Last week I was still struggling about the stock selection for this month’s purchase but thanks to the arrival of a bit more capital than expected, and some free trades from my broker, the choice was easier than expected.
Instead of just one purchase, like I usually do, I added shares to an existing position and further diversified my portfolio with two new positions.
- Diageo (LON:DGE): I added 25 more shares to my existing position. A month or two ago I wrote a SA piece about the company’s dividend history, it’s well on its way towards becoming a UK dividend aristocrat. At the current share price, Diageo approaches my sweet-spot pre-tax dividend yield of 3 percent.
- PZ Cussons (LON:PZC): I bought 174 shares of PZ Cussons, that sounds like a lot but it’s because the company has a pretty low share price. PZ Cussons is a more focused, small-scale version of bigger consumer giants like Unilever and P&G. This UK-based company is not well known but has a very large presence in emerging markets. As I mentioned in my recent SA article about PZ Cussons, it has a 42-year dividend growth history and currently trades at a dividend yield of 2.79 percent.
- Sanofi (EPA:SAN): Last but not least, I bought 15 shares of French biotech/pharma hybrid Sanofi. I want more exposure to the healthcare sector and I think Sanofi offers an interesting entry point right now. As I wrote a couple of weeks ago, Sanofi’s recent dividend growth has been pretty low but the company offers an interesting pipeline and an enticing 3.56 percent entry-yield.
In total, these three purchases add an estimated 54.25EUR to my 2016 dividend income, bringing my 2016 forecast to 1183EUR — excluding unannounced dividend increases/cuts and currency exchange fluctuations.
Despite the new purchases, the new 2016 forecast is quite a bit lower than last month’s 1240EUR forecast. There are a number of reasons for this though, one of the biggest being the 75 percent dividend cut by Kinder Morgan. Secondly, the euro strengthened a bit versus the dollar and the pound, and I also updated my spreadsheet to account for the 2 percent increase in dividend taxation levied by the Belgian government.
That’s all for 2015 folks. I wish you all a very healthy and prosperous 2016!