Monthly report: October 2024

Global Market Performance in October 2024

October brought varied results across major global indices, reflecting an uncertain but cautiously optimistic month for investors:

• AEXGR: The Dutch AEX Gross Return Index decreased by 1.5%, slipping from €3,557 to €3,502. This was driven by continued challenges in the European economy, including high inflation and slower-than-expected growth.
• IWDA: The iShares MSCI World Index (IWDA) recorded a solid gain of 2.9%, rising from €97 to €99, indicating resilient performance across global markets.
• DJITR: The Dow Jones Industrial Total Return Index (DJITR) inched up 0.6%, moving from $105,104 to $105,734. Steady performance from large-cap U.S. companies helped support this increase.
• S&P 500: The S&P 500 index showed stronger growth at 1.7%, rising from $5,709 to $5,808. Positive earnings reports from the tech and healthcare sectors, as well as resilient consumer spending, contributed to the index’s gains.

Overall, U.S. and global markets demonstrated cautious optimism, while European markets continued to face headwinds. This backdrop influenced individual stock performances within my portfolio, where some companies experienced gains while others declined.

Top 3 Gainers in My Portfolio

• KMI (Kinder Morgan): +10%
  Kinder Morgan’s stock was a top performer in my portfolio this month, likely benefiting from rising natural gas demand and steady dividend payouts, which bolstered investor confidence.
• APD (Air Products and Chemicals): +9%
  APD saw a significant increase in October, possibly due to its strong earnings in industrial gas and chemicals, which remain critical across sectors such as healthcare and energy.
• PM (Philip Morris International): +8%
  Philip Morris reported strong results, with its transition toward smoke-free products capturing market attention. The company’s high dividend yield continues to attract income-focused investors.

Top 3 Losers in My Portfolio

• AOS (A. O. Smith Corporation): -14%
  AOS experienced a double-digit drop, perhaps due to concerns over the housing and construction sectors. Rising interest rates are impacting housing demand, which directly affects AOS’s water heating products.
• ASML (ASML Holding): -10%
  ASML faced headwinds due to concerns over semiconductor demand and potential slowdowns in tech spending. Although ASML is a tech leader, the current economic uncertainties weighed on its stock price.
• BHP (BHP Group): -10%
  BHP, a major mining company, also faced a tough month. Falling commodity prices and fears of an economic slowdown impacted investor sentiment, leading to a drop in its stock price.

October 2024 Dividend Income: A Year-Over-Year Comparison

Examining my dividend income for October 2024 in comparison to last year reveals some interesting trends:

In October 2024, my U.S. dollar-denominated dividends grew slightly from $217 in October 2023 to $222, an increase of 2.3%. Noteworthy contributors included HASI (Hannon Armstrong) with a 5.1% increase, MRK (Merck & Co.) with 5.5%, and O (Realty Income), which provided a substantial 37.2% growth in dividend income, due to an additional purchase last year. These companies demonstrated stability in both payouts and growth, enhancing my overall income. ADP was a new dividend payer with a first payment of $11. MPW was a dissonant because of its dividend cut last quarter. We'll see how things develop in the coming months. Finally I sold my shares in BAX earlier this year so this will be a slight drag in the coming period. 

Despite the minor uptick in USD dividends, the after-tax total dividend income in October 2024 slightly decreased by 1.0%, from €175 to €173 after factoring in currency exchange fluctuations. 

Closing Thoughts: The Long View on Dividend Investing

October’s market performance and my portfolio’s dividend income are reminders of the importance of long-term thinking. Markets fluctuate and individual stocks can experience setbacks, but a diversified dividend growth portfolio can offer steady, compounding income over time.

As Benjamin Graham wisely put it:

"The individual investor should act consistently as an investor and not as a speculator.”

My focus remains on high-quality companies with reliable dividends, reinvesting income, and maintaining a balanced portfolio that can withstand market ups and downs. Each dividend payment brings me a step closer to financial independence, reinforcing the power of disciplined investing.

Recent buy: Canadian National Railway (CNI)

I recently added 20 shares of Canadian National Railway (CNI) to my dividend growth portfolio. CNI is one of North America's leading transportation companies, and I’ve been watching it for some time due to its solid fundamentals and consistent dividend growth history. I already own Union Pacific (UNP) and CNI is a nice addition since it operations in a different region.

CNI operates an extensive railway network, which is vital to the transport of goods across the U.S. and Canada. This gives it a defensive edge, even during economic downturns. What drew me to CNI, aside from its stable operations, is its impressive dividend growth track record. The company has been increasing its dividend for over two decades by roughly 10% per year, and with a current yield of around 2,2%, it provides a nice mix of income and future growth potential.

I also see long-term benefits as CNI continues to expand its operations and improve efficiency. Their commitment to innovation in logistics and sustainable operations positions them well for the future, especially with increasing demand for reliable transportation infrastructure.

For me, this investment is about more than just the dividend—it’s about owning a piece of a company that has a long history of delivering value to its shareholders. I’m excited to see how this addition performs over time and how it contributes to the overall growth of my portfolio’s dividend income.

This purchase will add about $60 to my annual forward dividend income.

Monthly report: September 2024

As September has passed, it’s time to reflect on how the markets performed, review the biggest movers in my portfolio, and assess the progress of my dividend income. Let’s break down the numbers and explore what they mean for the future.

Market Overview: Global Performance in September 2024

The global markets in September 2024 presented a mixed bag of performance, with different indices reflecting varying trends:

• AEXGR: The Dutch AEX Gross Return Index (AEXGR) saw a slight dip of -1.1%, falling from €3,597 to €3,556. The performance reflects a general weakness in European markets, driven partly by economic concerns such as inflation and energy prices.
• IWDA: The iShares World Index (IWDA), which offers exposure to global equities, showed modest growth of +0.7%, holding steady at €96. This indicates relatively stable performance in developed markets.
• DJITR: The Dow Jones Industrial Total Return Index (DJITR) surged +3.5%, increasing from $101,984 to $105,536. This gain was driven by strong earnings reports from key U.S. companies and a generally optimistic economic outlook.
• S&P 500: Meanwhile, the S&P 500 saw a notable increase of +4.2%, rising from $5,529 to $5,762. The U.S. stock market, fueled by tech and healthcare sectors, was one of the best-performing regions in September.
• Overall, U.S. markets outperformed their European counterparts during the month, showcasing the strength of the American economy, while European markets struggled under inflationary pressures.

Top 3 Gainers and Losers in My Portfolio

• MPW (Medical Properties Trust): +28%
  MPW was the top performer in my portfolio. They have bene beaten the last year but last month MPW announced that it reached a global settlement agreement with Steward and its secured lenders that restores MPW’s control over its real estate, severs its relationship with Steward and facilitates the immediate transition of operations to quality replacement operators at 15 hospitals around the country. This is good news since its the start of a new phase for the company.
  
  
• BHP (BHP Group): +19%
  The mining giant BHP benefited from rising commodity prices, particularly in iron ore and copper, both critical for global infrastructure and green energy projects.
  
  
• BEPC (Brookfield Renewable Partners): +18%
  BEPC's impressive gain highlights the increasing investor focus on renewable energy assets. With governments pushing for greener economies, renewable stocks like BEPC continue to attract attention.

Top Losers:

• Shell: -8%
  Shell faced a tough September, losing ground due to weakening oil prices and pressure from governments and investors to accelerate its transition to cleaner energy sources.

The prices of other companies only fell by 3% or less which is more or less noise. 

September 2024 Dividend Income: A Year-Over-Year Comparison

Looking at my dividend income for September 2024 compared to the same month in 2023, there has been a noticeable improvement, reflecting the growth of my portfolio and dividend reinvestments over time.

My Euro-denominated dividends increased modestly from €197 in September 2023 to €201 in September 2024, a growth of 2.1%. This is largely due to slight increases from companies like AD (+2%) and UNA (+4.8%), as well as Shell, which, despite price depreciation, delivered steady dividends.

My U.S. dollar-denominated dividends showed a much more robust increase, rising from $375 in September 2023 to $475 in September 2024, marking a 26.5% growth. Significant contributors include AFL (+19%), CMI (+56.3%), and BIPC and BEPC, which contributed nothing last year but provided more than $77 this year due to new purchases (BEPC: here and here, BIPC: here). JNJ (purchase in January 2024) and O (Realty Income) (last purchase in October 2023) in also delivered solid double-digit dividend increases.

Total Dividend Growth: On a constant foreign exchange basis, my total dividend income in September 2024 grew by 17.7% compared to September 2023. After factoring in exchange rate effects, my total after-tax dividend income stood at €539, up from €473 last year, representing a 14.0% year-over-year growth.

This continued growth is encouraging, especially as a long-term investor who relies on consistent and compounding dividend payments.

Conclusion: Long-Term Investing Pays Off

The mixed performance of global markets and individual stock fluctuations highlight the importance of focusing on the long term. Despite short-term volatility, my dividend income continues to grow steadily year after year, reaffirming my belief in a disciplined, dividend-focused investment strategy. As the legendary investor Peter Lynch once said:

"In the long run, it's not just how much money you make that will determine your future prosperity. It's how much of it you put to work by saving and investing."

I remain committed to reinvesting my dividends and focusing on quality, dividend-paying stocks to ensure that my portfolio continues to generate increasing income over time. The combination of stable dividend growth and strategic asset allocation continues to pay dividends — literally and figuratively!

Recent buy: Deere: a long-term investment

Last week, I made my second purchase of Deere shares—adding two shares at $388 each to my portfolio. It was a long time coming, as I first invested in Deere back in 2013 when I bought 18 shares for about $85 per share. Since then, the total return on those shares has been incredible, driven by strong earnings growth, massive share repurchases (3% annually on average), and a compounded annual growth rate of 10% in its dividend.

With my recent purchase, I’ve rounded out my position to an even lot, which has been a goal of mine for some time. The current price of Deere seems reasonable, with a price-to-earnings ratio of 13x—about halfway in its 52-week range. Interestingly, the stock price hasn’t moved much in the past three years, but I believe this is largely reflective of Deere’s cyclical nature.

Despite being in a downtrend right now, Deere’s core business remains strong, and I expect future growth as the agricultural and industrial sectors continue to evolve. The long-term prospects seem promising, especially considering Deere’s leadership in its industry and its commitment to returning value to shareholders.

Monthly report: August 2024

As August comes to a close, it’s time to reflect on how the markets performed, review the biggest movers in my portfolio, and assess the progress of my dividend income. Let’s break down the numbers and explore what they mean for the future.

Market Performance: August 2024 Overview

August was a generally positive month for equities, as reflected in Table 1. The S&P 500, a critical benchmark for U.S. stocks, rose by 3.7%, closing at $5,648. This gain suggests continued confidence in the U.S. economy, supported by robust corporate earnings and stable consumer demand. The Dow Jones Industrial Total Return Index (DJITR) also experienced a solid increase of 2.7%, finishing at $102,882. This performance indicates strength in large-cap stocks, particularly in sectors like industrials and healthcare, which are often key components of dividend portfolios.

Meanwhile, European markets showed resilience, with the AEXGR index rising by 2.4%. Despite facing economic challenges, such as persistent inflation and energy concerns, European equities managed to post respectable gains. The IWDA index, which tracks global equities, recorded a modest 1.0% increase, highlighting a more cautious approach by investors in international markets.

Portfolio Highlights: Biggest Gainers and Losers

In my portfolio, several stocks stood out for their notable price movements in August. 

Top 3 Gainers:

• Texas Instruments (TXN): +11%
  Texas Instruments was the top performer in my portfolio, gaining 11% in August. The company benefited from strong demand in the semiconductor industry, which continues to see robust growth driven by advancements in technology and increased chip usage across various sectors.
  
  
• Walmart (WMT): +11%.
  Walmart also saw an 11% increase, reflecting its solid earnings and strong consumer demand, particularly in the grocery and e-commerce segments. As a defensive stock, Walmart continues to perform well in both stable and uncertain economic environments.
  
  
• Medtronic (MDT): +10%
  Medtronic gained 10%, driven by positive developments in its medical devices segment. The company’s innovations in healthcare technology have positioned it well for growth, making it a reliable dividend payer in my portfolio.

Top 3 Losers:

• Shell: -4%
  Shell was the biggest loser in my portfolio, with a 4% decline. The drop is likely due to fluctuating oil prices and concerns over the long-term viability of fossil fuels in the face of growing renewable energy adoption.
  
  
• Air Products and Chemicals (APD): -3%
  APD fell by 3%, potentially due to market concerns about higher energy costs impacting its profitability. Despite this short-term decline, the company remains a strong player in the industrial gases sector.
  
  
• Medical Properties Trust (MPW): -3%
  MPW also saw a 3% decline, reflecting ongoing challenges in the healthcare REIT sector, including regulatory pressures and market uncertainties affecting its hospital-based portfolio.

Dividend Income: August 2024 vs. August 2023

My dividend income continues to show positive growth. In August 2024, my after-tax dividend income increased by 9.6% compared to August 2023, rising from €170 to €187. This growth is largely due to purchases in key holdings such as Realty Income (here and here), which more than doubled its payout, and other companies that steadily raised their dividends throughout the year.

Looking at 2024 year-to-date, my monthly dividend income has consistently outpaced the previous year. This steady increase is a testament to the power of dividend growth investing, where reinvesting dividends and holding companies with strong track records of dividend increases leads to compounding income over time. As of August 2024, my cumulative dividend income is significantly higher compared to the same period in 2023, reflecting both the impact of dividend raises and the benefits of reinvestment.

Final Thoughts

As we look ahead to September, it's important to stay focused on long-term goals, especially in the face of market volatility. Remember the wise words of Warren Buffett: "The stock market is designed to transfer money from the Active to the Patient." Dividend investing is a long game, and those who stay patient, reinvest their dividends, and focus on high-quality companies are likely to reap the rewards over time.

By continuing to invest in companies that consistently increase their dividends, you are not just growing your income, but also building a more secure financial future. Here’s to staying patient and letting your dividends do the work!

Recent sell (INTC) and buy (BEPC)

On August 20th I made a new portfolio move consisting of a sell and a purchase.

I sold 150 shares of Intel (INTC) for about $182 per share. I bought my first shares more than 10 years ago for $24 per share. I added two times, once in 2021 andthe latest about two years ago in 2022. Intel experienced a significant stock decline after releasing its Q2 earnings. The company’s stock plummeted more than 30% in the periode there-after. Intel reported Q2 revenue of $12.8 billion, a 1% decrease year-over-year. The company’s gross margin fell to 38.7%, and its EPS of $0.02 missed expectations. In response, Intel announced aggressive cost-cutting measures, including a 15% workforce reduction by the end of 2025 and the suspension of its dividend starting in Q4 2024, after it has already been cut earlier in 2023. Additionally, Intel reduced its 2024 gross capital expenditure forecast to $25-27 billion, down from earlier projections. The aggressive cost-cutting measures, while intended to improve financial performance, suggest deeper underlying problems that could affect future growth. The dividend suspension and reduced capital expenditure have further unsettled investors, raising doubts about Intel’s competitiveness and growth prospects.

During my holding period I received about half of my purchase price back in dividend. But despite this dividend cushion I am still on the hole because of the share price depreciation.

As a replacement I bought 80 shares for $28 per share in Brookfield Renewable (BEPC). Brookfield Renewable operates one of the world’s largest publicly traded platforms for renewable power and decarbonization solutions. Their portfolio consists of hydroelectric, wind, solar, distributed energy and sustainable solutions across five continents.

I purchased shares earlier this year but wanted to increase my position in the growing company.

This sell will decrease my dividend income by $75 but my purchase in BEPC will add about $113 to my annual dividend income. I have some cash left which I may use in the coming period to add to an existing position or to enter a new position.

Monthly report: July 2024

July is over. It was a decent month in terms of stock prices. Across the board about +2%. I had some bigger winners like BMY, HASI and MPW. But also some losers like ASML and MRK. These happen to be bigger positions so although the ratio of gainers to losers is in favor of the gainers, the average increase is still relatively limited.

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?!

A total of about € 175 in dividend income, about the same as last year. This small decrease is mainly the result of a dividend cut from MPW and the recent disposition of my shares in Baxter. Recent purchases of shares in Realty Income (here and here) softened the blow. Dividend growth for my other holdings is somewhat muted.

In the graph below I've shown my monthly dividend income. You can see the rather small decrease from July 2023 but the underlying trend is still up.

In the graph below I've showed my cumulative dividend income. The cumulative dividend income made big jump in June. I expect to see a little growth (compared to last year) in the coming months, but nothing too serious.

Currently my annual dividend income is around about € 13.050, slightly lower compared to last month, but that's due to some moves I did not yet report.

How was your July? What is your watchlist?