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?
Celebrating a the dividend with wodka is somehow reinvesting it back into the company! Enjoy the drinks.
Having 2 dividend cuts is a tough one. From what I read on these companies, it seems to be the good move to make to secure the future.
For February, we bought our global tracker at a good discount compared to our cost basis.
There’s a Smirnoff Gold bottle like the one in the photo catching dust in our (tiny) liquor cabinet. Bought it for the wife but she doesn’t like the cinnamon taste. I think it’s the only Diageo product in the house so it’ll have to make do 🙂
The two dividend cuts were unpleasant but not entirely unexpected. What did catch me by surprise was the big size of the cuts
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Don’t own DEO right now but would love to get our hands on some soon. It’s just too expensive to convert CAN to US right now… 😦
I’m not very familiar with the USD/CAD, in my case I still feel comfortable investing in USD assets vis-a-vis the economic and (geo)political advantages of the US over the EU and the fact that most of my net worth is already tied up in EUR assets (savings, the equity in my home, etc.). I expect that versus the euro, the US dollar will get stronger still. In case of firms like Diageo (and many multinationals) it gets more complex as this British multinational has a bit of exposure to its home market but a lot to North America, the rest of Europe and emerging markets.
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I like DEO. I don’t own any shares yet. I’m still waiting for a dip in this sector. However, I think DEO is a great long-term stock. People are not going to just stop drinking. I know I’m not 🙂
Indeed, people are unlikely to stop drinking and the sector is fairly recession proof.
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