July 2017 dividend income report and new buys

This afternoon I received my last dividend for the month of July so it’s time for my montly report 🙂

July 2017 dividend income:

  • Coca Cola: 9.65EUR
  • Nike: 4.23EUR
  • Philip Morris: 49.85EUR
  • GlaxoSmithKline: 22.63EUR
  • General Electric: 6.09EUR

Those who regularly read this blog probably already know this but all earnings listed above are after all applicable taxes. In total, the July 2017 income adds up to 92.45EUR so this breaks my four-month streak of +100EUR reports.

Dividend increases:

  • Omega Healthcare Investors: +1.6%
  • PZ Cussons: +2.0%

Dividend promises from Kinder Morgan!
Kinder Morgan released its earnings this month and promised investors that it aims to significantly increase its dividend the coming years. Back in 2015, pipeline company received a lot of flack as its debt situation forced it to cut its dividend by a massive 75 percent. This was a hard pill to swallow for a lot of investors as many had bought the stock for the combination of a high starting yield and the promise of high dividend growth. Instead of 10 percent yearly dividend growth through 2020, the rapidly deteriorating market situation resulted in a dividend cut from $2.00 to $0.50 per share.

Reducing debt became a priority and the firm is now projecting net-debt-to-adjusted EBITDA of  ~5.2 by year-end. That’s still pretty high but Kinder Morgan deems this is low enough to boost its dividend. Kinder Morgan promises it will raise its dividend in Q1 2018 and targets a total dividend of $0.80 per share for 2018. If things go well, this should climb to $1.0 in 2019 and $1.25 in 2020.

2018 government budget to contain nice treat for Belgian DGIs?
The Belgian government is once again reviewing policy and trying to figure out next year’s budget. The last couple of years this was bad news for Belgian investors as our government gradually increased the dividend tax from 25 percent to 30 percent. They also introduced a tax on speculation but that silly tax has already been repealed as it actually hurt the budget (because people changed their behavior which resulted in lower stock market transaction tax).

Anyway, this year there are two investing-related fiscal measures on the table. Prime minister Michel (MR) thought he could get an easy deal by giving each of the four parties in our government a treat.

First up, the Christian democrats (CD&V) still want a “fair tax” trophy and our prime minister thought he could meet this demand by proposing a tax on stock market portfolios. From what has leaked to the press, the proposal called for a tax on portfolios with more than 200,000EUR in assets. The Flemish liberals (Open VLD) fear this tax (or future iterations of it) will hurt the middle class and the Flemish nationalists (N-VA) are also against it. As such, budget talks between the four parties that make up the Belgian government are once again very tough.

Now you can hardly make this stuff up, but Michel’s deal also includes a treat for investors. Belgian is a country of savers but very few people invest in stocks. Open VLD wants to change this by encouraging people to invest their savings. At the moment, interest income of up to 1880EUR a year from regulated savings accounts is not subject to taxes. The idea here is to expand this policy to other investments like stocks.

In the current low-interest environment, this would stimulate people to invest in dividend-paying stocks. My current 2018 net dividend income projection is around 1500EUR but this fiscal measure could take it over the 2000EUR mark. It’s too early to celebrate as it may not make it into the final 2018 budget, but if it does it would be a massive dividend increase for me!

New buys
Since my last dividend income report, I’ve expanded my position in drug maker Gilead (GILD) and initiated a position in Danish wind turbine maker Vestas Wind Systems (CPH:VWS). That marks my first dedicated investment in renewable energy.

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Which stocks did you buy this month?

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10 thoughts on “July 2017 dividend income report and new buys

  1. ambertreeleaves

    My confidence in the government s low. They fail to keep the tax system stable and that makes it hard to plan. This year, I have not yet contributed to my long term savings account for that reason. Look at the pension saving. Each year they take 1 PCT and promise to take it into account when we reach pension age. Actually, they borrow from a future government. They will see less income and will need to take action.

    Do like a household: cut spending

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    1. Dividends Are Coming Post author

      Agreed, it’s hard to look ahead as the rules are constantly changing and various taxes are going up almost every year.

      Details of the summer deal were presented this morning and It does feel like the Belgian government is finally giving something back to small investors. Starting in 2018, the first 627EUR in dividends a Belgian investor receives will no longer be subject to dividend tax. Unfortunately, this will be handled via the tax return so you will need to wait for your money until late 2019 and it will further complicate doing your taxes. In my case, that means an extra 188EUR a year based on my current understanding of how it will be implemented.

      But I’m mad they once again increased the tax on stock market transactions. The new rate will be a huge 0.35 percent – that’s more than double as much as in 2011. This is getting ridiculous.

      The tax on investment portfolios is also another monstrosity. It only applies to people with portfolios with a value of over 500,000EUR but there’s still conflicting information about how it will be calculated. Either way, this seems like a repeat of the failed speculation tax.

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  2. CrossCountry

    Strong month! Now I’m really crossing fingers for the Government to take action… Would be amazing news for Belgium DGI’s but my hopes are still not very high. Let’s see 🙂

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    1. Dividends Are Coming Post author

      Thanks 🙂

      Details of the summer government deal were announced this morning, I briefly discussed some of the investing related topics in the comment above. Sadly, the dividend part is limited to 627EUR instead of the 1880EUR figure that circulated earlier this week. Belgian investors will thus be able to reclaim up to 188.1EUR a year (30% tax of 627EUR) via their tax returns.

      There’s some improvement but overall I’m disappointed as other parts of the deal really annoy me.

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  3. Dividend Diplomats

    Continuing to make some moves DAC. Love seeing the large dividend payments from PM to GSK, two stocks that I hold in my portfolio. Keep up the great work and lets hope that KMI follows through with our promises.

    Bert

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