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.
How was your month?