June dividend income report and the Idorsia spin-off

It’s the end of the month so here’s my latest dividend income report!

June 2017 dividend income

  • Unilever: 17.37EUR
  • NVIDIA: 1.40EUR
  • Hershey: 5.55EUR
  • Moury Construct: 36.40EUR
  • McDonald’s: 5EUR
  • Royal Dutch Shell: 68.79EUR
  • Gilead: 4.31EUR

In total that adds up to 138.82EUR in dividend income this month. As always, the figures I list are after all taxes and applicable fees. This is the fourth month in a row this year of triple-digit dividend income.

New purchases
Since my last report I added shares of Nike as well as AB InBev.

Actelion spin-off Idorsia off to a good start
As I wrote a couple of months ago, I bought shares of Actelion as a merger play. The company got acquired by Johnson & Johnson and shareholders got $280 in cash per share plus one share of the new spin-off R&D company called Idorsia. At the time I bought the shares it seemed like a good way to earn some cash plus get some free shares of a new company.

The offer was in US dollars so unfortunately the cash part worked out less favorable than expected due to the rising euro. Instead of a minor gain of a couple of percentages, I ended up with a 35.67EUR less than my original investment in Actelion.

Fortunately, it seems the new Idorsia spin-off is worth a lot more than expected. The company went public for 10CHF per share two weeks ago and is now trading at 17CHF! That’s a 70 percent gain in less than two weeks which tips the balance to a total gain of 4.3% for my four-month investment in Actelion.

Part of the astronomical rise is attributed to some large purchases. Actelion co-founder Jean-Paul Clozel (who now leads Idorsia) started with a 15.12 percent stake on the day of the IPO and has been using the cash he received from Johnson & Johnson to steadily increase his stake. According to the latest disclosure, Clozel and his wife now own 22.84 percent of Idorsia. Talk about a great vote of confidence!

Anyway, I now own 8 shares of Idorsia which I plan to hold for a long time. They’re not worth much at the moment but hopefully the company strikes gold with its R&D pipeline.

idorsia

How much dividend income did you receive this month?

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Going solar?

So  yesterday’s green post from Amber Tree Leaves inspired me to write up a little green post of my own. One of my next investments this year may be solar panels. Over the past decade,  I’ve switched my position on renewables from a critic to a believer in the long-term potential of wind and solar energy.

Technological progress and scale of economies have dramatically reduced the cost of renewables. I’ve always considered 1EUR per Watt-peak an import psychological barrier and that’s roughly where we are right now for DIY kits as prices dropped to less than a quarter of what they were a decade ago.

Unfortunately, the payback time is still a bit longer than I’d like it to be. This is primarily because the Flemish government charges a big tax on solar installations that are connected to the power grid.

The position of our government on solar energy is pretty weird to say the least. On one hand the government wants a lot more renewables because of the commitment to the EU 2020 goals but on the other hand they’re heavily taxing residential PV systems to fill holes caused by over-subsidizing solar in the past.

During the solar boom in our country new installations were extremely over-subsidized in Flanders but now we’re in the opposite situation where there are no subsidies and owners of PV systems need to pay a tax to use the grid as a “battery”.  As in many other areas, government fucked up hard and created an unstable and uncertain investment climate.

Under somewhat optimal conditions, I think it’s possible for the PV system to pay back itself within nine years. But a lot depends on the future (and constantly changing) legal framework.

pvpanels

What green investments or other things do you do?

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.

benjerries

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.

Base Metals_Escondida_Large (1)

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.

novonordiskmarch

  • 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?