It’s taken a little time but we’re where we want to be on yield. Step by step, we’ve pivoted the Buy List to lock in an annualized cash dividend yield of 9.96% across the portfolio. That’s what we want.

With that level of regular income coming in, we can keep up with the broad market’s long-term return profile . . . minus the volatility, the unpredictability and the anxiety. Unless the corporate landscape shifts dramatically to the downside, there’s no reason to suspect that these distributions won’t continue at the current level at least.

Granted, some of the stocks haven’t been popular. We’re running a capital loss on some of these positions even after adding the cash back. But there’s a simple truth here: as long as the companies are paying us at this rate, we’re doing fairly well.

We aren’t eager to sell most of these names here, which means the stock price doesn’t matter so much. It’s of theoretical interest. The key thing is that we’re making this money without even thinking of selling a single share at any price.

That’s what “locking in” a yield means. And it looks like the market is finally coming around. We scored a total return of 5% in the third quarter and 4 points of that came in the form of cash. Compare that to what we would’ve gotten in the bond market or even in high-yielding money markets . . . those are our rivals, that’s our benchmark.

Money market rates are coming down. Every time the Fed moves, those “rivals” become less competitive and less attractive. The low-risk income they pay now is probably going to be lower a year from now.

Weigh that against our yields. These companies may not be glamorous but they generate enough cash to distribute to shareholders. That cash is unlikely to go away. Even if it does, I like our odds better than what we’d get in the money market or bonds.

From here, it’s all about sitting back and collecting almost 10% a year . . . and watching our companies closely for signs that they aren’t going to make their payments. Sometimes opportunities will emerge that let us rotate up the yield scale and lock in something even better.

We have an example of both right now. Looking around the Buy List, HON has become the biggest drag and it’s also got the lowest remaining current yield at only 2.3%. The stock is stalled.

I think we’ve come as far as we can here for the time being. Besides, HON was supposed to be a “tactical” or trading-oriented play for us. We need to cut these loose when the market wakes up to the deep value we captured at the beginning.

HON was a real rock for us during our grand transition. But now that we’ve come this far, let’s take our win and walk away. Farewell, HON. Thank you for about $15 per share in capital gain and close to another $10 in dividends.

And to replace it on the Tactical Value side, I think it’s time to bring PFE to the table. Yes, Pfizer has gotten extremely hot in the last few days as the tension around White House drug price policy evaporates.

Suddenly these battered stocks have what they need to reclaim their long-term highs. On PFE, that could ultimately mean a trip back into the $50 zone. In the more immediate future, this was practically a $30 stock a year ago.

We were a little late here. The current surge may need to pause soon before the bulls are ready for the next lap. But I’d rather pick up a deeply depressed stock like this on the rebound instead of waiting months or even years for Wall Street to wake up.

And here’s the great thing. Even after this surge, PFE pays about 6.3% a year in quarterly installments. The dividend has edged up about 1.6 cents a share every year in the past decade. At that rate of dividend growth, we could be capturing close to 9% a year here in pure passive income.

We might not be here that long but it’s nice to know the numbers go the right way. PFE is not stagnant. It’s not shrinking. It’s making enough money for management to keep authorizing bigger distributions and not smaller ones.

The stock is still cheap at roughly 9X forward earnings. What’s not to love? Buy PFE below $28. This is a tactical trade. Let’s see how long it takes to hit $35 . . . and then we’ll see where we are.