I couldn’t help myself and loaded up 30 more Royal Dutch Shell (RDSB) shares yielding 6.4% at the end of this work week. With a dividend of $1.88 per share, this increases my forward dividend income by $42.3 after taxes or around 38.41EUR with the current EUR/USD rate.
This company doesn’t need much introduction, it’s one of the largest corporations in the world and I already discussed some of my reasons for buying it in previous posts. I like it for its quarterly distributions, the current high yield, its very long and reliable history of paying dividends, its commitment to shareholders and the favorable dividend tax conditions from my Belgian point of view.
Shell presented its second quarter results on Thursday, management once again stressed its commitment to the shareholder. The dividend will remain the same this year and at least the same amount in 2016, and the firm also reiterated its commitment to commence a big stock buyback once BG Group is integrated in 2017.
The company is pulling levers to increase its profitability in today’ oil market downturn and its earnings were actually a bit better than anticipated. Adjusted net income was 61 cents per ordinary share, 37 percent lower than a year before but much better than the analyst consensus of 46.5 cents. I feel my relatively large position in Shell carries an above-average risk in my portfolio but I believe the risk/reward makes it worth it.
I started dividend growth investing almost a year ago and it’s exciting to see the numbers are starting to get meaningful. Based on all current dividend announcements from the companies in my portfolio, I expect to receive a forward yearly dividend income of €167.9 plus $812.75 plus £67.2 in 2016.
Adding it all up this gives a dividend income of 1,001.51EUR for 2016 but the exact figure depends a lot on the currency exchange rates of course. The actual figure will probably be several hundred euros higher due to the new stock purchases, dividend reinvestment and dividend increases. The next major milestone is going to be 1,200EUR, as this corresponds to an extra income of 100EUR a month.
Congratz! 1k yearly dividend is a nice milestone to reach.
Thanks also for the short company update. I own shares as well and I look forward to get my first dividend after the august record date.
How big is rdsb in your portfolio? When will you consider it too big?
It’s around 21.24% of my total portfolio.
Interesting. Quite high indeed. Going forward, do you plan to have rules on this?
Dgi is in the back of my mind. I target 20-30 stocks. When the portfolio is there, I intend to limit one stock to about 7,5 PCT
Haven’t determined any hard rules yet but I think its percentage will decline a lot as I add more capital.
Hi Dividends are coming,
Nice buy, I like ( and own) Shell to. Altough this friday I bought some more ExxonMobil. Mainly to have not al my eggs in one O&G major.
Also congrats on reaching 1k in dividends.
Thanks. I considered other oil majors for diversification but haven’t taken the plunge yet as most others (with exception of BP) are double taxed and yield a lot less. Haven’t really taken a close look at XOM but at first glance its valuations are a lot more expensive than those of Shell.
Congratulations on the €1,000 milestone, huge number! Can’t wait to get up to that level myself.
I’ve been eyeing RDS again, but for the sake of diversification I will put my money some place else. If I decided to purchase some more oil it’s most likely going to be BP.
Diversifying is probably not a bad idea, my portfolio is currently overweight on two companies. I considered BP myself but in the end I’m still avoiding them due to the Macondo spill, overall I just like RDSB the most of the oil majors at this moment.