November 2016 dividend income report and a small buy

Earlier today I received my interim dividend from Van de Velde, so this month’s dividend income is now finalized.

November 2016 dividend income:

  • YUM! Brands: 4.27EUR
  • Omega Healthcare Investors: 8.78EUR
  • Colgate-Palmolive: 3.58EUR
  • Kinder Morgan: 4.45EUR
  • AB InBev: 19.86EUR
  • Van de Velde: 37.45EUR

In total that’s 78.39EUR in dividend income for the month of November. I’m not sure if next year will be at the same level, I’m still a bit uncertain if AB InBev will keep its dividend at the current level. It would be smarter for the company to focus on reducing its debt at a more rapid rate by temporarily cutting the dividend to a lower level.

Additionally, I still regard the interim dividend from Van de Velde as a one-time item. The company is paying out all cash it doesn’t need to its shareholders. The base dividend is very safe but I’m not confident if they can keep the total dividend at the same level for much longer. As such, I do not include the interim dividend from Van de Velde in my 2017 dividend income projection to keep it a bit more conservative.

My 2017 dividend income projection

Earlier this month I adjusted my dividend income projection for the higher Belgian tax on dividend income (from 27% to 30%). Based on my current investments, the present dividend payouts, the current currency exchange rates and without taking any growth or reinvestment into account I reach a figure of 1364.56EUR. The mental goal I have in mind for 2017 is dividend income 1500EUR.

So far dividend income is increasing faster than what I modeled a year or two ago, primarily due to a higher level of savings. Increased taxation has been a major headwind, since I started with dividend investing the Belgian dividend tax increased from a level of 25 percent to 30 percent. Therefore I’m increasingly shifting my focus to stocks with lower yields, which will result in less future dividend income in favor of higher capital appreciation (which is still untaxed).

Another headwind is that in the short-term, the dividend growth potential of a lot of the stocks I’m invested in doesn’t look that good. Too many names in my portfolio with a frozen dividend or dividend growth that has decelerated to a low single-digit rate.

Recent dividend increases:

  • Nike: +12.5%

Another nice dividend increase from Nike this month.

One small buy: WDP

Since my last blog update I’ve allocated a bit more money to Warehouses De Pauw (EBR:WDP), a Belgian REIT specialized in industrial real estate like distribution centers and warehouses. Last week the company announced a capital increase, they created 190 million EUR worth of new shares to fund expansion plans. This includes 120 million EUR of pre-let investments in the Netherlands.

WDP also confirmed its 2016 outlook, the REIT is on track to deliver EPS of 5.30EUR and a dividend of 4.25EUR per share, which represents a 6 percent increase versus last year. The 2016-2020 growth plan calls for a portfolio growth of 1 billion EUR — of which they already secured 330 million EUR. For book year 2020, this should result in 25 percent earnings per share and dividend growth versus book year 2015.

I participated in the capital increase, five more shares of WDP will find their way to my account on November 28. These shares were issued at a price of 75EUR, a 6.7 percent discount versus the closing price before the capital raise announcement was made.

wdp_growth_plan.png

How was your month?

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12 thoughts on “November 2016 dividend income report and a small buy

  1. ambertreeleaves

    Another nice month. I do like the realism in your thinking.

    Abinbev is on my list to watch. I started writing puts to get some income. At the current dividend, I am OK to buy at 90. Not there yet.

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    1. Dividends Are Coming Post author

      Selling puts to generate income is still on my to-do list. I want to try it someday but usually I find the minimum commitment of 100 shares a bit too large, especially with stock prices above $40-$50 a share.

      My wife is also looking to buy AB InBev at a cheaper price, I believe she has a buy order in the low 9xEUR range.

      Liked by 1 person

      Reply
      1. ambertreeleaves

        The worst case is indeed a 8800 euro commitment – I have a 88 strike put. That is a lot of money and might not fit in the portfolio.
        So far, I gave had once a put assignment… I gave a big paper loss. I do keep my faith in the stock for the medium term.

        Liked by 1 person

  2. DivHut

    Thanks for sharing your recent dividend income update. Slowly but surely that passive income keeps rolling in, even if some payments may be one time distributions. I started looking at BUD recently as a potential buy. Seeing AB InBev reminded me of that stock. I used to own BUD years ago before it was bought out and now prices are starting to look attractive once again. Always enjoy reading these reports.

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    1. Dividends Are Coming Post author

      Nice, must have been at least 8 years ago. It was probably quite a shock for a lot of Americans at the time to see Anheuser-Busch getting taken over by a Belgian-Brazilian company that was barely on anyone’s radar a couple of years before that.

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  3. Mattias

    I am hesitant to commit to DGI because of negative tax evolutions for dividend investors. I see the tax still increasing to 33% in the coming years. In these circumstances I’d rather have the dividends build up in an non-distributing ETF. I think in the long run the gap will grow too wide.

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    1. Dividends Are Coming Post author

      Indeed, dividend investing in Belgium isn’t easy due to high taxes as well as double taxation because a lot of interesting shares are found abroad. On the surface, investing in ETFs that capitalize the dividends seems better but I don’t think it’s a good match for me.

      Too boring and I don’t like the idea of buying a broad basket filled with companies or sectors I have no interest in. With a P/E of 25 (thus an earnings yield of just 4%) it also doesn’t look like a good time to pour money into an S&P500 ETF like AMS:CSPX.

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