Sunday, June 7, 2015

Monthly Update: May 2015

It's that time of the month again! A few days late but here's my monthly update for April. In general markets rose with gains between 1 and 2%. The USD.EUR-rate also increased 1% which helps my portfolio since around 80% is USD-listed. In the table below I have presented some benchmark indicators of general market indices and my own dividend growth portfolio.


May 2015
IndicatorAs of 30-4As of 30-5% change
S&P 500 Total Return3.8423.891+1.3%
Dow Jones Industrials Total Return35.92736.473+1.5%
AEX GR1.4371.461+1.6%
USD.EUR0.89290.9020+1.0%
Portfolio value€ 24.833 € 24.890 +0.2%

However, since I am in it for the long haul I am not too interested in these daily or monthly fluctuations. What matters is that I keep focused on buying high quality companies which provide me with a steady stream of growing dividends.


Sunday, May 10, 2015

Monthly Update: April 2015

It's that time of the month again! A few days late but here's my monthly update for April. In general markets rose slightly with gains between 0.3 and 1%. On a daily basis the fluctuations were much higher but in the end the results are average I guess. However the US dollar lost grounds against the Euro which had its effect on my portfolio. Roughly 80% of my portfolio is valued in USD. In the table below I have presented some benchmark indicators of general market indices and my own dividend growth portfolio.


april 2015
IndicatorAs of 31-3As of 30-4% change
S&P 500 Total Return3.8053.842+1,0%
Dow Jones Industrials Total Return35.76735.927+0,4%
AEX GR1.4331.437+0,3%
USD.EUR0,91070,8929-2,0%
Portfolio value€ 25.407 € 24.833 -2,3%

Tuesday, May 5, 2015

Recent buy: Union Pacific Corp

Last week I wrote a post about the question in which company to invest next. I got several good tips, thanks! In the end I went back and forth between Johnson & Johnson (JNJ) and Union Pacific Corp (UNP). So what's my reasoning with this purchase?

  • I was not invested in any railroad company so far while I do have some healthcare exposure through BAX and to a lesser extent OHI.
  • The railroad industry has high barriers of entry and consequently a big moat. Railroads and trains have various competitive advantages over trucks (e.g. cost, speed, safety, environment) and will remain an important part of the future transport sector.
  • Current yield of UNP (2%) is lower than JNJ's yield (3%), however UNP's dividend growth in recent years outpaced JNJ's growth rate.
  • UNP's payout ratio (in terms of %EPS) is only 37% which leaves ample room for future dividend growth, especially with estimated EPS growth of ~14% in the next 5 years (analysts opinions...).
  • JNJ's payout ratio is slightly higher at 54% and estimated EPS growth rate is also lower at ~5% for the next 5 years.
  • The P/E-ratio is comparable (~18x)
  • Obviously JNJ's balance sheet is a fortress, but UNP's debt/equity ratio of 0.6 is not too bad either.
  • Total return in the last 10 years for UNP is a whopping 22% per year. Even half of that would be just fine by me! JNJ's total return in the last 10 years is only 6% per year. This gap is much smaller if you take into account the risk adjusted rate of return (JNJ is a much 'safer' investment in terms of beta). But still UNP is much more of a growth company than JNJ.
All in all I decided to open a position in Union Pacific Corp. My purchase of 15 shares add roughly 30 to my annual forward dividend income.


Monday, April 27, 2015

Next purchase: what to do?

I just deposited €1000,- to my brokerage account. Together with the accumulated dividends of the last months (€500) I am able to open up another position in my dividend growth portfolio. Given the fact that the US dollar and the Euro are looking at parity maybe somewhere in the next few months, I was pondering to purchase a Euro-based dividend company. However the 'Euro Dividend All Stars' (maintained by No More Waffles) provided me with less options than I originally anticipated!

I used the following criteria in my search:

  • P/E-ratio < 20;
  • 3-, 5- and 10 DGR > 6%;
  • Yield > 1.5%;
This set of criteria yielded me with 6 investment options. All of those are hovering near their 52wk highs. I only recognized BASF (materials) and BMW (auto industry). However I am not keen on getting into the auto industry. So maybe BASF? Unfortunately they only pay their dividends once per year :(

So what about US dividend stocks? There seems to be some consensus that certain stocks are good buys in the current market environment. I've seen a few 'recent buy' posts about JNJ, T and TROW. However, Praxair (PX) is looking nice at $122 as well (P/E-ratio at 21x though). Blackrock's (BLK) stock price has run up slightly since the beginning of the year, so perhaps TROW is a slightly better option right now? Realty Income (O) decreased almost 10% in the last 3 months and is a monthly dividend payer. Definitely O would be a nice quality addition to my portfolio!

Does someone out there have some good advice for me? Or maybe some other suggestions? I am looking forward to hearing from you :)

Monday, April 6, 2015

Monthly Update: March 2015

It's that time of the month again! A few days late but here's my monthly update for March. In general markets calmed a bit after a hectic beginning of the year. American markets lost a bit of ground whereas the Dutch AEX index continued it march upwards. The US dollar continued to gain strength against the Euro but the pace seemed to slow down compared to earlier months. In the table below I have presented some benchmark indicators of general market indices and my own dividend growth portfolio.


March 2015
IndicatorAs of 28-2As of 31-3% change
S&P 500 Total Return3.8663.805-1,6%
Dow Jones Industrials Total Return36.44135.767-1,9%
AEX GR1.4211.433+0,8%
USD.EUR0,89070,9115+2,3%
Portfolio value€ 24.214 € 24.407 +0,8%

However, since I am in it for the long haul I am not too interested in these daily or monthly fluctuations. What matters is that I keep focused on buying high quality companies which provide me with a steady stream of growing dividends.

Thursday, March 12, 2015

Monthly Update: February 2015

It's that time of the month again! A few days late but here's my second monthly update in 2015. What a month it was. Stock markets were on a tear, especially in Europe. The Dutch AEX index increased over 8%! My dividend portfolio did not increase as much but it still ended above € 24.000 which is obviously not chump change.


IndicatorAs of 31-1As of 28-2% change
S&P 500 Total Return3.6563.866+5.7%
Dow Jones Industrials Total Return34.76736.441+4.8%
AEX GR1.3141.421+8.1%
USD.EUR0,88340,8907+0.8%
Portfolio value€ 23.386 € 24.214 +3.5%

All in all a hectic month. However, since I am in it for the long haul I am not too interested in these daily or monthly fluctuations. What matters is that I keep focused on buying high quality companies which provide me with a steady stream of growing dividends.

Monday, February 9, 2015

Monthly Update: January 2015

It's that time of the month again! A few days late but here's my first monthly update in 2015. What a month it was. The ECB decided to act on continued fears of deflation and will pour over a trillion euro's in the market in the coming years. This decision resulted in a lower euro and rising stock prices in Europe. However the opposite seemed to happen to US stocks in the past month.

All in all a hectic month. However, since I am in it for the long haul I am not too interested in these daily or monthly fluctuations. What matters is that I keep focused on buying high quality companies which provide me with a steady stream of growing dividends.


Indicator
As of 29-12As of 31-1% change
S&P 500 Total Return3,8273,656-4.5%
Dow Jones Industrials Total Return36,08134,767-3.6%
AEX GR1,2441,314+5.6%
USD.EUR0.82270.8834+7.4%
Portfolio value€ 22,390 € 23,386 +4.4%