. ViacomCBS Inc (VIAC): 2.6%

3. America Móvil S.A.B.DE C.V. (AMX): 0%

4. SK Telecom Co Ltd (SKM): 0.4%

5. RELX plc (RELX): 2.3%






43

6. Pearson plc (PSO): 2.7%

7. Vodafone Group plc (VOD): 6.1%

F-Ranked Retirement Suitability 1. Deutsche Telekom AG (DTEGY): 0%

2. Scholastic Corp. (SCHL): 2.4%

Consumer Cyclical A-Ranked Retirement Suitability 1. H&R Block Inc. (HRB): 6.4%

2. Weyco Group, Inc (WEYS): 5.7%

3. Leggett & Platt, Inc. (LEG): 3.7%

4. Genuine Parts Co. (GPC): 3.1%

5. Sonoco Products Co. (SON): 2.9%

B-Ranked Retirement Suitability 1. Polaris Inc (PII): 2.5%

2. Lowe`s Cos., Inc. (LOW): 1.4%

3. Hanesbrands Inc (HBI): 4.1%

4. Silgan Holdings Inc. (SLGN): 1.3%

5. Whirlpool Corp. (WHR): 2.7%

6. Best Buy Co. Inc. (BBY): 2.2%

7. Williams-Sonoma, Inc. (WSM): 1.9%

8. Greif Inc (GEF): 3.6%

C-Ranked Retirement Suitability 1. Home Depot, Inc. (HD): 2.2%

2. Tractor Supply Co. (TSCO): 1.1%

3. McDonald`s Corp (MCD): 2.4%

4. eBay Inc. (EBAY): 1.2%

5. AptarGroup Inc. (ATR): 1.1%

D-Ranked Retirement Suitability 1. Hasbro, Inc. (HAS): 2.9%

2. Jack In The Box, Inc. (JACK): 1.3%

3. Yum Brands Inc. (YUM): 1.8%

4. Amcor Plc (AMCR): 4%

5. Domino’s Pizza Inc (DPZ): 0.8%

6. Restaurant Brands International Inc (QSR): 4.4%

7. Advance Auto Parts Inc (AAP): 0.6%

8. WestRock Co (WRK): 2.4%

9. Foot Locker Inc (FL): 2.3%

10. General Motors Company (GM): 0.9%

11. Magna International Inc. (MGA): 2.7%

12. Kontoor Brands Inc (KTB): 2.4%

13. Starbucks Corp. (SBUX): 1.6%

14. International Paper Co. (IP): 4%

15. Gap, Inc. (GPS): 1.2%

16. VF Corp. (VFC): 2.2%

17. Tiffany & Co. (TIF): 1.8%

18. Nike, Inc. (NKE): 0.7%

19. Harley-Davidson, Inc. (HOG): 1.2%

20. Marriott International, Inc. (MAR): 0.4%

21. Honda Motor (HMC): 2%

22. Tapestry Inc (TPR): 1%

F-Ranked Retirement Suitability 1. Industria De Diseño Textil SA (IDEXY): 0%

2. Bayerische Motoren Werke AG (BMWYY): 0%

3. Cheesecake Factory Inc. (CAKE): 1%

4. TJX Companies, Inc. (TJX): 0.3%

5. Cedar Fair LP (FUN): 2.3%

6. Daimler AG (DDAIF): 0%

7. Darden Restaurants, Inc. (DRI): 1%

8. Wendy`s Co (WEN): 1.3%

9. Dunkin Brands Group Inc (DNKN): 0%

10. Dillard`s Inc. (DDS): 1%

11. Ferrari N.V. (RACE): 0.5%

12. MGM Resorts International (MGM): 0.5%

13. Wynn Resorts Ltd. (WYNN): 0.9%

Consumer Defensive A-Ranked Retirement Suitability 1. Altria Group Inc. (MO): 8.1%

2. British American Tobacco plc (BTI): 6.9%

3. Kimberly-Clark Corp. (KMB): 3.2%

4. Archer Daniels Midland Co. (ADM): 2.8%

5. Universal Corp. (UVV): 5.9%

6. Procter & Gamble Co. (PG): 2.2%

B-Ranked Retirement Suitability 1. Flowers Foods, Inc. (FLO): 3.4%

2. Kroger Co. (KR): 2.1%

3. Tyson Foods, Inc. (TSN): 2.7%

4. Campbell Soup Co. (CPB): 2.8%

5. Philip Morris International Inc (PM): 5.6%

6. Keurig Dr Pepper Inc (KDP): 2.8%

7. General Mills, Inc. (GIS): 3.3%

8. Coca-Cola Co (KO): 3.1%

9. J.M. Smucker Co. (SJM): 3%

10. Hormel Foods Corp. (HRL): 2%

11. Clorox Co. (CLX): 2.2%

12. Kellogg Co (K): 3.6%

13. Target Corp (TGT): 1.5%

14. Colgate-Palmolive Co. (CL): 2.1%

15. Walmart Inc (WMT): 1.5%

16. PepsiCo Inc. (PEP): 2.8%

17. Lancaster Colony Corp. (LANC): 1.6%

C-Ranked Retirement Suitability 1. B&G Foods, Inc (BGS): 6.9%

2. Dollar General Corp. (DG): 0.7%

3. Kraft Heinz Co (KHC): 4.7%

4. Mondelez International Inc. (MDLZ): 2.1%

5. Costco Wholesale Corp (COST): 0.7%

6. Unilever plc (UL): 3%

7. Church & Dwight Co., Inc. (CHD): 1.1%

8. Hershey Company (HSY): 2.1%

9. Diageo plc (DEO): 2.2%

10. Sysco Corp. (SYY): 1.8%

11. Tootsie Roll Industries, Inc. (TR): 0.9%

12. McCormick & Co., Inc. (MKC): 1.4%

44

13. Newell Brands Inc (NWL): 4.1%

14. Brown-Forman Corp. (BF.B): 0.9%

D-Ranked Retirement Suitability 1. Vector Group Ltd (VGR): 6.5%

2. Conagra Brands Inc (CAG): 2.5%

3. Constellation Brands Inc (STZ): 1%

F-Ranked Retirement Suitability 1. Imperial Brands plc (IMBBY): 0%

2. Nestle SA (NSRGY): 0%

3. Anheuser-Busch In Bev SA/NV (BUD): 0.8%

4. Ambev S.A. (ABEV): 0%

Energy A-Ranked Retirement Suitability 1. Energy Transfer LP (ET): 15.6%

2. Magellan Midstream Partners LP (MMP): 9.2%

3. MPLX LP (MPLX): 11.4%

4. Sunoco LP (SUN): 10.8%

5. Enbridge Inc (ENB): 7.7%

6. ONEOK Inc. (OKE): 9.1%

7. Enterprise Products Partners LP (EPD): 8.6%

8. National Fuel Gas Co. (NFG): 4.1%

B-Ranked Retirement Suitability 1. Holly Energy Partners LP (HEP): 11.5%

2. Kinder Morgan Inc (KMI): 7.2%

3. Genesis Energy LP (GEL): 15%

4. DHT Holdings Inc (DHT): 23.2%

5. Williams Cos Inc (WMB): 7.5%

6. Targa Resources Corp (TRGP): 4.3%

7. Enerplus Corporation (ERF): 3.1%

8. Vermilion Energy Inc (VET): 11.4%

C-Ranked Retirement Suitability 1. CNOOC Ltd. (CEO): 9%

2. China Petroleum & Chemical Corp (SNP): 8%

3. USA Compression Partners LP (USAC): 14.5%

4. TC Energy Corporation (TRP): 6.9%

5. TC Pipelines, LP (TCP): 8.4%

6. NACCO Industries Inc. (NC): 2.9%

7. Höegh LNG Partners LP (HMLP): 11.3%

8. Sabine Royalty Trust (SBR): 8%

9. Cross Timbers Royalty Trust (CRT): 8%

10. Pembina Pipeline Corporation (PBA): 10.4%

11. Antero Midstream Corp (AM): 13.7%

12. PermRock Royalty Trust (PRT): 4.8%

D-Ranked Retirement Suitability 1. HollyFrontier Corp (HFC): 5.4%

2. Exxon Mobil Corp. (XOM): 7.7%

3. Suncor Energy, Inc. (SU): 5.9%

4. PetroChina Co. Ltd. (PTR): 5.9%

5. Total SE (TOT): 5.2%

6. BP plc (BP): 8.2%

7. Phillips 66 (PSX): 4.9%

8. Royal Dutch Shell plc (RDS.B): 5.1%

9. Valero Energy Corp. (VLO): 6.7%

10. Chevron Corp. (CVX): 5.8%

11. Marathon Petroleum Corp (MPC): 5.4%

12. Permian Basin Royalty Trust (PBT): 6.1%

13. Conoco Phillips (COP): 4%

14. Eni Spa (E): 5.6%

15. Baker Hughes Co (BKR): 3.3%

16. Schlumberger Ltd. (SLB): 3.7%

17. Canadian Natural Resources Ltd. (CNQ): 7.8%

18. Equinor ASA (EQNR): 4%

19. Occidental Petroleum Corp. (OXY): 4.3%

20. Helmerich & Payne, Inc. (HP): 7.4%

21. Halliburton Co. (HAL): 1.5%

22. Apache Corp. (APA): 7.4%

F-Ranked Retirement Suitability 1. Inter Pipeline Ltd. (IPPLF): 0%

2. Gazprom (OGZPY): 0%

3. Imperial Oil Ltd. (IMO): 2.6%

4. Tenaris S.A. (TS): 0.8%

5. Patterson-UTI Energy Inc (PTEN): 1.6%

Financial Services A-Ranked Retirement Suitability 1. First of Long Island Corp. (FLIC): 4%

2. Unum Group (UNM): 5%

3. People`s United Financial Inc (PBCT): 4%

4. Sun Life Financial, Inc. (SLF): 4.8%

5. Bank of Nova Scotia (BNS): 8.2%

6. Community Trust Bancorp, Inc. (CTBI): 4%

7. Franklin Resources, Inc. (BEN): 4.4%

8. Royal Bank of Canada (RY): 5.1%

9. Toronto Dominion Bank (TD): 5.4%

10. Aflac Inc. (AFL): 2.6%

11. MetLife Inc (MET): 3.8%

12. Canadian Imperial Bank of Commerce (CM): 6.6%

13. Arrow Financial Corp. (AROW): 3.3%

14. Southside Bancshares Inc (SBSI): 3.9%

15. First Financial Corp. - Indiana (THFF): 2.7%

16. Tompkins Financial Corp (TMP): 2.9%

17. United Bankshares, Inc. (UBSI): 4.2%

B-Ranked Retirement Suitability 1. Old Republic International Corp. (ORI): 4.3%

2. Enterprise Bancorp, Inc. (EBTC): 2%

3. Mercury General Corp. (MCY): 4.8%

4. Navient Corp (NAVI): 6.1%

5. Prudential Financial Inc. (PRU): 5.6%

6. Prosperity Bancshares Inc. (PB): 2.7%

7. Assurant Inc (AIZ): 1.9%

8. M & T Bank Corp (MTB): 3.4%

9. Ameriprise Financial Inc (AMP): 2.2%

10. Lazard Ltd. (LAZ): 4.4%

11. SEI Investments Co. (SEIC): 1.3%

45

12. Bank of Montreal (BMO): 5.5%

13. Travelers Companies Inc. (TRV): 2.5%

14. Chubb Limited (CB): 2%

15. Bank OZK (OZK): 2.4%

16. Everest Re Group Ltd (RE): 2.7%

17. T. Rowe Price Group Inc. (TROW): 2.4%

18. Western Union Company (WU): 4%

19. Westamerica Bancorporation (WABC): 2.8%

20. Cullen Frost Bankers Inc. (CFR): 3.2%

21. BancFirst Corp. (BANF): 2.2%

22. Eaton Vance Corp. (EV): 2%

23. Cincinnati Financial Corp. (CINF): 2.8%

24. Community Bank System, Inc. (CBU): 2.6%

C-Ranked Retirement Suitability 1. Great Elm Capital Corp (GECC): 12.6%

2. Principal Financial Group Inc (PFG): 4.5%

3. Newtek Business Services Corp (NEWT): 10.3%

4. Sixth Street Specialty Lending Inc (TSLX): 7.9%

5. Farmers & Merchants Bancorp (FMCB): 0%

6. Truist Financial Corporation (TFC): 3.7%

7. Ares Capital Corp (ARCC): 9.3%

8. PennantPark Floating Rate Capital Ltd (PFLT): 10.1%

9. TriplePoint Venture Growth BDC Corp (TPVG): 10.7%

10. PSB Holdings Inc (WI) (PSBQ): 0%

11. New York Community Bancorp Inc. (NYCB): 6.2%

12. Bank Of New York Mellon Corp (BK): 2.9%

13. Gladstone Investment Corporation (GAIN): 7.9%

14. Prospect Capital Corp (PSEC): 12.2%

15. Ellington Financial Inc (EFC): 8.3%

16. Keycorp (KEY): 4.4%

17. S&P Global Inc (SPGI): 0.8%

18. Intercontinental Exchange Inc (ICE): 1.1%

19. Horizon Technology Finance Corp (HRZN): 8.7%

20. Gladstone Capital Corp. (GLAD): 8.6%

21. Blackrock Inc. (BLK): 2%

22. Huntington Bancshares, Inc. (HBAN): 4.6%

23. Moody`s Corp. (MCO): 0.8%

24. Solar Senior Capital Ltd (SUNS): 8.4%

25. RenaissanceRe Holdings Ltd (RNR): 0.9%

26. Hercules Capital Inc (HTGC): 8.8%

27. Chesapeake Financial Shares Inc (CPKF): 0%

28. FBL Financial Group, Inc. (FFG): 3.8%

29. New Mountain Finance Corp (NMFC): 12.7%

30. Stellus Capital Investment Corp (SCM): 9.6%

31. Apollo Global Management Inc (APO): 4.7%

32. Invesco Ltd (IVZ): 4.3%

33. AllianceBernstein Holding LP (AB): 8.1%

34. U.S. Bancorp. (USB): 3.6%

35. Visa Inc (V): 0.6%

36. Arthur J. Gallagher & Co. (AJG): 1.5%

37. Brown & Brown, Inc. (BRO): 0.5%

38. PacWest Bancorp (PACW): 5%

39. 1st Source Corp. (SRCE): 2.8%

40. Commerce Bancshares, Inc. (CBSH): 1.6%

41. Oxford Square Capital Corp (OXSQ): 16.8%

42. Brookfield Asset Management Inc. (BAM): 1.4%

43. Erie Indemnity Co. (ERIE): 1.6%

44. RLI Corp. (RLI): 0.9%

D-Ranked Retirement Suitability 1. Ping AN Insurance (Group) Co. of China, Ltd. (PNGAY):

0%

2. Eagle Financial Services, Inc. (EFSI): 0%

3. Morgan Stanley (MS): 2%

4. Axis Capital Holdings Ltd (AXS): 3.3%

5. Allstate Corp (The) (ALL): 2%

6. American Express Co. (AXP): 1.1%

7. Comerica, Inc. (CMA): 4.7%

8. Bank of America Corp. (BAC): 2.4%

9. Citigroup Inc (C): 3.3%

10. CNA Financial Corp. (CNA): 3.8%

11. Ally Financial Inc (ALLY): 2.1%

12. Northeast Indiana Bancorp Inc. (NIDB): 0%

13. Main Street Capital Corporation (MAIN): 7.5%

14. Synchrony Financial (SYF): 2.5%

15. National Bank of Canada (NTIOF): 0%

16. Artisan Partners Asset Management Inc (APAM): 5.4%

17. Goldman Sachs Group, Inc. (GS): 1.8%

18. JPMorgan Chase & Co. (JPM): 2.8%

19. UBS Group AG (UBS): 2.4%

20. CME Group Inc (CME): 1.9%

21. Blackstone Group Inc (The) (BX): 3%

22. UMB Financial Corp. (UMBF): 1.8%

23. Wells Fargo & Co. (WFC): 3.9%

24. Harvest Capital Credit Corp (HCAP): 5.1%

25. Morningstar Inc (MORN): 0.5%

26. HSBC Holdings plc (HSBC): 4%

27. Waddell & Reed Financial, Inc. (WDR): 3.9%

F-Ranked Retirement Suitability 1. Sampo plc (SAXPY): 0%

2. Great-West Lifeco, Inc. (GWLIF): 0%

3. Fairfax Financial Holdings Ltd. (FRFHF): 0%

4. Aon plc. (AON): 0.4%

5. Calvin b. Taylor Bankshares, Inc. (TYCB): 0%

6. Itaú Unibanco Holding S.A. (ITUB): 0.8%

7. Swiss Re Ltd (SSREY): 0%

8. Dream Office Real Estate Investment Trust (DRETF): 0%

9. Discover Financial Services (DFS): 1.4%

10. Münchener Rückversicherungs-Gesellschaft AG (MURGF):

0%

11. Aegon N. V. (AEG): 0.3%

12. Choice Properties Real Estate Investment Trust (PPRQF):

0%

13. Dream Industrial Real Estate Investment Trust (DREUF):

0%

14. Mastercard Incorporated (MA): 0.5%

15. U.S. Global Investors, Inc. (GROW): 0.5%

Healthcare A-Ranked Retirement Suitability 1. Walgreens Boots Alliance Inc (WBA): 4.4%

2. Gilead Sciences, Inc. (GILD): 4.5%

46

3. AbbVie Inc (ABBV): 4.3%

4. Cardinal Health, Inc. (CAH): 3.6%

5. Johnson & Johnson (JNJ): 2.5%

B-Ranked Retirement Suitability 1. Perrigo Company plc (PRGO): 2%

2. Bristol-Myers Squibb Co. (BMY): 3%

3. CVS Health Corp (CVS): 2.8%

4. Merck & Co Inc (MRK): 3%

5. AMGEN Inc. (AMGN): 2.8%

6. Becton, Dickinson And Co. (BDX): 1.3%

7. Amerisource Bergen Corp. (ABC): 1.7%

8. Fresenius Medical Care AG & Co. KGaA (FMS): 1.7%

9. Novartis AG (NVS): 3.3%

10. Medtronic plc (MDT): 1.9%

11. Abbott Laboratories (ABT): 1.3%

C-Ranked Retirement Suitability 1. Pfizer Inc. (PFE): 4%

2. Thermo Fisher Scientific Inc. (TMO): 0.2%

3. GlaxoSmithKline plc (GSK): 5.3%

4. Sanofi (SNY): 3.5%

5. Mckesson Corporation (MCK): 0.9%

6. UnitedHealth Group Inc (UNH): 1.4%

7. Stryker Corp. (SYK): 1%

8. Patterson Companies Inc. (PDCO): 3.4%

9. Lilly (Eli) & Co (LLY): 1.8%

10. West Pharmaceutical Services, Inc. (WST): 0.2%

D-Ranked Retirement Suitability 1. Bayer AG (BAYRY): 0%

2. Novo Nordisk (NVO): 1.8%

3. Koninklijke Philips N.V. (PHG): 1.7%

4. ResMed Inc. (RMD): 0.7%

5. Owens & Minor, Inc. (OMI): 0%

6. AstraZeneca plc (AZN): 2.7%

F-Ranked Retirement Suitability 1. Sienna Senior Living, Inc. (LWSCF): 0%

Industrials A-Ranked Retirement Suitability 1. General Dynamics Corp. (GD): 2.9%

2. Matthews International Corp. (MATW): 2.9%

3. 3M Co. (MMM): 3.4%

4. Emerson Electric Co. (EMR): 2.5%

B-Ranked Retirement Suitability 1. SFL Corporation Ltd (SFL): 15.1%

2. Lockheed Martin Corp. (LMT): 2.8%

3. Northrop Grumman Corp. (NOC): 1.9%

4. Huntington Ingalls Industries Inc (HII): 2.5%

5. L3Harris Technologies Inc (LHX): 1.9%

6. KNOT Offshore Partners LP (KNOP): 13%

7. ABM Industries Inc. (ABM): 1.4%

8. Raytheon Technologies Corporation (RTX): 3.1%

9. Tennant Co. (TNC): 1.3%

10. Donaldson Co. Inc. (DCI): 1.5%

11. Carlisle Companies Inc. (CSL): 1.3%

12. Gorman-Rupp Co. (GRC): 1.8%

13. McGrath RentCorp (MGRC): 2.4%

14. Snap-on, Inc. (SNA): 2.7%

15. Automatic Data Processing Inc. (ADP): 2.2%

16. Brady Corp. (BRC): 1.6%

17. Pentair plc (PNR): 1.5%

18. Stanley Black & Decker Inc (SWK): 1.6%

19. Parker-Hannifin Corp. (PH): 1.3%

20. Dover Corp. (DOV): 1.6%

21. Illinois Tool Works, Inc. (ITW): 2.2%

22. W.W. Grainger Inc. (GWW): 1.5%

23. MSA Safety Inc (MSA): 1.1%

C-Ranked Retirement Suitability 1. FedEx Corp (FDX): 1%

2. Icahn Enterprises LP (IEP): 10.3%

3. Republic Services, Inc. (RSG): 1.8%

4. Ritchie Bros Auctioneers Inc (RBA): 1.5%

5. Cummins Inc. (CMI): 2.4%

6. MSC Industrial Direct Co., Inc. (MSM): 2.6%

7. Booz Allen Hamilton Holding Corp (BAH): 1.4%

8. United Parcel Service, Inc. (UPS): 2.5%

9. Roper Technologies Inc (ROP): 0.5%

10. CSX Corp. (CSX): 1.2%

11. A.O. Smith Corp. (AOS): 1.8%

12. Expeditors International of Washington, Inc. (EXPD): 1.1%

13. Caterpillar Inc. (CAT): 2.2%

14. Canadian Pacific Railway Ltd (CP): 1%

15. Norfolk Southern Corp. (NSC): 1.6%

16. C.H. Robinson Worldwide, Inc. (CHRW): 2.2%

17. Waste Management, Inc. (WM): 1.9%

18. Fastenal Co. (FAST): 2%

19. HNI Corp. (HNI): 3.5%

20. Union Pacific Corp. (UNP): 1.9%

21. Canadian National Railway Co. (CNI): 1.2%

22. Franklin Electric Co., Inc. (FELE): 0.9%

23. Rockwell Automation Inc (ROK): 1.7%

24. Honeywell International Inc (HON): 1.7%

25. Cintas Corporation (CTAS): 0.8%

26. Otis Worldwide Corp (OTIS): 0.9%

27. Deere & Co. (DE): 1.1%

28. Nordson Corp. (NDSN): 0.8%

29. Textron Inc. (TXT): 0.2%

30. Carrier Global Corp (CARR): 0.7%

D-Ranked Retirement Suitability 1. Johnson Controls International plc (JCI): 2.2%

2. Compass Diversified Holdings (CODI): 5.3%

3. Toro Co. (TTC): 1.1%

4. Oshkosh Corp (OSK): 1.4%

5. Nielsen Holdings plc (NLSN): 1.2%

6. Paychex Inc. (PAYX): 2.7%

7. Paccar Inc. (PCAR): 1.8%

8. Lincoln Electric Holdings, Inc. (LECO): 1.3%

47

9. Covanta Holding Corporation (CVA): 3.7%

10. Xylem Inc (XYL): 1%

11. ABB Ltd. (ABB): 2.9%

12. Trane Technologies plc (TT): 1.4%

13. Thomson-Reuters Corp (TRI): 2%

14. Eaton Corporation plc (ETN): 2.4%

15. Badger Meter Inc. (BMI): 0.8%

F-Ranked Retirement Suitability 1. Exchange Income Corp. (EIFZF): 0%

2. Collectors Universe Inc (CLCT): 0.9%

3. Chorus Aviation, Inc. (CHRRF): 0%

4. Siemens AG (SIEGY): 0%

5. Kansas City Southern (KSU): 0.8%

6. Ryder System, Inc. (R): 2.6%

7. General Electric Co. (GE): 0.4%

Real Estate A-Ranked Retirement Suitability 1. Federal Realty Investment Trust (FRT): 5%

2. National Retail Properties Inc (NNN): 5.2%

3. Macerich Co. (MAC): 10.1%

B-Ranked Retirement Suitability 1. Preferred Apartment Communities Inc (APTS): 10.4%

2. Office Properties Income Trust (OPI): 9.4%

3. Geo Group, Inc. (GEO): 19.3%

4. Chimera Investment Corp (CIM): 13.6%

5. Iron Mountain Inc. (IRM): 8.3%

6. CyrusOne Inc (CONE): 2.9%

7. Realty Income Corp. (O): 4.6%

8. Simon Property Group, Inc. (SPG): 7%

9. AvalonBay Communities Inc. (AVB): 4%

10. AGNC Investment Corp (AGNC): 9.8%

11. Service Properties Trust (SVC): 5%

12. W. P. Carey Inc (WPC): 6%

13. Whitestone REIT (WSR): 6.8%

14. Easterly Government Properties Inc (DEA): 4.6%

15. Physicians Realty Trust (DOC): 5.3%

16. Universal Health Realty Income Trust (UHT): 4.2%

17. Digital Realty Trust Inc (DLR): 3.3%

18. Tanger Factory Outlet Centers, Inc. (SKT): 6.9%

19. Diversified Healthcare Trust (DHC): 4.4%

20. CorEnergy Infrastructure Trust Inc (CORR): 12.7%

C-Ranked Retirement Suitability 1. SL Green Realty Corp. (SLG): 4.1%

2. Boston Properties, Inc. (BXP): 4.3%

3. LTC Properties, Inc. (LTC): 5.8%

4. Omega Healthcare Investors, Inc. (OHI): 7.2%

5. Healthcare Trust of America Inc (HTA): 4.7%

6. Two Harbors Investment Corp (TWO): 7.9%

7. MGM Growth Properties LLC (MGP): 6.1%

8. Landmark Infrastructure Partners LP (LMRK): 8%

9. New Residential Investment Corp (NRZ): 5.2%

10. STAG Industrial Inc (STAG): 4.7%

11. Starwood Property Trust Inc (STWD): 10%

12. Blackstone Mortgage Trust Inc (BXMT): 9.2%

13. Annaly Capital Management Inc (NLY): 10.6%

14. Spirit Realty Capital Inc (SRC): 6.5%

15. Sabra Healthcare REIT Inc (SBRA): 7.6%

16. Orchid Island Capital Inc (ORC): 14.6%

17. Brookfield Property Partners LP (BPY): 9.5%

18. Medical Properties Trust Inc (MPW): 5.1%

19. Global Net Lease Inc (GNL): 7.4%

20. Essex Property Trust, Inc. (ESS): 3.6%

21. Public Storage (PSA): 3.6%

22. Gladstone Commercial Corp (GOOD): 8.1%

23. Crown Castle International Corp (CCI): 3.1%

24. Gladstone Land Corp (LAND): 4.5%

25. ARMOUR Residential REIT Inc (ARR): 10.7%

26. CoreSite Realty Corporation (COR): 4%

27. Broadmark Realty Capital Inc (BRMK): 7.5%

28. Apollo Commercial Real Estate Finance Inc (ARI): 12.6%

29. American Tower Corp. (AMT): 2%

30. Dynex Capital, Inc. (DX): 9.1%

31. Ladder Capital Corp (LADR): 9.5%

32. Urstadt Biddle Properties, Inc. (UBA): 4.4%

33. Ventas Inc (VTR): 4.4%

34. Arbor Realty Trust Inc. (ABR): 8.5%

35. Kimco Realty Corp. (KIM): 3.7%

36. VEREIT Inc (VER): 5%

D-Ranked Retirement Suitability 1. Innovative Industrial Properties Inc (IIPR): 2.5%

2. Prologis Inc (PLD): 2.4%

3. Brixmor Property Group Inc (BRX): 3.2%

4. Store Capital Corp (STOR): 4.3%

5. New York Mortgage Trust Inc (NYMT): 6.1%

6. Camden Property Trust (CPT): 3.4%

7. Equity Residential Properties Trust (EQR): 4.2%

8. Healthpeak Properties Inc (PEAK): 5%

9. Alexandria Real Estate Equities Inc. (ARE): 2.5%

10. Gaming and Leisure Properties Inc (GLPI): 3.4%

11. Weyerhaeuser Co. (WY): 1.5%

12. Lamar Advertising Co (LAMR): 3%

13. Summit Hotel Properties Inc (INN): 2%

14. Hannon Armstrong Sustainable Infrastructure capital Inc

(HASI): 2.1%

15. Welltower Inc (WELL): 4.3%

F-Ranked Retirement Suitability 1. Chatham Lodging Trust (CLDT): 2.1%

Technology A-Ranked Retirement Suitability 1. International Business Machines Corp. (IBM): 5.1%

B-Ranked Retirement Suitability 1. Intel Corp. (INTC): 2.6%

2. Cisco Systems, Inc. (CSCO): 3.2%

48

3. Oracle Corp. (ORCL): 1.5%

C-Ranked Retirement Suitability 1. Hewlett Packard Enterprise Co (HPE): 4%

2. HP Inc (HPQ): 2.9%

3. Sap SE (SAP): 1.3%

4. Applied Materials Inc. (AMAT): 1%

5. Seagate Technology plc (STX): 4.3%

6. Qualcomm, Inc. (QCOM): 1.7%

7. Microsoft Corporation (MSFT): 1%

8. Jack Henry & Associates, Inc. (JKHY): 1.1%

9. Skyworks Solutions, Inc. (SWKS): 1.5%

10. Computer Services, Inc. (CSVI): 0%

11. Infosys Ltd (INFY): 1.6%

D-Ranked Retirement Suitability 1. Lam Research Corp. (LRCX): 1%

2. Broadcom Inc (AVGO): 3.1%

3. Intuit Inc (INTU): 0.6%

4. NetApp Inc (NTAP): 2.2%

5. Telefonaktiebolaget L M Ericsson (ERIC): 1.3%

6. Logitech International SA (LOGI): 0.8%

7. Cognizant Technology Solutions Corp. (CTSH): 1.1%

8. KLA Corp. (KLAC): 1.3%

9. Garmin Ltd (GRMN): 2%

10. Texas Instruments Inc. (TXN): 2.3%

11. Xerox Holdings Corp (XRX): 4.3%

12. Corning, Inc. (GLW): 2.4%

13. Accenture plc (ACN): 1.3%

14. NVIDIA Corp (NVDA): 0.1%

15. Apple Inc (AAPL): 0.6%

16. Sony Corp. (SNE): 0.5%

17. Kulicke & Soffa Industries, Inc. (KLIC): 1.5%

F-Ranked Retirement Suitability 1. ASML Holding NV (ASML): 0.6%

2. Canon Inc (CAJ): 2%

3. Marvell Technology Group Ltd (MRVL): 0.5%

4. Taiwan Semiconductor Manufacturing (TSM): 1.5%

Utilities A-Ranked Retirement Suitability 1. UGI Corp. (UGI): 3.7%

2. Black Hills Corporation (BKH): 3.6%

3. Northwest Natural Holding Co (NWN): 4.3%

4. Fortis Inc. (FTS): 4.2%

5. Consolidated Edison, Inc. (ED): 4.3%

6. PPL Corp (PPL): 5.9%

B-Ranked Retirement Suitability 1. Suburban Propane Partners LP (SPH): 11.8%

2. New Jersey Resources Corporation (NJR): 3.8%

3. Sempra Energy (SRE): 3.3%

4. Brookfield Infrastructure Partners L.P (BIP): 3.9%

5. Atmos Energy Corp. (ATO): 2.5%

6. Otter Tail Corporation (OTTR): 3.5%

7. DTE Energy Co. (DTE): 3.4%

8. Alliant Energy Corp. (LNT): 3%

9. Edison International (EIX): 4.2%

10. Duke Energy Corp. (DUK): 4.2%

11. Southern Company (SO): 4.2%

12. American Electric Power Company Inc. (AEP): 3.4%

13. Entergy Corp. (ETR): 3.8%

14. Artesian Resources Corp. (ARTNA): 2.7%

15. Public Service Enterprise Group Inc. (PEG): 3.5%

16. NextEra Energy Partners LP (NEP): 3.2%

17. SJW Group (SJW): 1.8%

18. American States Water Co. (AWR): 1.6%

19. MGE Energy, Inc. (MGEE): 2.1%

20. California Water Service Group (CWT): 1.6%

21. Middlesex Water Co. (MSEX): 1.5%

C-Ranked Retirement Suitability 1. FirstEnergy Corp. (FE): 5.1%

2. Exelon Corp. (EXC): 3.7%

3. Spark Energy Inc (SPKE): 7.3%

4. Brookfield Renewable Partners LP (BEP): 2.7%

5. WEC Energy Group Inc (WEC): 2.8%

6. Xcel Energy, Inc. (XEL): 2.6%

7. Essential Utilities Inc (WTRG): 2.1%

8. NextEra Energy Inc (NEE): 1.9%

D-Ranked Retirement Suitability 1. Consolidated Water Co. Ltd. (CWCO): 2.6%

2. Dominion Energy Inc (D): 4.7%

3. Red Eléctrica Corporación S.A. (RDEIY): 0%

4. CenterPoint Energy Inc. (CNP): 3.4%

5. Algonquin Power & Utilities Corp (AQN): 3.4%

F-Ranked Retirement Suitability 1. Canadian Utilities Ltd. (CDUAF): 0%

2. Superior Plus Corp. (SUUIF): 0%

3. Global Water Resources Inc (GWRS): 2%

4. TransAlta Renewables, Inc. (TRSWF): 0%

49

This information is not personalized advice. It is for informational purposes only. Please see disclaimer at end of newsletter for more.

Sell Rules, Past Recommendations, Pending Sells, & Past Sells

Sell Rules Except in extreme circumstances, we will not issue sell recommendations – even if

the sell rules below are triggered – unless a security has been held for 1 year or

longer to qualify for lower long-term capital gains tax rates in taxable accounts.

Sell Rule #1 | Dividend-Based Sell Rules: Any past recommendation that

reduces or eliminates its dividend is automatically a pending sell. We review and

analyze these securities to determine when to initiate the final sale.

Secondly, any past recommendation that has an “F” Dividend Risk Score is

automatically reviewed for safety and a sell may be issued. We will only

recommend selling up to two securities a month so that the reinvestment of sale

proceeds is not concentrated in a short time frame.

Sell Rule #2 | Valuation-Based Sell Rules: Sell past recommendations with

expected total returns below the expected total returns of the greater of either the

S&P 500 over the next several years or the yield on the 20-year T-Bond. We

calculate our estimate of the long-term returns of the S&P 500 as the S&P 500’s

dividend yield plus nominal (not inflation-adjusted) GDP growth, less valuation

multiple mean reversion over 10 years.

We calculate our estimate of the long-term returns of the S&P 500 using the

simplified expected total returns method, which is the S&P 500’s dividend yield

plus nominal (not inflation-adjusted) GDP growth less valuation multiple mean

reversion over 10 years.

We currently estimate long-term U.S. nominal GDP growth at 5.5%, the S&P

500’s dividend yield at 1.5%, and valuation multiple mean reversion at -8.5%

(S&P 500 fair value P/E of 15.88 versus current P/E of 38.50) for an expected total

returns sell threshold of -1.4%. The 20-year T-Bond currently has a yield of 1.6%,

so our expected total returns sell threshold is 1.6%.

This expected total returns calculation uses the ‘approximate’ total return method

of simply adding expected total returns from dividend yield, growth rate, and

valuation multiple change.

Past recommendations at or below this sell threshold are in red in the Unsold Past

Recommendations table below. We will only recommend up to two valuation-

based sells a month; and fewer if there are sells based on the first sell rule.

50


Unsold Past Recommendations6

Name Ticker Time Since 1st Rec. (Years)

DR Score

5-Year Expected

Total Returns

CAGR7 Total

Return

S&P 500 (SPY) Total

Return

Omega Healthcare OHI 4.2 D 9.1% 12.8% 65.1% 90.1%

Enterprise Product EPD 4.2 B 10.4% 2.8% 12.2% 90.1%

AT&T T 4.2 B 12.1% 0.6% 2.4% 90.1%

Magellan Midstream MMP 4.2 C 14.5% -3.1% -12.1% 90.1%

Sunoco SUN 3.7 C 13.6% 10.2% 42.9% 67.3%

ONEOK OKE 3.0 C 12.8% -4.6% -13.0% 44.2%

Altria MO 2.7 B 11.9% -3.3% -8.5% 44.2%

STAG Industrial STAG 2.2 D 8.2% 13.2% 31.9% 42.1%

Verizon VZ 2.2 B 9.1% 8.7% 20.3% 42.1%

Leggett & Platt LEG 2.2 B 4.9% 14.3% 33.3% 43.1%

AbbVie ABBV 2.2 A 8.4% 13.5% 31.3% 43.1%

People's United PBCT 2.2 B 9.3% -0.6% -1.3% 43.1%

General Mills GIS 2.2 C 7.1% -2.0% -4.2% 43.1%

IBM IBM 2.2 B 7.0% -18.8% -36.2% 43.1%

Cardinal Health CAH 2.0 A 7.2% 12.4% 26.0% 50.6%

Newell Brands NWL 2.0 D -0.2% 11.8% 24.9% 50.6%

Hanesbrands HBI 2.0 B 8.5% 7.6% 15.6% 50.6%

MSC Industrial Direct MSM 1.1 C 4.8% 30.9% 33.8% 21.8%

Chevron CVX 0.9 F 8.3% N/A -13.6% 13.7%

United Parcel Service UPS 0.8 B 4.2% N/A 89.0% 38.8%

Polaris PII 0.7 A 9.8% N/A 99.4% 37.2%

Bank OZK OZK 0.7 B 3.2% N/A 96.3% 37.2%

Franklin Resources BEN 0.7 A 7.4% N/A 64.8% 37.2%

National Fuel Gas NFG 0.7 A 10.5% N/A 18.3% 37.2%

Genuine Parts GPC 0.7 A 4.7% N/A 3.9% 37.2%

Walgreens Boots WBA 0.7 A 11.0% N/A 1.0% 37.2%

Weyco WEYS 0.7 C 5.1% N/A -5.3% 37.2%

Federal Realty FRT 0.7 B 11.0% N/A 103.6% 29.3%

Unum Group UNM 0.7 A 10.5% N/A 65.6% 29.3%

Archer-Daniels-Mid. ADM 0.7 A 6.5% N/A 53.2% 29.3%

Mercury General MCY 0.6 C 10.8% N/A 32.7% 23.2%

Old Republic ORI 0.6 C 12.0% N/A 26.9% 23.2%

Philip Morris PM 0.6 C 7.5% N/A 19.6% 23.2%

British American Tob. BTI 0.6 C 11.5% N/A 3.8% 23.2%

6 This does not include our past “special recommendations” which aren’t part of the regular Sure Retirement.

Newsletter strategy. Total returns data is from morning 1/7/21 and Sure Analysis Research data is from 1/7/21. 7 Compound annual growth rate (CAGR) is only available for past recommendations with 1+ year holding periods.

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Realty Income O 0.6 C 9.2% N/A -2.1% 23.2%

M&T Bank MTB 0.5 B 6.2% N/A 40.3% 19.6%

Edison International EIX 0.3 B 7.4% N/A 24.1% 11.3%

John Wiley & Sons JW.A 0.2 B 3.6% N/A 11.9% 5.8%

Gilead Sciences GILD 0.1 B 11.7% N/A -2.0% 2.9%

H&R Block HRB 0.0 B 11.1% N/A N/A N/A

Sold Positions Name Ticker 1st Rec. Date Sell Date

Total Return

S&P 500 (SPY) Total Return

Waddell & Reed Financial WDR 11/7/2016 11/6/2017 34.4% 23.9%

Gladstone Financial GAIN 2/6/2017 7/9/2018 49.7% 24.8%

R.R. Donnelley & Sons RRD 6/11/2018 8/13/2018 -28.2% 1.7%

Vector Group VGR 8/7/2017 12/10/2018 -35.1% 9.0%

New Residential NRZ 10/15/2018 12/10/2018 -7.7% -3.8%

Spectra Energy SEP 11/7/2016 1/14/2019 9.6% 26.2%

Holly Energy HEP 12/5/2016 1/14/2019 6.9% 21.7%

Welltower WELL 1/8/2018 2/11/2019 31.1% 0.7%

W.P. Carey WPC 2/6/2017 3/11/2019 37.7% 26.4%

Senior Housing Properties SNH 2/5/2018 3/11/2019 -16.0% 7.5%

TC PipeLines TCP 12/5/2016 4/15/2019 -16.5% 37.7%

AmeriGas Partners APU 1/3/2017 4/15/2019 -8.3% 34.3%

Buckeye Partners BPL 11/7/2016 5/13/2019 -17.7% 38.3%

Owens & Minor OMI 11/6/2017 9/9/2019 -58.8% 19.1%

Urstadt Biddle UBA 11/7/2016 10/14/2019 31.2% 47.1%

Western Union WU 10/15/2018 11/11/2019 55.8% 17.1%

Target TGT 11/6/2017 12/9/2019 129.8% 25.9%

Qualcomm QCOM 12/10/2018 1/13/2020 64.8% 27.3%

Western Digital WDC 2/11/2019 2/12/2020 59.3% 27.0%

L Brands LB 8/13/2018 3/9/2020 -26.2% 0.1%

WestRock WRK 2/11/2019 11/9/20 15.4% 35.4

Average sold position total return: 14.9%

S&P 500 (SPY) average position total return: 21.2%

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Pending Sells

Name & Ticker Recommend Date Total Return8

Genesis Energy (GEL) November 2016 -69.1%

Energy Transfer (ET) November 2016 -31.8%

Macy’s (M) May 2017 -45.0%

Kohl’s (KSS) May 2017 26.8%

Occidental Petroleum (OXY) June 2017 -58.5%

Suburban Propane (SPH) July 2017 -12.3%

Royal Dutch Shell (RDS.B) July 2017 -14.0%

Invesco (IVZ) May 2018 -24.2%

Kraft Heinz (KHC) October 2018 -29.9%

Foot Locker (FL) November 2018 -7.6%

Tanger Factory Outlet (SKT) April 2019 -36.0%

Eaton Vance (EV) April 2020 138.1%

We will initiate final sell recommendations for all of the above pending sells based on

valuation, momentum, and holding period. We are not issuing sell prices for our pending

sells at this time. We are reviewing with every newsletter for the final sell

recommendation.

8 Total returns start with the market close price of the first trading day after the newsletter recommendation. Prior to

March 2018, this was the first trading day after the first Sunday of the month. As of March 2018, and later, this is

generally the first trading day after the second Sunday of the month. Closing price data is from morning 1/7/21.

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Buying & Ranking Criteria

The method we use to come up with the Top 10 buys for The Sure Retirement

Newsletter is as follows:

Note: Ranking data is from the most recent Wednesday’s Sure Analysis data update.

1. Filter our Sure Analysis Research Database universe of securities for:

- 10%+ Expected Total Returns

- Dividend Yield of 4%+

- Retirement Suitability Score of A

- Dividend Risk Score of A

- U.S. securities only

- Qualitative dividend safety check

2. Sort by Expected Total Returns (highest first)

3. If fewer than 10 securities, allow “B” ranked Dividend Risk Score securities. If

there are still fewer than 10 securities, allow “C” ranked Dividend Risk Score

securities. If still fewer than 10 securities, allow “B” ranked Retirement

Suitability Score securities.

4. No more than 3 REITs and 3 MLPs in each newsletter

5. Veto any securities from the Top 10 as necessary after qualitative analysis

6. The Top 10 are the 10 highest Expected Total Returns securities from steps 1

through 4 above

Dividend Risk Scores are sorted into quintiles (A is top 20%, B is top 40%, C is top 60%,

and so on) based on the formula below:

Dividend Risk Score (Raw) = Payout Ratio x 100 – # Years of Steady or Rising

Dividends + 50 if deemed risky during a recession

Only the top 10% of securities in our Sure Analysis Research Database receive an “A”

Retirement Suitability Score. “B” ranked securities are the next 25% of securities. The

Retirement Suitability Score uses the following formula:

Retirement Suitability Score (Raw) = (1 – Dividend Risk Score Percentile) + Dividend

Yield Percentile

Our formula for Expected Total Returns is based on our expected growth returns,

valuation returns, and dividend returns.

The combination of a high Retirement Suitability Score with high Expected Total Returns

means The Sure Retirement Newsletter looks for high-yielding securities with strong total

returns potential and good or better safety scores. Note that our Expected Total Returns

are based on the idea that the economy will continue forward ‘as is’ for the foreseeable

future, and not hit a recession. Recession safety factors into our Dividend Risk Scores,

and in turn our rankings for The Sure Retirement Newsletter.

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Portfolio Building Guide

The process of building a high-yield dividend portfolio is straightforward: Each month invest

in the top-ranked security in which you own the smallest dollar amount out of the Top 10.

Over time, you will build a well-diversified portfolio of quality businesses purchased when they

yield 4% or more. If your portfolio has 25% or more allocated to one sector, buy the highest

ranked security not in that sector. Alternatively, the Top 10 list is also useful as an idea

generation tool for those with a different portfolio allocation plan.

Examples Portfolio 1 Portfolio 2

Ticker Name Amount Ticker Name Amount

UNM Unum $ 1,002 UNM Unum $ 4,374

NFG National Fuel Gas $ - NFG National Fuel Gas $ 4,878

WBA Walgreens $ - WBA Walgreens $ 5,374

T AT&T $ - T AT&T $ 4,353

MO Altria $ - MO Altria $ 7,312

HRB H&R Block $ - HRB H&R Block $ 2,799

GILD Gilead $ - GILD Gilead $ 2,952

FRT Federal Realty $ - FRT Federal Realty $ 6,660

EPD Enterprise Products $ - EPD Enterprise Products $ 2,367

PBCT People’s United $ - PBCT People’s United $ 2,818

- If you had portfolio 1, you would buy NFG, the top-ranked security you own least.

- If you had portfolio 2, you would buy EPD, the top-ranked security you own least.

If you have an existing portfolio or a large lump sum to invest, switch over to the Sure

Retirement Strategy over 20 months. Each month take 1/20 of your initial portfolio value and

buy the top-ranked security you own the least out of the Top 10 (if that sector makes up less than

25% of your portfolio). When you sell a security, use the proceeds to purchase the top-ranked

security you own the least.

This simple investing process will build a diversified portfolio of high-quality dividend or

distribution securities over a period of less than 2 years. There’s nothing magical about 20

months. A period of 15 months or 30 months will yield similar results.

If your portfolio grows too large to manage comfortably (for example, you are not comfortable

holding 40+ securities – which would happen after around 4 years of the Sure Dividend System),

you will need to sell holdings. We recommend eliminating positions that have the lowest yields.

You can combine recommendations from The Sure Retirement and Sure Dividend Newsletters by

targeting a specific yield for your overall portfolio. When you need your portfolio yield to

increase, invest from The Sure Retirement Newsletter. If less yield is required (and growth is

preferred), invest from The Sure Dividend Newsletter. The Sure Analysis Research Database

can also be used to supplement the newsletters.

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Tax Guide There are 4 broad types of investment vehicles covered in The Sure Retirement Newsletter:

1. Corporations

2. Master Limited Partnerships (MLPs)

3. Real Estate Investment Trusts (REITs)

4. Business Development Companies (BDCs)

The organization form is important for tax purposes because it determines how efficiently a

company can return money to unit or shareholders. An example is below.

Imagine a company makes $10, pre-tax, and distributes 100% to investors. The image below

shows how much of the $10 would go to investors using standard assumptions for the three

investment vehicles:

Notes: Tax treatment for BDCs and REITs is similar. BDCs have been omitted from the

images below because of this. The image below takes into account the pass-through entity

tax breaks from Trump’s Tax Act, which will expire in 2025. The tables below assume that

80% of MLP distributions are returns of capital, and 20% are ordinary income. It assumes

that 70% of REIT payments are ordinary income; and capital gains and return of capital

each make up 15% of REIT payments.

• $6.32 in after-tax income from a Corporation

• $7.45 in after-tax income from a REIT

• $8.13 in after-tax income from an MLP

The image below gives an overview of the different organizational forms:

https://www.forbes.com/sites/baldwin/2018/02/14/2018-tax-guide-to-mlps/#430e16cc400b

https://www.forbes.com/sites/baldwin/2018/02/14/2018-tax-guide-to-mlps/#430e16cc400b

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Corporations Corporations are taxed on income at the corporate level. They then pay out this after-tax

income to shareholders. Shareholders are then taxed again at the individual level.

Note: The United States corporate tax rate (including the state and federal levels) is 26%

after the Tax Cuts and Jobs Act. The global average is 23%, for comparison.

Corporations issue a 1099 to track dividend payments to shareholders. They are the simplest

and most common type of investment. They are also the least tax advantaged.

Given the choice, corporations should be held in a retirement account to minimize taxes. Of

course, owning them in a taxable account is fine, one will just be paying taxes on dividends

received. Capital gains taxes are only triggered when a common stock is sold, making it tax

advantageous to buy and hold.

Capital gains taxes are divided into two types: short-term and long-term. Short-term capital

gains tax applies to investments held for less than a year. The short-term capital gains rate is

your ordinary income tax rate. It ranges between 10% and 37% depending on your income

bracket.

Long-term capital gains apply to most types of investments (including Corporations, REITs,

and MLPs) held longer than 1 year. The maximum long-term capital gains tax rate is 20%.

The minimum is 0%. Most investors will fall into the 15% long-term capital gains tax

bracket.

Dividend taxes are also divided into two types: ordinary and qualified. Most dividends paid

from blue-chip dividend stocks are ‘qualified.’ The requirements for a dividend to be

classified as ‘qualified’ are below:

• The company must be a U.S. corporation, or a foreign corporation that readily trades

on major U.S. exchanges, or be incorporated in a U.S. territory.

• The investor must have held the stock for 60+ days before the ex-dividend date.

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Qualified dividends are taxed at the same rate as long-term capital gains; between 0% and

20% (though most investors will be in the 15% bracket). Ordinary dividends are dividends

that do not meet the criteria to be ‘qualified.’ Ordinary dividends are taxed at the ordinary

income tax rate.

Master Limited Partnerships (MLPs) MLPs are the most tax efficient vehicle for returning money to investors. They avoid the

double taxation issues of Corporations. MLPs are not taxed at the organization level.

Unfortunately, MLPs are also the most complicated.

Typically, somewhere around 80% to 90% of MLP distributions are considered a ‘return

of capital’ because of depreciation. You don’t pay taxes immediately on ‘return of

capital’ distributions.

Returns of capital reduce your cost basis in the MLP. You are not taxed until you sell the

units.

For example, imagine you buy 10 units of an MLP at $100 a unit for a total investment of

$1,000. Now imagine you hold for 5 years.

The MLP unit price has increased to $120. Your investment is now worth $1,200. It also

paid out $37.50 per unit in distributions over this time, with 80% of that being a return of

capital ($37.50 x 80% = $30 return of capital).

The 20% of distributions that were not returns of capital would be taxed at your ordinary

income tax rate, which is up to 37%. These taxes would be due the year they are accrued.

Your cost basis would be $700 (initial investment amount of $1,000 less return of capital

of $30 per unit or $300 total). The amount of long-term capital gains tax you owe

(assuming you are in the 20% tax bracket) is $100.

Math Behind Example: Sale price of $1,200 less cost basis of $700 = $500 in capital

gains. $500 in capital gains x 20% tax bracket = $100.

As a caveat, if the cost basis ever falls below 0 (which will only happen after holding for

around a decade or more), you will owe long-term capital gains tax on the amount the

cost basis is below 0 every year.

Return of capital and other issues discussed above do not matter when MLPs are held in a

retirement account.

There is a different issue with holding MLPs in a retirement account, however. This

includes 401(k), IRA, and Roth IRA accounts, among others.

When retirement plans conduct or invest in a business activity, they must file separate tax

forms to report Unrelated Business Income (UBI) and may owe tax on Unrelated

Business Taxable Income (UBTI). UBTI tax brackets go up to 37% (the top personal

rate).

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MLPs issue K-1 forms for tax reporting. K-1s report business income, expense, and loss

to owners. Therefore, MLPs held in retirement accounts may still qualify to pay taxes.

If UBI for all holdings in your retirement account is over $1,000, you must have your

retirement account provider (typically, your brokerage) file Form 990-T. You will want

to file form 990-T as well if you have a UBI loss to get a loss carryforward for

subsequent tax years. Failure to file form 990-T and pay Unrelated Business Income Tax

(UBIT) can lead to severe penalties. Fortunately, UBIs are often negative. It is a fairly

rare occurrence to owe taxes on UBI.

The subject of MLP taxation can be complicated and confusing. Hiring a tax

professional to aid in preparing taxes is a viable option for dealing with the complexity.

The bottom line is this: MLPs are tax-advantaged vehicles that are suited for investors

looking for current income. It is fine to hold them in either taxable or non-taxable

(retirement) accounts. Since retirement accounts are already tax-deferred, holding MLPs

in taxable accounts allows you to ‘get credit’ for the full effects of their unique structure.

Real Estate Investment Trusts (REITs) Like MLPs, REITs avoid double taxation. REITs are not taxed at the organization level.

REITs are in between MLPs and Corporations in terms of both complexity and tax-

advantages. REITs are required to pay out 90%+ of their income.

REITs are organized as trusts. As a result, ‘shareholders’ are actually unit holders.

REITs issue 1099 forms (just like corporations) instead of K-1 forms (like MLPs do).

Unit holders receive distributions, not dividends (just like MLPs). REIT distributions fall

into three categories:

• Ordinary income

• Return of capital

• Capital gains

Ordinary income is taxed at your ordinary income tax rate; up to 37%. Return of capital

reduces your cost basis (just as it does with MLPs). Capital gains are taxed at either

short-term or long-term capital gains rates.

The percentage of distributions from these three sources varies by REIT. In general,

ordinary income tends to be the majority of the distribution. Expect around 70% of

distributions as ordinary income, 15% as a return of capital, and 15% as capital gains.

REITs are best suited for retirement accounts because the majority of their payments are

taxed as ordinary income. Retirement accounts remove this negative and make REITs

very tax advantageous.

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This doesn’t mean you should never own a REIT in a taxable account. A good

investment is a good investment, regardless of tax issues. If you have the choice, REITs

should definitely be placed in a retirement account such as an IRA or 401k.

Business Development Companies (BDCs) Much like REITs, business development companies must pay out 90%+ of their income

as distributions. Additionally, business development companies must derive 90% of their

gross income from interest, dividends, or capital gains on securities.

BDCs pay their distributions as a mix of:

• Ordinary income & non-qualified dividends

• Qualified dividends

• Return of capital

• Capital gains

Just as with MLPs, returns of capital reduce your tax basis. Qualified dividends and

long-term capital gains are taxed at lower rates, while ordinary income and non-qualified

dividends are taxed at your personal income tax bracket rate.

Unfortunately, 70% to 80% of BDC income is typically derived from ordinary income.

Because of this, they make excellent vehicles for tax-advantaged retirement accounts

such as an IRA or 401k.

Please email us at [email protected] with any questions you have on taxes

regarding retirement accounts, MLPs, REITs, and BDCs. Frequently asked questions

will be added to this tax guide.

As a newsletter provider, we can’t provide specific personal investment advice, only

general information.

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Disclaimer

Nothing presented herein is, or is intended to constitute, specific investment advice. Nothing in this newsletter should be construed as a recommendation to follow any investment strategy or allocation. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements

or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While Sure Dividend has used reasonable efforts

to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein. No guarantee of investment performance is being provided and no inference to the contrary should be made. There is a risk of loss from an investment in

securities. Past performance is not a guarantee of future performance.

Glossary of Common Terms & Acronyms

Adjusted Funds From Operations (AFFO): A term used to describe Funds From Operations (FFO),

plus non-recurring items that do not impact the long-term fundamentals of the business. See FFO in

this glossary for more.

Cash Available for Distribution (CAD): This term is also referred to as funds available for

distribution (FAD). It is the cash available to be distributed to unitholders. It is most commonly seen

with REITs. CAD is calculated by subtracting recurring capital expenditures from funds from

operations.

Distributable Cash Flow (DCF): A non-GAAP (Generally Accepted Accounting Principles)

financial metric frequently utilized by Master Limited Partnerships as an alternative to earnings-per-

share. Expresses cash available for unitholder distributions, after payments to the General Partner.

Calculated by adding non-cash items, such as depreciation and one-time expenses, to net income.

Viewed as a better gauge of financial health than earnings-per-share, as MLPs operate asset-heavy

business models with significant depreciation expenses.

Dividend Yield: The annual dividend returns from an investment, expressed as a percentage. The

dividend yield is calculated from the annual dividend per share, divided by the stock price per share.

MLPs and REITs pay distributions, not dividends. Distribution yield is used for them instead of

dividend yield, though some companies (notably REITs) call it a dividend for ease of understanding by

the public.

Dividend Payout Ratio: The percentage of earnings paid to shareholders as a dividend. The payout

ratio is calculated from the annual dividend per share, divided by annual earnings-per-share. For MLPs

and REITs, this is typically expressed as the distribution coverage ratio.

EBITDA: Earnings before interest, taxes, depreciation, and amortization. Used by companies with

high levels of depreciation and interest costs, such as MLPs, to indicate the financial health of a

business. A similar metric to operating cash flow. Frequently used as part of leverage ratios such as

debt-to-EBITDA.

Funds From Operations (FFO): A non-GAAP financial metric frequently utilized by Real Estate

Investment Trusts, as an alternative to earnings-per-share. FFO is calculated by adding depreciation

and amortization expenses to net income, minus any gains on asset sales. REITs view FFO as a more

accurate gauge of financial health since earnings-per-share are heavily impacted by depreciation and

amortization expenses.

GAAP: Generally accepted accounting principles. These are legally required, standardized accounting

rules and procedures used when preparing financial statements.

If you read a term in The Sure Retirement Newsletter not on this list with which you are unfamiliar,

please email [email protected]. We will explain the term and add it to the glossary in next

month’s edition.

Sure Retirement...3 Enterprise Products Partners (EPD) is an MLP and has different tax consequences...

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