Monday, November 9, 2020

Recent buy: Brink

Last week I purchased 20 additional shares of the company I work for. I work as a real estate and finance consultant for a mid sized management and consulting firm. I like my job very much! It offers me a lot of interesting and challenging projects in the field of real estate and area development. I love solving and optimizing these financial puzzles with Excel spreadsheets but also to be able to give customers quality advice about how to act. I wrote about it last year as well.

My company has been profitable for at least the last 15 years, even during the big downturn in 2009-2010. The company is fully owned by its employees. There are no outsider shareholders. I really like that, because the interests as shareholders and colleagues are aligned most of the time. If the company performs well financially, everyone profits, whether you are a shareholder or not.

My company has a policy to distribute its earnings based on a threshold for the capitalization rate of at least 30%. Excess funds are distributed as dividends in two payments: a bigger one of 75% just after the financial year has ended and a final payment at the shareholder meeting a few months later.

The valuation of my company is based on a 5.5x multiple of the last three years earnings and the forecast for next year's earnings. Its dividend yield based on last year's dividend is almost 9%. My purchase of 20 additional shares adds roughly € 150 to my annual dividend income (before taxes). My annual dividend income currently hovers around € 1.850,-.

As of now this position is about 11% of my portfolio and 25% of my dividend income. My plan is to purchase new stocks to further diversify my portfolio. I am able to purchase shares in my company once a year, so hopefully I can purchase another batch next year!

Would you consider purchasing shares in your own company?

Sunday, November 1, 2020

Dividend Report: October 2020

We're done with October! Let's see how many companies sent me a dividend check for my ownership. These checks are the results of decisions I made earlier in life, sometimes years ago, where I decided to purchase shares in these companies. Nowaydays I still collect these checks but I have to do absolutely nothing to receive them. They just get deposited in my brokerage account, no questions asked. Isn't that great?!


Compared to last year my dividend income increased by more than 20%. It's mostly because of my recent purchase of CSCO. I received about € 43 after taxes, compared to € 35 last year. In total I got paid by 5 different companies. Most of my holdings showed some dividend growth albeit small.



I am still ahead compared to the cumulative total I received last year till now. I still aim for an increase this year, but it won't be a growth of 40% as targeted but maybe something like 10%. We'll see what happens! In the meantime, I just keep grinding away, putting money to work and reap the rewards down the line.

How was your month? Do you see values in the current marketplace?

Tuesday, October 6, 2020

Dividend Report: September 2020

We're done with September! Let's see how many companies sent me a dividend check for my ownership. These checks are the results of decisions I made earlier in life, sometimes years ago, where I decided to purchase shares in these companies. Nowaydays I still collect these checks but I have to do absolutely nothing to receive them. They just get deposited in my brokerage account, no questions asked. Isn't that great?!


Compared to last year my dividend income remained fairly in place, what isn't exactly a great thing to be honest. I received about € 180 after taxes, compared to € 190 last year. In total I got paid by 15 different companies. Most of my holdings showed some dividend growth albeit small. Too bad I had two nasty cuts earlier this year (RDS and BBL). But I am happy with my new dividend payers JNJ and BIP , and increased dividend payments by Unilever and Aflac because of purchases earlier this year




I am still ahead compared to the cumulative total I received last year till now. However the trend is not in the right direction. I still aim for an increase this year, but it won't be a growth of 40% as targeted but maybe something like 10%. We'll see what happens! In the meantime, I just keep grinding away, putting money to work and reap the rewards down the line.

How was your month? Do you see values in the current marketplace?

Sunday, October 4, 2020

Recent Buy: Cisco

Last week I purchased 35 shares of Cisco Systems Inc. (ticker: CSCO) for $ 39,11 per share. CSCO pays a quarterly dividend of $0,36 so this purchase adds roughly $50 per year before taxes and FX-change.




 The reasons of my purchase are as follows:
  • Cisco is quite cheap based on its forward PE-ratio: about 12,5x. In the past 5 years the PE-ratio hovered somewhere between 12 tot 20x so the current price seems relatively cheap.
  • I don't have a big exposure to tech in my portfolio, only IBM and Intel. 
  • Cisco's dividend yield is decent at about 3,7% and there is room for growth with a payout ratio less than 50%.
  • Dividend growth in the last 5 years has been really solid at 13%. I don't expect this growth to continue (although it would be nice) but a dividend growth of 6-8% coupled with a dividend yield of 3,7% and buybacks will deliver a solid total return.
  • Its balance sheet is rock-solid. Enough cash ($30 billion) to cover its entire debt-load. And if that's not enough, Cisco's annual free cashflow is enough to cover its debt load as well.
  • Total return in recent years has been less than the S&P500. I expect "reversion to the mean" works for Cisco as well.
  • The DGI community has been buying Cisco as well, so that counts for something :-)
Thanks for reading! What do you think of my purchase?

Saturday, September 19, 2020

Dividend cut (BBL) and raises (PM, O)

This year has not been too kind with regards to dividend growth. I received several dividend cuts (or "suspensions") with the cut from Shell being the toughest. The latest dividend cut is BBL. A few weeks ago they declared a dividend of $ 1,10 per share which is a 15% decrease from last years dividend. My annual dividend income will decrease by about € 10.

However there's also some good news. Recently PM raised its dividend by almost 3% to $1,20 per share. Realty Income (O) raised its monthly dividend to $0,234 which is a whopping 0,2% increase. My annual dividend income increased by just under € 2 due to these raises.


In total I received 22 raised (and cuts) so far this year. Maybe growth will return later this year, but for now I don't expect anything going forward. I'll just have to deposit more money to grow dividends!

Sunday, September 6, 2020

Dividend Report: August 2020

We're done with July! Let's see how many companies sent me a dividend check for my ownership. These checks are the results of decisions I made earlier in life, sometimes years ago, where I decided to purchase shares in these companies. Nowaydays I still collect these checks but I have to do absolutely nothing to receive them. They just get deposited in my brokerage account, no questions asked. Isn't that great?!


Compared to last year my dividend income remained fairly in place, what isn't exactly a great thing to be honest. I received about € 87 after taxes, compared to € 91 last year. In total I got paid by 5 different companies. Most of my holdings showed some dividend growth albeit really small. However with the decreasing value of the USD compared to EUR my monthly dividend income is almost 5% lower.



I am still ahead compared to the cumulative total I received last year till now. However the trend is not in the right direction. I still aim for an increase this year, but it won't be a growth of 40% as targeted but maybe something like 10%. We'll see what happens! In the meantime, I just keep grinding away, putting money to work and reap the rewards down the line.

How was your month? Do you see values in the current marketplace?

Sunday, August 9, 2020

Dividend Report: July 2020

We're done with July! Let's see how many companies sent me a dividend check for my ownership. These checks are the results of decisions I made earlier in life, sometimes years ago, where I decided to purchase shares in these companies. Nowaydays I still collect these checks but I have to do absolutely nothing to receive them. They just get deposited in my brokerage account, no questions asked. Isn't that great?!


Compared to last year my dividend income decreased drastically. I received just € 35 after taxes, compared to € 72 last year. My US holdings recorded slight increases all around, however my only EUR-denominated stock (Brink) postponed its final dividend payment due to COVID-19. They expect to pay later this year (or beginning of next) if things normalize. In total I got paid by 4 different companies.

I am still ahead compared to the cumulative total I received last year till now. However the trend is not in the right direction. I still aim for an increase this year, but it won't be a growth of 40% as targeted but maybe something like 10%. We'll see what happens! In the meantime, I just keep grinding away, putting money to work and reap the rewards down the line.