Sunday, January 20, 2019

Dividend raise - Realty Income

It's time for the first dividend raise of the year! Realty Income (ticker: O) decided to send me more money each month! They raised their monthly dividend to $0.2255 per share. That works out to a raise of $0,06 per share each year. I currently own 25 shares, so that's an extra $1.50 each year! Ka-ching!

All jokes aside, Realty Income increases their dividend on more than one occasion each year, so hopefully there's more to come this year!


Wednesday, January 16, 2019

Recent buy: AT&T (T)

Earlier in January I purchased my first shares in 2019. I used around $1.200 to purchase 42 shares in AT&T (ticker symbol: T) for a price of $28.65. This will add around €75 to my annual forward dividend income.

My reasoning is as follows:
  • T seemed undervalued based on a PE-ratio, compared to earlier years.
  • T's yield at the time of my purchase was monstrous. There's no need for high growth with a yield of 7,1%. T's recent dividend growth is muted but coupled with a historically high yield this seems fine.
  • Major, recent acquisitions of T are TimeWarner for $85 billion (in 2016) and DirectTV for $48 billion (in 2015). Hopefully this will provide top line growth and a strengthening of AT&T's position in the content space.
  • Its current debt leven is worring, but muted dividend growth combined with some asset sales should provide enough wiggle room in order to reduce debt levels.
  • Finally, I had no exposure towards telecommunications in my dividend portfolio. The addition of T seems logical from that perspective.
What do you think of my purchase of T? Did you recently purchased shares of T?

Monday, January 14, 2019

Goals for 2019

I've read a few posts of fellow bloggers about their goals for 2019. Earlier I promised I would tell a little bit more about my plans for this year. Here goes!

1. Deposits

I've setup two monthly (automatic) payments.
  • € 50,- towards my tax free retirement account.
  • € 150,- towards my regular investment account.
I am eligible to fund my tax free retirement accounts with roughly € 1.400,- this year. So 12x € 50,- is € 600,-. From last year I expect to receive a tax break of € 800,-. In May 2019 I will use this money to fund my tax free retirement account for the remaining contribution room.

Finally I would like to increase my share in the company where I'm employed. I work as a consultant for a midsize consultancy firm specialised in real estate and area development. The firm is owned by its employees and everybody has the oppurtunity to participate. The value of the company and its shares is based on a fixed formula where the last three years of earnings and the forecast for the current year are averaged and multiplied by a factor. Share owners receive a dividend and the amount depends on the company earnings and liquidity position. I currently have a small stake which I'd like to increase a bit. So therefore I need to save another € 800,-.

So all in all I want to deposit at least € 4.000,- this year towards my various investments.
  • € 1.800,- regular investment account
  • € 1.400,- tax free retirement account
  • € 800,- employer stock program

2. Forward annual income (dividend portfolio)

Currently I am expecting to receive around € 1.200,- (before tax) in dividends in 2018. Because of new deposits (see #1), dividend reinvestment and dividend growth, I am targeting an annual forward dividend income of € 1.400,- (+16%). Let's break it down:
  • New deposits: +€75,-
  • Reinvestment of dividend income: +€50,-
  • Dividend growth: €75,-.

3. Four quarterly buys

I am planning to purchase new shares on a quarterly basis. I am pooling together monthly deposits and dividends to purchase new blocks of shares for around €700,- each time. Since last year I pay a platform fee of €5,- per month but this fee is deducted from any transaction costs in that month. So this works out to one "free" trade per month for a cost of €60, per year. This new fee structure is used by various cheap brokers in The Netherlands, so I really have no alternative.

4. Regular blogging

Because of my new monthly deposit and the fact that I am planning to buy on a quarterly basis gives me a lot lot of motivation to invest more time in my writing. Mainly for my blog but perhaps some Seeking Alpha articles as well. The extra income is nice but that's not the goal persé. I am targeting to write a weekly blog (so about 52 blogs in total). 

So that's it for now. Let's see how this year turns out!

What do you think of my plans?Are your plans for 2019 ready? 

Thursday, January 10, 2019

Dividend growth 2017 and 2018

Today I am going to look back a bit on the growth of the dividends of the companies I own. Normally I do this more frequently but in the past two years I haven't updated my blog. So here goes!


In 2016 I received about €785 in dividends. This is net (after dividend tax) and calculated using the USD.EUR rate at the time of the dividend payment. In reality however I don't convert and just use the USD to reinvest in a new purchase. This is a rather big decline compared to 2015. There are several reasons:
  • Various serious dividend cuts
    • Kinder Morgan (KMI)
    • Billiton (BBL)
    • Textainer (TGH)
  • Spin-off Baxalta from Baxter and subsequent dividend reduction.
In 2017 things got better. I received a net amount of €856 which is an increase of 9%. I haven't deposited any new funds so I guess in a normal year I can expect this kind of dividend growth. The current yield of my portfolio is around 4% so the average weighted dividend growth of my existing holdings is around 5%.

In 2018 the growth in dividend income was slightly higher (+10%). I received some big increases (>15%) in 2018. Billiton, Kinder Morgan, Aflac, Union Pacific and T Rowe Price come to mind. However my biggest holdings in terms of income (Royal Dutch Shell and Omega Healthcare) decided to keep the dividend at its place. This kind of muted the overall dividend growth. I don't expect these kind of raises at my current job, so I'm quite satisfied with a 10% increase.

I expect a higher dividend growth in 2019, because I started to deposit new funds on a monthly basis. Depending on the amount of available funds I hope to achieve a growth of 15-16%. More on that later though!

How was your 2018 dividend wise? Are you satisfied with your dividend growth?

Tuesday, January 8, 2019

Dividend report - december 2018

It's time to give an update of the dividends of last months. Ten companies decided to pay me a dividend for my ownership. Total dividends (after tax) are around €128, roughly 16% more than last year. I really like this growth and hope to further increase it this year!

You can see the breakdown in the table below.

What is nice to notice is that this is the result of pure dividend growth and reinvestment. As you may have read earlier, I didn't deposit any new funds into this account for the last two years. So any increase in dividend income is because of the raises I received earlier this year. Big growers are UNP, TROW, AFL and INTC. Last year I bought a position in O with the cumulative dividends I received so that's also a big plus to the monthly dividend income.

Purchases
None this month.

Yearly forward dividend
Yearly dividend income (before taxes) is around €1225.

Saturday, January 5, 2019

Recap of the last two years of dividend growth investing

So earlier I told you a little but about my leave of absence ?

Let's give you a brief update of my buys and sells in the last two years:


  • I dripped a few shares of RDSA with their regular dividend. My position is becoming quite large. As of now it is almost 10% of my portfolio and about 15% of my forward dividend income. For now I still believe that RDSA is doing the right things. With extra deposits in the future its weight in my portfolio will slowly come down.
  • In January 2018 I purchased 25 shares of Realty Income (ticker: O) for a purchase price of roughly $53. I loved (and still do!) their monthly dividend rhythm. Current price is about $62 so for now it has been a great investment for a currency neutral rate of return (including dividends) of 23% annualized.
  • In October 2018 I sold my shares of  SOUHY, the mining spin-off from Billiton I got back in 2015. It was a rather small position but still performed nicely! Accounting for the dividends its rate of return was about 20% per year. Too bad the position was so small!
So as of now I will give a more detailed update whenever I enter into a new position or add to an existing one.

Thursday, January 3, 2019

Back after more than two years!

I posted my last blogpost in December of 2016, more than two years ago. What happened??

Life happened I guess. Two years ago we just purchased a new home. Obviously we needed the money for all kinds of stuff for our new home. So deposits into my investment account were stopped. After that we got pregnant! Again. But not with one baby, but with two! So all in all, we went from one 3yr old boy to a wrecking crew of three. I can tell you, that's a hell of a lot of work. As of now the oldest is over 4yr old and in kindergarten. The twins are 1yr old. Everyone is healthy and in great shape, so I suppose everything's alright. But I hope that kind of clarifies my leave of absensce.

As of now we are more or less settled - in our home as well as in life - so I can redirect some cashflow into my investment account. During the past two years I haven't deposited any new funds towards my account, but I did reinvest the received dividends on occasion. In a future post I might elaborate a bit more on that. For now I just want to let you know I am back!

I hope to interact more in the coming period with my fellow dividend growth investors or people interested in personal finance in general.