It’s the end of the month again and that’s usually when I have some fresh cash available for my dividend growth portfolio. I enjoy adding income producing assets to my portfolio but one of the problems I often encounter is that it’s hard to make a choice of which stock to buy.
Given the relatively small sums I invest every month, I usually don’t want to split it into more than one purchase but as I still have quite a lot of free trades with my broker I may use some of these trades to perform some small mid-month purchases as there are quite a lot of big dividends incoming in the next three months or so.
This month I decided to expand my Diageo position. I already owned some London-listed Diageo shares but this time I decided to complicate things a bit by buying some of the Diageo ADRs on the NYSE. I have a slight preference for buying shares on their home market exchange but in this case the LSE was already closed. The fact that you don’t have to pay the 0.5% UK Stamp Duty if you buy ADRs of UK companies is worth the hassle of an extra line in my spreadsheets, especially as there don’t seem to be any fees involved with this ADR.
In the case of Diageo, each ADR represents four ordinary shares. I bought 11 Diageo ADRs (DEO) – which increases my after-taxes annual dividend income by £18.47 (23.61EUR). I like this stock a lot and may further expand my position in the coming months if it stays close to this price level.
I just had a look at my dividend calendar and the dividend of my existing Diageo position should hit my account around April 7th. Perhaps a good occasion to celebrate with a couple of shots of vodka like in the photo below 😉
My forward annual dividend income is now 1214.72EUR. It really feels like I’m treading water here as my forward annual dividend income is still lower than the figure I calculated in November 2015 despite a bunch of new stock additions since that date. Currency fluctuations, an increase in the Belgian dividend tax rate and two dividend cuts (KMI and BHP Billiton) are to blame for this.
Which stock(s) or other exchange traded assets did you buy this month?
Another early report as most of the dividends I received this month concentrated around the middle of the month:
- YUM! Brands: 3.93EUR
- Kinder Morgan: 4.43EUR
- Omega Healthcare Investors: 6.49EUR
- Colgate-Palmolive 3.46EUR
Overall a pretty lackluster month with just 18.31EUR of dividend income. Due to Kinder Morgan’s dividend cut, the total I received this month is less than the same month the year before. After the dividend cut, I thought about selling the stock but in the end I realized that the damage was already done. The stock did not turn out to be what I thought it was and has a more speculative profile, but given its small weight in my portfolio I decided to follow a wait-and-see approach and apply the lessons learned to future stock purchases.
Dividend increases (update)
This is also a month of several nice dividend increases:
- Novo Nordisk: +28%
- Warehouses De Pauw: +18%
- Coca Cola: +6.1%
- Diageo: +5.12%
- Sanofi: +2.8%
As promised, here is the Hershey article I talked about in one of the previous posts:
So far 2016 hasn’t been kind to my dividend growth portfolio, most of my stocks dropped significantly in value and in some cases this got amplified by the bounce in the euro. Maybe we’ll laugh about this next year but quite a lot of warning signs are going off right now, it kinda feels like it’s 2007 again. The only thing that seems to be going up this year is gold as people are getting increasingly worried and losing confidence in the central banks’ ability to handle this crisis.
Now it’s time to take a closer look at the results from L’Oréal that were published earlier today, they just rewarded shareholders with a 14.8 percent dividend hike!
A couple of days ago I published an article about Umicore, a Belgian company that offers an interesting mix of metal recycling (including precious metals) and clean tech like car catalysts and materials used to manufacture electric car batteries.
The company has been going through some growing pains and froze its dividends for 3 years, but today they announced a 20 percent dividend hike as things are looking up again.
You can read my Umicore article over here:
Overall, still a turbulent market but I’ve been happy with several recent dividend increases. Diageo recently raised its interim dividend by 5 percent and Novo Nordisk delivered another massive 28 percent dividend hike.