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.