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Dividend growth investor

May 2017 dividend income report

Another early dividend income post as there are no dividends in the queue for the back half of this month.

May 2017 dividend income:

  • AB InBev: 40.6EUR
  • Bristol-Myers Squibb: 4.9EUR
  • Van de Velde: 57.19EUR
  • YUM! Brands: 2.41EUR
  • Omega Healthcare Investors: 8.51EUR
  • Colgate-Palmolive: 3.45EUR
  • Kinder Morgan: 4.18EUR
  • Sanofi: 25.89EUR
  • Warehouses De Pauw: 1 new share valued at 83.44EUR + 59.7EUR cash = 143.14EUR

Adding it all up gives a total of 290.27EUR for May 2017, my highest monthly dividend income to date and 27.11% more than in 2016. All figures are after all applicable taxes and fees.

Like last year, I opted for WDP’s share dividend and received one extra share plus a load of cash. This extra share should increase my 2018 after-taxes dividend income by around  3.12EUR.

So far I haven’t added any new shares this month but I did publish an article about my position in NVIDIA. Since I bought the shares in November 2016, my NVIDIA stock has delivered a total return of 66.19! This makes it the second-best performing stock in my portfolio. Surprisingly, the best stock in my portfolio is McDonald’s, which is up 94.51 percent since I bought it 2.5 years ago.

I must say I’m a fan of the new McDonald’s premium burgers, nice step up in quality. Here’s a new variety that’s offered in Belgium:

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April 2017 dividend income report

The last April dividend hit my broker account this afternoon so it’s time for my montly dividend income report!

Here’s an overview of my April 2017 dividend income:

  • Nike: 4.50EUR
  • Coca Cola: 10.31EUR
  • Novo Nordisk (ADR): 21.81EUR
  • Diageo: 11.20EUR
  • Diageo (ADR): 31.51EUR
  • South32: 1.20EUR
  • PZ Cussons: 3.78EUR
  • GlaxoSmithKline: 28.71EUR
  • Philip Morris: 54.01EUR
  • General Electric: 6.52EUR

Now that’s a pretty large list this month and it sums up to a total of 173.55EUR in after-taxes dividend income. Last year my RDSB dividend arrived a couple of dates late and if I exclude that from the April 2016 income then I have received about 19 percent more dividend income in April 2017.

But May is going to be even better. There’s a large concentration of heavy hitters in May, which resulted in 228.35EUR in May 2016 dividend income. Some new names in my portfolio like AB InBev should push next month’s income even higher. My quick calculation point to a figure of just under 300EUR.

There were also some dividend increases this month:

  • Unilever: +12%
  • Omega Healthcare Investors: +1.61%

Omega Healthcare Investors keeps increasing the dividend every quarter like clockwork, while Unilever’s management made a new commitment to creating more shareholder value after they got the shock of their life with the out-of-the-blue takeover bid from Kraft-Heinz.

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Just a random Unilever product… go buy some!

How much was your dividend income this month?

New buy: Getting overweight on Novo Nordisk (NVO)

There are a lot of companies I’d like to own shares of but sadly most of them aren’t attractively valued at the moment. This is why I once again gravitated towards buying more shares of Novo Nordisk (NYSE:NVO).

Earlier this week I added 44 shares of Novo Nordisk to my dividend portfolio, which will give me an additional 22.97EUR in after-taxes annual dividend income.

Closing in on 1500EUR in yearly dividend income
According to my latest dividend income projection, I can look forward to an after-taxes dividend income of 1491.46EUR over the next 365 days. Unilever recently promised they would increase their dividend by 12 percent (the exact figure will be announced on April 20) so there’s a good chance my projection will exceed 1500EUR before the end of this month.

It’s still nowhere near financial independence but it feels great to have an extra 125EUR or so available every month to buy more shares.

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Claiming back dividend tax from the Danish…
One of the things I don’t like about Novo Nordisk is that the Danish government has a 27 percent dividend withholding tax. Despite all that’s being said about the so-called four freedoms of the European Union, this is all one big joke for small investors and especially for those living in Belgium as we can’t even deduct foreign withholding from our national dividend taxes.

There’s supposedly free movement of capital and there are tax treaties to limit double taxation but ironically it’s a lot easier to get the reduced withholding rate (15 percent) from the United States than from most fellow EU countries. To reduce the dividend withholding tax for US stocks you fill out a single form and you’re set forever. For most European countries, you have to deal with a lot of bureaucracy.

As Novo Nordisk is becoming an increasingly larger position in my dividend portfolio, I’ve started to look into how I can reclaim the excess dividend withholding tax. Belgium has a tax treaty with Denmark to reduce the dividend withholding from the standard rate of 27 percent to a reduced rate of 15 percent.  But like I said, this isn’t done automatically and it involves quite a lot of paperwork so most investors probably don’t bother to do this.

The biggest stumbling block perhaps is that you need a tax residency certificate signed and stamped by your local tax administration. It’s almost half an hour drive for me and they’re only open 9-12 A.M. on work days. I’m not entirely sure but I think you need a new form for every dividend tax reclaim application. I haven’t tried it yet, the Danish tax authorities give you  three years time to reclaim excess dividend withholding tax so at the moment I’m just making sure I have all the required paperwork tucked away in a folder on my computer.  I’m probably going to wait until after I’ve received Novo Nordisk’s interim dividend in summer 2018 to minimize the work involved.

March 2017 dividend income report

March has passed, winter is over and the weather in Belgium has been pleasantly warm the past week or so.  Perfect weather for the first bicycle trips as well as getting the garden back in order.

In terms of dividends it was a fine month, with a couple of dividend increases and total dividend income that was about 8.6% higher than the same month a year earlier. Here’s an overview of all the dividends I received in March:

  • BHP Billiton: 13.20EUR
  • Hershey: 5.88EUR
  • McDonalds: 5.26EUR
  • Novo Nordisk: 11.01EUR
  • NVIDIA: 1.46EUR
  • Royal Dutch  Shell: 72.6EUR
  • Unilever: 15.95EUR
  • Gilead: 4.58EUR

That’s a total of 129.94EUR in dividends for the month of March. As always, the figures I list above are after-taxes.

And here are all the dividend increases since last month’s report:

  • Moury Construct: +4%
  • Colgate-Palmolive: +2.6%
  • BHP Billiton: +185%
  • Coca Cola: +5.71%

A massive dividend increase from BHP Billiton as metal prices rebounded in 2016. The mining giant slashed its dividend severely a year ago but despite the big increase its dividend is still below the old level. Looking back, I’m glad I did not sell BHP Billiton nor Kinder Morgan when these companies cut their dividend as that was one of the worst moments to sell shares.

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BHP Billiton mine in Chile

It’s also interesting to see the total portfolio gain is now over 9,500EUR, it’s rapidly the five figure range.

How was your month?

Added some more Novo Nordisk (NVO) and a merger arbitrage play

With most markets trading at huge trailing P/E valuations due to capital flight, expectations of corporate tax cuts in the US and bubble blowing, it’s getting pretty hard to find companies to add to my dividend growth portfolio. I’m considering to build up some cash reserves but while I have no problem with letting my stocks compound silently without making any adjustments, I find it hard to just pile up cash to wait for opportunities.

In recent weeks I made two purchases:

  • 25 more shares of Novo Nordisk (NYSE:NVO). The company has a rough year ahead but is still a free cash flow machine, with zero debt and operating in a market that’s bound to grow as obesity and bad eating habits will not disappear. With a P/E ratio of around 15.7 it made a lot of sense to add some more shares to this position.  This may be my last purchase of this company for a while as this position as getting fairly large versus the overall size of my portfolio.

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  • 8 shares of Actelion (VTX:ATLN). This company isn’t really part of my dividend growth portfolio as it’s more of a merger arbitrage play. Johnson & Johnson (NYSE:JNJ) is in the process of taking over this Swiss biopharma company. JNJ offers $280 cash per share and shareholders also get one new share of “Idorsia”, a new R&D company that will house Actelion’s promising drug pipeline. It’s sort of a merger arbitrage play with a lottery ticket. The deal is expected to close in May and I will be watching this closely. There’s some currency risk for me because the offer is in USD but if the offer remains attractive closer to the end date I may invest a lot more capital in this. The ideal scenario for me is to get the Idorsia shares for free plus a little bit of cash.

Did you buy any shares recently?

February 2017 dividend income report, getting close to 60k

This update follows hot on the heels of my previous dividend income report, the month is barely halfway gone but there are no more dividends in the pipeline for me this month.

February 2017 dividend income

  • Kinder Morgan: 4.36EUR
  • Colgate-Palmolive: 3.50EUR
  • Omega Healthcare Investors: 8.71EUR
  • YUM! Brands: 2.47EUR

That’s just 19.04EUR in after-taxes dividend income for February 2017, a total well below my monthly average. I just updated my spreadsheet and based on current currency exchange rates my average monthly dividend income is now close to 120EUR. It’s still far from anything resembling financial independence but it would be high enough to pay the monthly power bills.

There just aren’t a lot of companies in my portfolio that pay a dividend in February and the ones that do are rather small positions or have a low yield. Next year should a little bit higher as I recently initiated a position in Bristol-Myers Squibb (NYSE:BMY) — and they happen to pay a dividend in February.

Dividend increases

  • WDP:+6%
  • Diageo: +5%
  • Gilead: +10%
  • Sanofi: +1%
  • Novo Nordisk: +19%

I expected YUM! China to announce its first dividend this month but that didn’t happen. The company’s CFO said a review of all available options for capital allocation indicated buybacks were not the best fit. Instead, the company will be doing buybacks. So this is the first no-dividend company that snuck into my dividend growth portfolio.

A dividend increase from Coca Cola is imminent, probably as early as tomorrow.

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One new buy

  • 23 Bristol-Myers Squibb (NYSE:BMY)

I added 23 shares of BMY about two weeks ago, a biopharma company that’s a leader in immunotherapy cancer treatment. My shares were bought just a couple of percentage points above the 52-week low. At the moment, this position is up 14.5% so I’m unlikely to add more shares to this position as it’s now less attractive than at the end of January. At the time I bought it, the stock traded at a 3.2% dividend yield with a sub-60% payout ratio.

Portfolio close to hitting 60,000EUR

With the Trump rally continuing, my portfolio is regularly hitting new all-time highs. The total value of my dividend portfolio is getting very close to the €60,000 mark, with the addition of some fresh capital I will probably blast through this level by the end of the month.

To keep up to date about my dividend investing journey you can follow me on Twitter. I try to post relevant tweets on a regular basis.

How was your month? Lots of dividends or new purchases?

January 2017 dividend income

Earlier today I received my dividend from General Electric, this closes out the month in terms of dividend income. Here’s a look at all the dividends I received this month.

January 2017 dividend income

  • Nike: 2.57EUR
  • Philip Morris: 53.66EUR
  • GlaxoSmithKline: 23.20EUR
  • General Electric: 6.62EUR

In total, that’s 86.05EUR in after-taxes dividends for January.

January’s dividend increases

  • PZ Cussons: +2.3%
  • Omega Healthcare Investors: +1.6%

New buys

  • 17 Nike shares
  • 5 AB InBev shares

I still have a couple of free trades that expire soon so I’m looking at another mini-buy in the coming days.

Books I’m reading
Last month I mentioned I was reading Shoe Dog, the autobiography from Nike founder Phil Knight. I finished the book a couple of weeks ago and I definitely recommend it to anyone who likes reading about startups and success stories.

In the first chapters, Knight details his trip around the world in his early 20s and explains how he worked up the courage to pursue his “crazy little idea”. He closed a deal with a Japanese shoe company and a couple of months later Knight’s company started selling Onitsuka runner shoes in the US.

I was surprised to read how many growing pains Knight experienced and how he juggled between a day job and managing his rapidly growing company on the side. He always took out as much debt as he could and lived on the edge to make his company grow as fast as possible. Despite high demand for the shoes, the company almost went bankrupt a couple of times due to debt and liquidity issues. Knight and his team of self-described “chronically unemployable” partners also had to deal with two major legal issues, including a lawsuit from Onitsuka as well as issues with the US government that nearly crippled the company.

The book ends with Nike’s IPO, which seems to be the moment things got better. Great read, well written and an interesting journey.

At the moment I’m reading Peter Lynch’s One Up On Wall Street, I started reading it a couple of months ago and picked it up again after finishing Shoe Dog. I’ve read about a third of this book, it offers some nice insights but could use a revision as it’s starting to get pretty old. For example, the book talks about SmithKline Beecham and this is a company that merged with Glaxo Wellcome to become GlaxoSmithKline in 2000. Little details I know but it makes the book feel a bit dated at times.

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20,000
As a closing note, congrats to the Dow Jones for finally hitting the 20k mark earlier today. It took over a month to take out this major milestone but finally the question of whether we’d see the US debt level top the $20 trillion mark first or see the DJ hit the 20,000 level first has been answered.

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How was your month?