One new buy to close the month of January. I added 17 shares of Hershey’s (HSY).
Despite being the largest chocolate and confectionery company in North America, Hershey’s is barely known in Belgium as the firm has as good as no distribution in Europe so I’ve never sampled one of the company’s products. Contrary to major competitors like Mars, Lindt and Mondelez, Hershey’s focused on becoming the dominant company in its home market and largely neglected the international market.
US soldiers handed out a lot of Hershey bars during and after the second world war, which made them fairly well known in Europe, but the firm failed to capitalise on this. I’m working on a more detailed article about Hershey’s, it will probably be published the first or second week of February.
Either way, I believe Hershey’s is trading close to fair value right now and makes a good long-term holding. After taxes this purchase adds around 22.71EUR ($24.59) to my annual dividend income.
Which shares have you bought recently, or do you plan on buying in the short-term?
The last dividend payment of the month just hit my account so it’s time for the montly dividend income roundup report. Not a lot of my companies pay in January so there are just three payments, but two of them are fairly large.
- Philip Morris: 53.61EUR
- GlaxoSmithKline: 29.74EUR
- General Electric: 6.51EUR
In total, that’s 89.86EUR in dividend income for the month of January.
This is also the time of month I’m starting to think hard about my next dividend purchase. There are a lot of companies I still want to own a piece of, but usually things like a too high valuation or too much dividend withholding tax hold me back. Companies that fit this description include Brown-Forman, Nestlé, L’Oréal, Novartis, Roche, Lindt, etc.
I wouldn’t mind picking up some more Diageo but another company that’s on my radar right now is Hershey. The stock dropped a lot over the past year and looks attractive right now as a long-term holding.
The first week of 2016 certainly wasn’t kind to investors, quite a lot of my shares nosedived and the total return of my portfolio is once again barely in the green. My overweight position in energy and basic materials is to blame for this as these shares are all deep in the red. Looking back, I started buying this sector way to early but hindsight is 20/20 of course.
I started 2016 by buying 35 shares of Novo Nordisk (NOVO-B), the world leader in diabetes treatment. The annual report had been laying on my desk for a couple of months but once I took a close look at this firm I was so impressed by the firm’s financial performance and growth prospects that I decided to initiate a position.
You can read my analysis about Novo Nordisk over here:
Due to its low yield and the high dividend taxation, this purchase adds just 10.16EUR to my 2016 dividend income, but I anticipate the company will be able to grow its dividend at a good rate. There’s a tax treaty between Belgium and Denmark, but unfortunately this rate is not applied automatically so it’s not practical to recuperate the excess withholding tax.