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?