Top 10 stock positions July 2019

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This month not much happened in the top 10 positions I hold in my portfolio. In general it was a good month for stocks. The S&P 500 changed this month +6,9%.

AbbVie increased from 10th biggest position to 3rd position. This is because I decided to purchase 10 shares AbbVie after the price dropped as a result of the takeover of Allergan.

Macerich dropped out of the top 10 and got replaced by Alibaba. Value of Macerich dropped 6% this month. It’s a funny coincidence that Macerich gets replaced by Alibaba, because prices of REIT stocks in underpressure because of eCommerce threats and Alibaba is one of the tech giants who are big in online retail.

The value of my Facebook position increased 11% and is this month in the top 10 the biggest value increase.

The Top 10:

#changeNameSectorValue (€)
1(-)Royal Dutch ShellEnergy5.368
2(-)EnbridgeEnergy3.171
3(+7)AbbvieHealthcare2.876
4(-)ASML HoldingTechnology2.756
5(+1)FacebookTechnology2.715
6(-3)Macquarie InfrastructureIndustrials2.633
7(+2)DSMBasic Materials2.500
8(-)GivaudanBasic Materials2.477
9(-2)UnileverConsumer Defensive2.410
10(new)Alibaba GroupConsumer Cyclical2.383

10 dividend stocks adviced by Van Lanschot Bank Part 2

A few days ago I coverred the the first 5 dividend stocks adviced by Van Lanschot Bank. In this article I will cover the 2nd 5 adviced stocks.

6. Bayer:

  • Dividend: €2,80
  • Yield: 4,68%
  • Payout ratio: 180%
  • 5 Yr Div Growth: +24%
  • Payout Frequency: yearly
  • P/E: 58,27
  • ROE: 2,32%
  • ROA: 2,48%
  • Current price vs. 52 weeks high: -39%

I already have Bayer in my portfolio. The stock price and EPS is under pressure as a result of a judgment by a court of first instance in the United States in connection with glyphosate / Roundup. The potential claims to be paid regarding Roundup is keeping the stock price of Bayer under pressure.

The market capitalisation of Bayer declined from €86B at the start of 2018 to €54B this year. After the judgement I decided to start initiate a position in Bayer. I don’t expect that the price will recover short term, but at a yield of 4,68% I don’t mind waiting for better times.

7. Intertrust:

  • Dividend: €0,65
  • Yield: 3,55%
  • Payout ratio: 65%
  • 5 Yr Div Growth: N/A (only 3 listed since 2015)
  • Payout Frequency: twice per year
  • P/E: 18,27
  • ROE: 12,17%
  • ROA: 4,89%
  • Current price vs. 52 weeks high: -2%

Intertrust is best known for its fiduciary services, which includes tax, trust, business management and outsourcing processes. It is the largest trust office in the Netherlands, measured by number of shell corporations managed. So a lot of tax is avoided optimalized by services of this company.

There is a steady demand for the services of Intertrust and they service 50% of the fortune global 500 companies.

8. Ahold Delhaize:

  • Dividend: €0,70
  • Yield: 3,50%
  • Payout ratio: 45%
  • 5 Yr Div Growth: 46%
  • Payout Frequency: yearly
  • P/E: 12,96
  • ROE: 12,52%
  • ROA: 4,27%
  • Current price vs. 52 weeks high: -16%

Ahold Delhaize is based on supermarket marketshare the 4th supermarket of Europe and the 5th in the United states. Ahold Delhaize is operating over 6.500 stores and is also operating several eCommerc formats.

I’m myself a loyal customer of bol.com an online retailplatform owned by Ahold Delhaize. Just as many other retailers the price of Ahold Delhaize is often under pressure by fears of eCommerce hurting the sales.

9. HP Inc:

  • Dividend: $0,64
  • Yield: 3,07%
  • Payout ratio: 25%
  • 5 Yr Div Growth: 143%
  • Payout Frequency: quarterly
  • P/E: 8,59
  • ROE: n/a%
  • ROA: 8,28%
  • Current price vs. 52 weeks high: -22%

At position 9 it’s the first American company on the list of Van Lanschot Bank. Van Lanschot is advicing HP for it’s strong position in the high-end printer technologie.

10. Roche:

  • Dividend: CHF 8,70
  • Yield: 3,21%
  • Payout ratio: 71%
  • 5 Yr Div Growth: 9%
  • Payout Frequency: yearly
  • P/E: 21,52
  • ROE: 36,6%
  • ROA: 15,22%
  • Current price vs. 52 weeks high: -7%

Roche is a pharma giant with a strong position in the market. The ROE they are able to earn on their equity is very impressive.

10 dividend stocks adviced by Van Lanschot Bank Part 1

I’m following various news sources to stay informed about developments in the market. This week I read an article in the eMagazine of Van Lanschot Bank were they are coverring 10 dividend stocks they consider attractive at this moment. Disclaimer: Van Lanschot is a Dutch bank so the article is in Dutch.

Often these kind of articles are not really giving me any new insights, but this article was refreshing. The reason I consider this article refreshing is that it has a lot of European stocks in their list of top 10 attractive dividend stocks.

On the internet it’s really easy to stay informed about American stocks, but it’s way more challenging to find nice articles about European stocks.

Inspired by this article I decided to take a look at the companies listed in this article. I will cover the 10 stocks from the list below in several posts.

I will cover the 10 companies on the Van Lanschot list in 2 articles and will also add a follow up where I compare these companies with comparable companies in my portfolio.

The comparison is for challenge myself in determining if the comparable stocks I have in my portfolio are still of the same quality level as I when I made the purchase decision.

1. UBS Group AG:

  • Dividend: CHF 0,70
  • Yield: 5,91%
  • Payout ratio: 65,4%
  • 5 Yr Div Growth: +40%
  • Payout Frequency: yearly
  • P/E: 11,1
  • ROE: 7,61%
  • ROA: 0,43%
  • Current price vs. 52 weeks high: -28%

This stock indeed looks attractive on first glance. I will add UBS Group to my watchlist. I’m curious how this stock will compare with other banks in my portfolio.

The yield is attractive especially, but the payout ratio is somewhat high I think. I didn’t know that return on assets of a bank is this low.

I have 6 banks in my portfolio so I’m curious how the financials of UBS compare with the financials of the banks I already own.

2. Royal Dutch Shell:

  • Dividend: € 1,65
  • Yield: 5,73%
  • Payout ratio: 58,3%
  • 5 Yr Div Growth: 0%
  • Payout Frequency: quarterly
  • P/E: 10,2
  • ROE: 11,97%
  • ROA: 5,02%
  • Current price vs. 52 weeks high: -6%

I have Royal Dutch Shell in my portfolio. It’s actually my biggest holding. Actually there are only 3 companies in my portfolio which resulted in a higher profit than Royal Dutch Shell.

It’s a steady company and bringing in a nice steady flow of dividends. The only thing I would like to see is an increase in dividend.

3. Banco Santander:

  • Dividend: € 0,23
  • Yield: 5,45%
  • Payout ratio: 53,1%
  • 5 Yr Div Growth: -61%
  • Payout Frequency: quarterly
  • P/E: 9,6
  • ROE: 8,48%
  • ROA: 0,62%
  • Current price vs. 52 weeks high: -15%

Again a bank just as UBS Group where the payout and yield is looking attractive. I’m not understanding yet why the 5 year dividend growth is negative.

Scrolling through annual reports I see that the dividend got reduced after issuing new shares to increase the capital, but I can only find a reduction from 60 to 40 cents. All other metrics are looking comparable with UBS Bank Group.

Part of the dividend is paid as stock dividend.

4. Schlumberger:

  • Dividend: $ 2,00
  • Yield: 5,11%
  • Payout ratio: 138%
  • 5 Yr Div Growth: +20%
  • Payout Frequency: quarterly
  • P/E: 28,0
  • ROE: 5,62%
  • ROA: 2,72%
  • Current price vs. 52 weeks high: -42%

Nice yield, but if I take a look at the profit figures of last few years this company is feeling to cyclical for me. After reading their website I still don’t really have a good insight in what they exactly do and why they are unique in this. Not putting this one on my watchlist.

The payout is above 100% for a few years so I’m not sure how safe the dividend is. Bert from DividendDiplomats has a interesting article about the question if Schlumberger’s dividend is safe.

5. Telefónica:

  • Dividend: € 0,40
  • Yield: 5,41%
  • Payout ratio: 66%
  • 5 Yr Div Growth: +14%
  • Payout Frequency: yearly
  • P/E: 12,1
  • ROE: 11,52%
  • ROA: 2,98%
  • Current price vs. 52 weeks high: -8%

I don’t have a telecom company in my portfolio yet so I’m definately interested to add one if I see a nice opportunity.

The reason why I don’t have a Telecom company in my portfolio is that most of them don’t show impressive dividend growth. Also Telefónica only raised their dividend with 14% in a 5 year time frame.

The ROE and P/E is attractive, but I tend to like it more to add stocks which are preferably well below their 52 weeks high.

Later this week I will add part 2 of this article. If you have any comments about these 5 companies or if you know a better alternative please let me know.

Mid-year review 2019

Recap:

  • Deposited €7.500 versus a half year target of €7.200. On track!
  • Received €2.517 in dividends versus a half year target of €1.817. On track!
  • Extra repayment of mortage €2.600 above regular monthly terms.
  • Realized profit due to writing options of €433,45
  • Estimated dividend income 2019 at €4.300

Deposits:

My target monthly deposit I set at €1.200 this year. I didn’t really deviate from this plan so with with €7.500 transferred to my stock account I’m €300 above the mid-year target.

Dividend Income:

I received almost 40% more dividend than I expected. At the end of 2018 I calculated my expected dividend income based on my stock holdings at the end of the year.

At the end of 2018 / begin 2019 I did initiate a few short put positions and I used the received option premiums to invest in shares. As a result I have more money invested in stocks than I expected when calculating my expected dividend income.

As a result of the option premium invested in stocks my estimated dividend income this year is now €4.300 instead of the original target of €3.500.

Extra mortgage repayment:

In May I repayed €2.600 extra on my mortage. This is repayment above the regular monthly terms I pay.

I like seeing my mortgage debt going down faster than planned, but I don’t realize a big interest saving by this extra repayment.

Until 2026 the fixed interest rate on my mortgage is 1,99% so as a result of the extra repayment I save a whopping €51,74 in interest per year. As it’s in The Netherlands possible to deduct paid mortgage interest from the tax to be paid I’m actually only saving€25,87.

Nevertheless I like it to make the balance of this debt go down. Although interest rates are low now there’s always a risk that the next time the fixed interest is expiring that it’s at a time where rates are higher.

Option Income:

In the first 6 months of this year I realized profit of €433,45. I did write a decent amount of options end 2018 / begin 2019 with different expiration dates.

This is increasing the risk and volatility of the value of my portfolio, but it also gives the opportunity of extra income.

Fact Five:

  • Largest Position: Royal Dutch Shell (€5.408)
  • Biggest dividend payer: Royal Dutch Shell (€311)
  • Estimated dividend income 2019: €4.322
  • Biggest sector in my portfolio: REIT (18,3%)
  • 59 different companies in the portfolio

Targets 2nd half year:

  • 2 months only depositing and not buying shares, because I used a small credit to make some opportunistic purchases at market dips.
  • Focus on buying European stocks, because USA stocks are expensive at current valuation and USD/EUR exchange rate
  • Analyze my portfolio to check if the current sector allocation is balanced
  • Thoroughly keep track of the risk related to the short put positions and adjusting whenever necessary.

Final Thoughts:

I’m confident that I will reach the increased target of €4.300 in dividend income. I’m curious how the market will develop in the 2nd halve year. It now feels like the market is at a high valuation, but with trade war and interest developments can result in volatility.

In July many companies will publish their half year results. Based on the publication of half year results it’s also possible that stock will react strongly. At the current valuation lot’s of good news already seems to be included in the price.

Also it’s possible that the half year numbers will be good, but that prices will go down substantial if a company is publishing a conservative outlook. I already saw this happening with various companies publishing good results, but combined with a sober outlook.

It’s always interesting to see how stock markets are reacting on news, but as investor who holds stocks for the long term it’s normally not something what is bothering me.

20% Dividend Increase Bank of America

bac

Recently Bank of America announced that the quarterly dividend will be increased by 20%, beginning the 3rd quarter of 2019. BAC also announced a $30.9B share buyback program. This is around 11% of the outstanding shares based on todays shareprice.

As a result of the 90 shares I have my yearly estimated dividend income will increase with $9,73.

Based on the new dividend my yield on cost will be 2,78%.

June 2019 Dividend Report

After having a few record breaking months June is a relatively calm month again. I received €425,87 in dividends. This is an YoY increase of 91,5%!

This month I received payments from 13 companies. The 3 biggest payers in June are for me Royal Dutch Shell, Macerich and Enbridge.

I also realized €202,75 in option premiums income. I got lucky this month in timing a coverred put on Colruyt. I shorted 100 shares Colruyt and also sold a put at a strike of €64. A few weeks later Colruyt dropped over 20% as a result of the sober outlook the publiced regarding the next bookyear.

As a result of the 20% price drop I got 100 shares delivered from the short put so I took the maximum profit for this construction in a few weeks time. Of course I could have have made more money without writing the put, but I was expecting the stock staying in a tight price range as it did last few months.

This was for me the first time I experimented with a short stock position. I can’t say that I did feel comfortable with it. It was a position which was often making me worry, because I don’t have the feeling that as private investor I can easily make money with short positions.

The cost for borrowing the stock I didn’t know upfront and is variable based on how asked a certain stock is among short sellers. It also did make me feel that the market ‘works against me’. Last month the stock market in general was up. It gave me the feeling that I could easily lose a lot of money if the stock would increase with a few percent.

I totally don’t have any worries about the stocks I own or the few naked short put positions I have, because I can estimate the risk of the naked puts, but the risk of rising stock prices or a takeover of a stock which is shorted not gives me a comfortable feeling.

So for now I decided that I won’t short any stock soon. Any position in my portfolio shouldn’t give me the feeling that it could potentially have a to big impact on my portfolio value if the bet is wrong.

Dividend Income – € 425,87:

Royal Dutch Shell77,68
Macerich53,33
Enbridge48,97
Aegon40,50
DSM35,19
Think AEX UCITS ETF27,56
Dominion Energy24,36
Unilever18,47
Qualcomm16,33
AGNC Investment14,99
Johnson & Johnson12,71
Bank of America11,85
McDonalds11,36
Monmouth REIT11,35
Boeing10,87
EPR Properties10,35

Option Income – €202,75:

  • 2x AGN P4.30 21JUN19 – €24,60
  • 1x COL P64.00 21JUN19 – €178,15

Transactions:

Dividend Changes:

2019 Target Status:

  • I’m at €7.500 out of €14.400 deposit target (52,1%)
  • I’m at €2.517,28 out of €3.500 dividend received target (71,9%)
  • I’m at €433,45 income from writing options
  • I’m at €2.600 in extra mortgage repayments

Purchase 10 shares AbbVie

Last week I bought 10 more shares of AbbVie at a price of $67,77. After AbbVie announced the purchase of Allergan, the stock price tanked as a result of the premium paid for the takeover.

I decided to add 10 more stocks AbbVie to my portfolio. As a result of this purchase I now own 45 shares AbbVie.

By making this purchase my average purchase price of AbbVie stocks declined from $82,84 to $79,50.

As a result of buying 10 more shares my yearly estimated dividend income will increase by $42,80. Based on the new average purchase price the new yield on cost for me is 5,38%.

I Want Dividend: Summer Special!

Today it’s a nice 28 degrees Celcius in The Netherlands. While waiting at a traffic light I was thinking about my stock portfolio. With nice sunny weather outside I was thinking what ‘summer stocks’ I have in my portfolio.

With summer stocks I mean stocks which offers a product or service which is enjoyed by people on warm summer days. This inspired me to write a Summer Special post and share with you the companies in my portfolio which let me profit from the holidays of other people.

1: Aegon (yield 7,32%)

Aegon is a dutch based insurance company. Aegon’s mainly generates income by selling life insurance.

As us Dutch people often have travel insurance to cover theft or hospital costs occuring abroad it’s makes for me that Aegon deserves a place in the Summer Special.

I have a travel insurance myself, but I’m guilty of having it at a company in which I don’t have any shares.

2: Tencent (yield 0,31%)

I wasn’t sure if I should list Tencent in this list. This was to be honest more, because as person I’m not well informed about their products. I still listed Tencent in this list, because I didn’t have any doubts about listing Alphabet or Facebook in this list.

Tencent deserves a mention as summer stock on this list, because Chinese people can post their fantastic pictures they make while being in The Netherlands on the social media platforms QQ and WeChat.

Also I assume that if Chinese people are doing research about beautiful locations in The Netherlands that they will also get stalked by targetted adds promoting holiday trips to The Netherlands.

I could also say that Tencent is a summer stock from the games they own. I guess many people are spending extra time on games during the summer holiday (partially) owned by Tencent like Fortnite, PUBG and Clash of Clans.

As far as I know I’m not a user of any of the services offered by Tencent, but I love telling to the son of my girlfriend who loves playing Fortnite that I’m one of the owners of Fortnite 😉

3: l’Oreal (yield 1,60%)

I gave l’Oreal a place on this list, because of the sun care articles they sell. When going on a holiday to a sunny location it’s a good idea to protect your skin by using high SPF sunscreen to protect the skin from the sun.

I’m a customer of l’Oreal myself and when I go on holiday there is for sure some l’Oreal sunscreen in my bag.

4: Altria (yield 6,52%)

Altria is one of the largest producers of cigarettes. Personally I don’t care about their products. Maybe their products even annoy myself, because I don’t like smelling smoke when sitting on a terrace enjoying a cool drink.

When I’m on the airport I see many people taking advantage of the tax-free shops and buying a few boxes of cigarettes. So I guess for many people visiting the tax-free cigarettes shop at the airport is part of their holiday routine.

5: Amazon.com (yield 0,00%)

Amazon sells almost everything: travel guides, suitcases, inflatable swimming pools, summer cloths, sun glasses and way way more.

For being a great site to visit to buy all kind of summer articles Amazon deserves a place on this list.

6: Danone (yield 2,72%)

Come on Erik! Danone is just a boring dairy company. Yoghurts is not really a holiday food!

Well, France is the most popular holiday location for Dutch people. I also love going to France. I really love the Provence area. It’s almost always sunny in the south of France and when it’s sunny I want to have some cool water to drink: Evian.

Evian is one of the many water brands owned by Danone and it qualifies Danone as summer stock.

7: Coca Cola (yield 3,26%)

I love cold cola on a hot day. Let me walk some time in the hot sun and Coca Cola is really refreshing me.

To stay more healthy: Coca Cola is also owning dozens of water brands all over the world. In The Netherlands and Belgium Coca Cola is owning the Chaudfontaine water brand. I enjoy drinking their carbonated waters on hot summer days at home.

Coca Cola is owning this many water brands that probably when being on holiday abroad I often drinked one of their waters without realizing it.

8: BMW (yield 5,64%)

Listing BMW as summer stock is maybe a bit far fetched. Why I list it? I drive a BMW myself. So when we go on a holiday by car we spend many hours in the BMW.

So personally I can list BMW as a summer stock.

9: Boeing (yield 2,41%)

Listing Boeing as summer company is way more clear. To get to holiday location many people go by plane and many people will travel in a Boeing produced plane to get to their destiny of choice and experience a wonderful holiday.

10: Alphabet (yield 0,00%)

I hate them during holiday time. Some weeks ago I used google to get information about a trip to Bali, Indonesia. For weeks I now get stalked by advertisements promoting Bali on sites I visit.

When I watch a video on youtube I still often get a video from a travel agency promoting a wonderful trip to Bali.

We didn’t book a trip to Indonesia, but Google is showing me so often Bali adds that I almost start to regret not booking the Indonesia trip. Almost!

11: Aena (yield 4,20%)

This company is not known by many people, but for me there is no doubt that this company deserves a place in this summer special.

Aena is operating 46 Spanish airports and 16 airports outside Spain. As tourist myself I travelled through a few Aena operated airports.

The airports in Valencia, Barcelona, Ibizi and Gran Canaria I visited as tourist.

As investor I love this unkown stock also. Operating an airport is very steady predictable business and they pay a nice juicy yield which will pay for a decent number of Cervezas (beers) during holiday.

12: Unilever (yield 3,04%)

Unilever is the worlds biggest icecream producer. Thats what I call a real summer company.

This icecream called ‘Raketje’ (rocket) in The Netherlands is something I loved to eat as kid and I still sometimes like to eat it.

13: Facebook (yield 0,00%)

Yes, this is a summer stock. Don’t you also see to many friends sharing way to many holiday pictures?

As I love the cashflow Facebook generates more than their product. I will not write more about them.

14: Royal Dutch Shell (yield 6,04%)

Far fetched again to list this company as summer company, but I don’t want to end with 13 stocks on this list. It’s holiday soon! I don’t want to bring bad luck to myself from listing only 13 companies on this list.

Now back to Shell. Why is it a summer company? It’s because when I go on holiday by car to for example the south of France I need gasoline. I will fill the tank of my car at Shell.

Also the planes flying to holiday location will use kerosine produced by Shell. I know, these are weak reasons to call Shell a summer stock, but at least I avoid to have a list 13 companies.

Do you have any stocks in your portfolio which are really making a profit from people enjoying the summer or going on holiday? Let me know in the comments!

Think AEX ETF increases Q2 dividend to €1,06

Think AEX ETF announced the Q2 dividend will be increased by 12,8% to €1,06. As a result of this dividend increase my yearly estimated dividend income will increase with €3,12.

Due to this dividend increase the yield on cost of will now be 3,86%.

Think AEX ETF is an ETF investing in the 25 stocks part of the AEX-index. The AEX index, derived from Amsterdam Exchange index, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam.

Top 10 stock positions June 2019

I decided to periodically check the developments in my stock portfolio by taking a look at my 10 largest positions in my stock portfolio.

The Top 10:

#changeNameSectorValue (€)
1(-)Royal Dutch ShellEnergy5.304
2(-)EnbridgeEnergy3.132
3(-)Macquarie InfrastructureIndustrials2.677
4(-)ASML HoldingTechnology2.607
5(-)MacerichReal Estate2.500
6(-)FacebookTechnology2.446
7(-)UnileverConsumer Defensive2.436
8(-)GivaudanBasic Materials2.432
9(-)DSMBasic Materials2.395
10(-)AbbvieHealthcare2.391

Comments:

As this is the first time I publish the top 10 positions in my portfolio, I don’t have any interesting changes to report. Hopefully the next time I publish this top 10, the movents will give some insight in what happened in the period between this top 10 and the next top 10.

Before making this top 10, I didn’t know that Facebook is this big in my portfolio. I did build up my position by making 3 purchases. I started a small position a few years ago and bought more stocks on dips in the market. It one point Facebook was one of my biggest losing positions, but i’m now back in green figures again.

It’s funny that Facebook is this big in my portfolio. Personally I don’t like using Facebook at all. I don’t like the information I get from Facebook. I don’t trust information from Facebook. I don’t like all the disinformation I get on my timeline and I don’t like to see all the nonsense shared by Facebook friends. I get happy from finding long reads on SeekingAlpha, Yahoo Finance and The Motley Fool. Facebook, I don’t like, I don’t like, I don’t like…

I can also notice from my Top 10 that I’m probably over invested in Dutch companies. Royal Dutch Shell, ASML Holding, Unilever and DSM are Dutch companies from my top 10. On the otherhand it are also basically companies which are active all over the world. So it’s nice like i’m too much exposed to Dutch economy by having 4 Dutch companies in my top 10.

Next month I will publish a updated top 10 and see if there is something interesting to report from movements in my top 10.