Friday, January 17, 2020

Dividend raise: Brookfield Renewable Partner (+5,3%)

My 3rd dividend raise of 2020! A few days ago Brookfields Renewable Partners (BEP) announced a raise in their quarterly dividend from $0,515 to $0,5425. For a stock that is yielding 4,7% this is a solid increase of more than 5%. This raise adds a roughly € 2,50 to my annual dividend income! It's actually my first dividend raise from BEP.

So far this is my third dividend raise. Last year I received 21 dividend raises in 2019. These raises combined have added around € 60 to my forward annual dividend income. In 2020 my dividend income has increased by over € 4 already. Of course I expect more raises during the rest of 2020. I'll keep you updated!

Monday, January 13, 2020

Goals for 2020

I recently discussed if I reached my goals for 2019. In this post I will elaborate on my financial goals for 2020. Here goes!

1. Deposits

New money is the fuel to my dividend machine! I've setup two monthly (automatic) payments.

  • € 300,- towards my tax free retirement account.
  • € 300,- towards my regular investment account.

I will increase my regular deposits toward my investment account to € 300,- per month, so € 3.600,- for this year.

For my tax free retirement account I can can still deposit around € 10.000,- tax free because my employer pension does not fully reach the tax treshold, therefore I am eligible to fund my tax free retirement account with my own money. Last year I deposited around € 1.900,-.  For this year I am setting a goal of € 3.600,- for this year.

Finally I would like to increase my ownership position in the company where I'm employed. I work as a consultant for a midsize consultancy firm specialised in real estate and area development. I currently have a medium stake which I'd like to increase a bit. So therefore I will save another € 1.800,-.

So all in all I want to deposit at least € 9.000,- this year towards my various investments. This is almost 60% more than I deposited last year. However, I think this is achievable!

2. Forward dividend income

Currently my dividend income is around € 1.700,- before tax. With the combination of invested capital, dividend growth en reinvestment of received dividens I am hoping to reach a forward dividend income of € 2.050,- (before taxes). This would mean an increase of 20%.

This it! It's just two simple goals. The first one is actually the most important. The 2nd is mostly a derivative and something I don't have a lot of influence on. I decided to not set another goal, for instance for blogging, as I don't want to feel obliged to write if I don't feel like it. Best of luck to you all in 2020!

Thursday, January 9, 2020

Recent Buy: Unilever

Earlier in January I bought 18 shares of Unilever (UNA) for € 51,56 per share. The total amount of money invested is € 928,-. Unilever currently pays an annual dividend of € 1,64 per share so with this purchase my yearly dividend income increases with € 25 after tax. My forward dividend income now is around € 1.710,-.

I already owned 50 shares, so as of now I own 68 shares. The main reasons for my purchase are:

  • Unilever currently seems fairly valued (P/E of 15x) after their dip in December because of a profit warning.
  • Unilever is a long-term, stable company which has performed nicely since I am an owner (since July 2013).
  • I want to increase my Euro-denominated positions to reduce the impact of forex-changes on my portfolio.
  • I've mentioned these reasons earlier on my blog.
With my monthly deposits and dividend income I expect to do another purchase in three months.

What do you think of my purchase of Unilever? Are you currently looking to open (or add) a position in Unilever?

Monday, January 6, 2020

Review 2019: How Did My Dividend Growth Portfolio Perform?

In this post I will take a closer look at my portfolio performance during 2019. It's been a formidable year in terms of price appreciation, that's probably not a big suprise.

26% rate of return

First, let's take a look at the rate of return of my portfolio. I started the year with a portfolio value of roughly € 31.400. During the year I deposited around € 3.800,- which consisted of about € 2.200,- in my regular brokerage account and almost € 1.600,- in my employer stock program. The ending value of my portfolio is € 43.500,-. The rate of return when taking into account the timing of my deposits during the year, is about 26%.

I've made some benchmark calculations using national and global total return stock indices (VWRL, AEXGR and SWTSX). These alternatives would have returned about 25 to 29% last year. This is without taking into account the costs for these alternatives. So all in all I am doing just fine with my dividend growth portfolio, especially because my portfolio has a beta of around 0,7x so it supposedly is less volatile than a broad index.

28% more dividends received

During 2019 I received about € 1.340,- in dividends after taxes. Note: I can reclaim the 15% dividend tax with my yearly tax return. This amount is 28% higher than last year!

37% higher forward dividend income

I started last year with a forward dividend income of € 1.225,- (before taxes). Currently my dividend growth portfolio is expected to generate about € 1.680,-. This is an increase of 37% which is totally awesome and definitely bodes well for next year.

So all in all it was a solid great year! The downside is that stocks are becoming more expensive to purchase. In a few days I'll provide an update about my first purchase this year.

How was your 2019? Are you satisfied?

Thursday, January 2, 2020

Goal Review of 2019: How Did I Do It?

Last year I wrote about my goals for 2019. This post will describe whether I reached these goals or nog. In short, my goals were as follows:

1. Deposit at least € 4.000,-
  • € 1.800,- regular investment account
  • € 1.400,- tax free retirement account
  • € 800,- employer stock program
New deposits are the fuel to my dividend growth machine. So how did I do it?
  • I deposited just over € 2.200,- in my regular brokerage account. So pass!
  • I deposited just over € 1.900,- in my tax free retirement account. Another pass!
  • I purchased € 1565,- worth of stock certificates in my employer stock program. You can read about it here. Three passes!
All in all I deposited about € 5.700,- which is more than expected. A halfyear pay raise at my job definitely helped to advance on these goals.

2. Annual forward dividend income of € 1.400,-
I wanted to reach a annual forward dividend income of € 1.400,- (before tax). Currently the meter says about € 1.700,- (slightly rounded upwards). So this one is a beat as well! There are two major reasons.
  1. I deposited more money into my regular brokerage account; and
  2. I now add my employer stock dividend to my annual forward dividend income.
Even without the last reason I still would have reached my goals, albeit with a much smaller margin.

3. Four quarterly buys
Another pass!
  1. Quarter 1: AT&T
  2. Quarter 2: Unilever
  3. Quarter 3: Brookfield Renewable Partners
  4. Quarter 4: Johnson & Johson
  5. Bonus buy in Quarter 4: Brink
4. Regular blogging
Finally I wanted to blog more regularly about my dividend portfolio and my progress. I had about 50 blog posts this year. The majority were minor updates about dividend raises but I am satisfied nonetheless. It keeps me motivated in order to reach my goals. For me, that's the most important reason of blogging.

All in all it was a solid year. In a next post I will provide an overview of my goals for next year. Thanks for reading!

How was your 2019? Did you reach all your goals?

Monday, December 30, 2019

Monthly report: December 2019

It's the last time of the year for my monthly dividend report! 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?!

Twelve companies paid me during the last month of the year. Even though it is not a record breaking month, it's still almost 24% better than last years December. The growth is fueled by additional and/or new purchases of UNA, BEP, JNJ and two solid dividend raises from UNP. I actually received my first Johnson & Johnson dividend!!

The two graphs below provide an overview of the whole year and compares it to earlier years. Compared to 2018 I received about 28% more dividends in 2019. Let's see if I can keep this up during the next year!

So finally, let's take a look at the best and worst performers in the last year. Please note that while writing this report, there are two trading days left so things can change slighty.

Top performers were KMI, BBL, JNJ and T with prices increases between 5-10%. The worst performers are UNA, O and AFL. These companies lost about 4 to 5% of their share price in the last month. I am currently contemplating adding to my Uniliver position in the new year. They have recently warned that the targets of 2019 might be missed. This resulted in a drop of the stock price. But I am not too worried about it since I am in it for the long haul.

Thanks for reading!

How was your last month of the year? What is on your watchlist for the new year?

Saturday, December 21, 2019

How I Saved € 500 in a few clicks!

Today I will elaborate a little bit about how I was able to save roughly € 500 with a few clicks. It's only applicable for my Dutch readers, but the general principle is interesting nonetheless.

I am the happy owner of a student loan which I collected during my college period. I am obligated to pay it back in 15 years after a grace period of 2 years. Currently I am about halfway. The interesting thing though is that the interest part of this debt is linked to our government bonds and fixed for a period of 5 years. I just started a new period of 5 years for which my interest rate is.... 0,0%!! That's free money in my eyes :-)

The 2nd interesting thing is that we have the option to receive another grace period of 5 years (or multiple grace periods, for a total duration of 5 years). This gives me the option to stop paying back my student loan, and redirect this cash flow to my mortgage for which I have to pay about 2,5% interest. The real interest rate is a little bit lower however, because I get to deduct the interest payed with my income taxes. However, it's still a net saving and if I do this for 5 years straight, I will save about € 500.

Other advantages are that I might be able to receive a better rate when my mortgage period ends in 7 years because I have a better Loan-to-value. And if I die in the coming 5 years, my student loan will be cancelled anyway but my family still has the benefit of a slightly lower mortgage.

The only risk is that the interest rates will go up in 5 years. However, if I spend the money on extra payments for my mortgage I actually reduce the interest rate risk because my morgage has a higher interest rate  and it has to be refinanced in 7 years anyway.

Just some random thoughts about my personal finance situation. I will post later about my goals for 2020 and the results for December 2019.

Do you have student debt? Do you want to get rid of it or would you consider delaying payments in order to boost your dividend income?