Mid-year review 2018

Recap

– Deposited €11.900 in my broker account compared to €9.000 target

– Repayed €5.400 extra mortage above regular monthly repayments vs. a target of €5.000

– Received €1.154 dividend vs. a mid year target of €1.100

– Overall I’m on track reaching my targets set for this year

Deposits

I’m well above my target set for deposits to my broker account. This is mainly due to extra income as a result of extra salary as a result salary increases as set in the collective labour agreement (CAO) as negotiated by the unions. I never take these salary increase into consideration while determining my deposit account, because it’s my experience it can sometimes take months or even well over a year before the employers and labour unions reach an agreement.

Also some small tax changes resulted in a small increase of my income after tax and as a result a bit more spare money to deposit in my broker account, because I’m still happy with the savings balance I have and still do deposit all my spare money into my broker account.

Extra mortgage repayment
The target of repaying €5.000 extra above my regular monthly installments was this year more challening. Normally I have this amount almost available by the payment of holiday money from the company I work for in May and the tax return I receive from the Dutch government.

In The Netherlands it’s a common practice to receive 8% of your yearly salary in May as holiday money above the regular paycheck. This not changed in this year. Normally I receive a tax return in May, because interest on mortage is tax deductable in The Netherlands. It’s possible to receive every month 1/12th of this tax return, but I always prefer to receive the return fully in May.

This year my tax return is only halve of the return of previous year. This is because my assets did grow a lot last few years and in The Netherlands there is a tax on assets. As a result of the grow in value of my share portfolio and value of my house the tax on assets did eat a big part of my mortgage interest tax return.

I did still repay €5.000 in May as extra mortgage repayment by adding €1.500 of free income I would normally have added as extra deposit in my share portfolio, because I consider it important to repay my mortage much faster than the standard of 30 years we have in The Netherlands.

The extra mortgage repayment has besides a lower debt also as a result that my monthly payment to the bank is reduced with €30 a month.

Dividend income
Dividend income is on track with 52,5% of my full year target reached. I’m only slightly above 50% while i did receive yearly dividend from companies like Aena, ASML, WDP and Fortum. Based on current dividend levels my full year dividend income is €2.229. This full year dividend income is also taken into account the shares I for example bought this month and for which I won’t receive dividend in the first months of this year.

To reach my full year target I’m still dependable on extra shares I buy in the 2nd halve of this year else the set target of €2.200 to receive this year will be challenging to reach.

I did set a challenging target, but because of a dividend cut of Macquarie Infrastructure Company and euro-dollar exchange rate of over 1,21 compared to around 1,21 in the first halve of 2017 did result in on average 11% lower dividend income. On the otherhand I did mainly buy American shares in the first part of 2018 so I get 11% more shares just because of the dollar-euro exchange rate…

Fact Five

1) Largest Position: AbbVie €2.920

2) Largest yearly dividend income: Enbridge €132

3) Estimated dividend on a yearly basis €2.229

4) Largest sector: REIT 22,1% of portfolio

5) Largest currency: USD 59,8%

Wishlist for 2nd part of year

1) Increasing share of eurozone investments

2) Doubling position in Unilever to increase exposure in Consumer Staples sector.

3) Increasing ING and Aegon positions, because these stocks are now very small positions in my portfolio while I bought them to add a decent cashflow in my portfolio. Due to share price increases and new deposits ING (5,33%) and Aegon (5,35%) are now a bit too small positions.

4) Spending time on researching the German stock market. One of the biggest market in Europe, but I have no exposure in German stocks. I plan to reserve time to do research on the German market.

5) Analyzing some Euro dividend ETF’s to get some inspiration finding eurozone dividend stocks.

Final Thoughts
Reaching my dividend income target for this year will be a challenge. Also because some shares very high on my watchlist are euro shares 1 yearly dividend payment paid in the first part of the year. Buying these shares will not result in extra dividend income this year, but I not going to skip these shares if still high on my watchlist just because it will not help me reaching my short term dividend income taret, the long term is more important.

June Dividend Report 2018

Monthly Report June:

This month I received €222,43 in dividends compared to €53,59 last year. This is an increase of 315%!

Mainly new positions increased my dividend income this month. With Royal Dutch Shell, Enbridge, Think AEX ETF and Dominion Energy responsible for over 60% of my dividend.

This month I did use my monthly deposit to buy 12 shares AbbVie and 5 shares McDonalds. With the purchase of 12 shares AbbVie, AbbVie is now the largest position in my portfolio. So I did not open any new positions, but only increased current positions I have.

I ended the month with a portfolio value of €57.065.

Dividend Income – €222,43:

– Royal Dutch Shell €48,13
– Enbridge €39,92
– Think AEX UCITS ETF €24,44
– Dominion Energy €21,61
– Aegon €16,80
– DSM €16,51
– Johnson & Johnson €11,43
– Monmouth REIT €11,00
– EPR Properties €9,32
– Unilever €7,74
– Boeing €5,87
– McDonalds €5,23
– Bank of America €4,43

Transactions:
– Purchase 12 shares AbbVie @ $96,40
– Purchase 5 shares McDonalds @ $162,82

Dividend Changes:

2018 Target Status:
I’m at €11.900 out of €18.000 deposit target (66,1%)
I’m at €1.154,63 out of €2.200 dividend received target (52,5%)
I’m at €5.400 out of €5.000 extra mortgage repayments (target reached)

Purchase 5 McDonalds & 12 AbbVie

My June purchase I did spread over 2 positions in my portfolio.

I bought 5 shares McDonalds bringing my total number of McDonalds shares to 11. Also I increased my position in AbbVie again. I added 12 shares and now own a total of 35 shares AbbVie. AbbVie is now one of my largest positions in my stock portfolio.

With these 2 purchases I increased my expected yearly dividend income with $66,28

May Dividend Report 2018

Monthly Report May:

May is another record dividend income month for me! This month I received €328,19 in dividends compared to €124,24 last year. This is an increase of 164%!

New positions in WDP, Unibail-Rodamco, Kas Bank, Macquarie Infrastructure Company and Amsterdam Commodities made a lot of difference.

This month I made many changes to my portfolio. When I started building my portfolio I did spread my monthly deposit over different purchases to reach a diversified portfolio faster. As a result I still have a few very small positions. This month I sold some small positions from companies which are not scoring high on my watchlist which means I (probably) won’t increase the size of the position anytime soon.

I also sold Macquarie Group LTD, because for me as Dutch investors it’s hard to find interesting articles and analysis about this company which keep me well informed about this company. I only did read publications by Macquarie Group itself and I prefer to read articles from other sources also to be able to read critical feedback about the company so I can sharpen my opinion and knowledge about a company. For this reason I now also added to my personal investing guidelines a rule about only investing in companies where I can easily gain access to articles and analysis.

This month I also paid an extra €5.000 into my mortgage loan. This will result in less debt and €360 per year in less interest payments.

I ended the month with a portfolio value of €54.581.

Dividend Income – €328,19:

– WDP €49,50
– Unibail Rodamco €43,20
– Macquarie Infrastructure Company €35,64
– Amsterdam Commodities €31,50
– Kas Bank €31,00
– Omega Healthcare €29,51
– ING €21,50
– AbbVie €18,66
– Flow Traders €17,50
– Simon Property Group €13,36
– Royal Bank of Canada €13,07
– EPR Properties €9,16
– ASML €8,40
– Apple €6,19

Transactions:
– Purchase 30 shares Dominion Energy @ $65,19
– Purchase 17 shares Coca Cola @ $42,20
– Purchase 10 Coresite Realty @ $103,51
– Purchase 8 Simon Property Group @ $154,23
– Purchase 10 Enbridge @ $32,98
– Sell 10 shares Macquarie Group LTD @ AUD 111,60
– Sell 45 shares Ryanair @ €15,49
– Sell 3 shares Stamps.com @ $248,05
– Sell 3 shares Berkshire Hathaway @ $200,14
– Sell 104 shares Iberdrola @ €6,55

Dividend Changes:
– Apple quarterly dividend 15,9% up from $0,63 to $0,73 (+$4,00 yearly div)
– WDP yearly dividend 5,9% up from €4,25 to €4,50 (+€2,75 yearly div)
– DSM yearly dividend 5,7% up from €1,75 to €1,85 (+€1,30 yearly div)
– National Grid final dividend 4,6% up from 29,1p to 30,44 p (+€1,53 yearly div)
– Coresite Realty quarterly dividend up 5,1% from $0,98 to $1,03 (+$4,00 yearly div)

2018 Target Status:
I’m at €10.400 out of €18.000 deposit target (57,8%)
I’m at €932,20 out of €2.200 dividend received target (42,3%)
I’m at €5.400 out of €5.000 extra mortgage repayments (target reached)

Extra mortgage repayment of €5000

For me it’s common to make an extra mortgage repayment on a yearly basis above the monthly payments which are standard. I always do this in May, because in May I normally get my tax return deposited from the Belastingdienst (Dutch tax agency). Also it’s common in The Netherlands for companies to pay out a holiday allowance of 8% of the yearly salary to their staff in May.

My tax return is mainly based on the balance between the tax I pay over my assets (savings, share portfolio, bonds, etc) and the tax return I get on mortgage paid. In the Dutch tax system paid mortgage interest can be deducted from paid income tax. Basically it means I get approximately 50% of my paid mortage interest back from the government.

A few years ago this always resulted in a few thousand euro’s tax refund, but as a result of my interest percentage decreasing from 4,8% to 1,99% at the end of the fixed interest period I not pay that much interest anymore and the tax return is relatively small compared to a few years ago. In the past I got almost €3.000 as tax return, but this year due to the low interest I pay in combination with tax I have to pay over my assets (vermogensbelasting) I get back €1.000.

The holiday allowance which the company pays out in May to me is approximately €3.000.

The tax return and holidayallowance plus a bit of my savings I use to repay €5.000 extra on my mortgage. This will result in a yearly saving of €360 on future mortgage payments.

250 shares of Enbridge Energy Partners LP sold… already

On 14 May I bought 250 shares of Enbridge Energy Partners, but only 3 days later I already sold them again.

Enbridge did announce the plan to offer 0,3083 Enbridge shares for 1 unit of Enbridge Energy Partners. This means a premium of zero %. Maybe in the future based on the percentage of unit holders which will vote against he merger there will be a little premium offered. I decided to sell the units and not wait for the closing of the deal. Without the high distributions I did expect to earn the fiscal paperwork is not worth it for me to wait for the chance on an improved merger proposal.

I bought the units at $9,78 and sold them at a price of $10,15. A 3,8% profit.

+4,6 Final Dividend Increase National Grid

During the 2017/2018 full year results publication National Grid announced a 4,6% increase of their final dividend over the bookyear 2017/2018. The final dividend will increaes from 29,1 pence to 30,44 pence.

I own 100 shares National Grid so this final dividend increase will result in 134 pence extra dividend. In euro’s this is €1,53.

Purchase 250 shares Enbridge Energy Partners

This week I bought 250 shares Enbridge Energy Partners at a price of $9,78. The current distribution of Enbridge Energy Partners is $0,35 per quarter. With this purchase I add $350 to my yearly estimated dividend income, but because I’m not exactly 100% sure about the withholding rate and/or if the tax threaty rate with NL is used I deduct the MLP withholding tax rate of 39,6% for now and book in an estimated dividend income of $211,40.

Enbridge Energy Partners is an MLP, a limited partnership that is publicly traded. An MLP combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. To obtain the tax benefits of a pass through, MLPs must generate at least 90% or more of their income from qualifying sources such as from production, processing, storage, and transportation of depletable natural resources and minerals. In addition, real property rents also qualify.

An MLP is not paying federal tax, but as unitholder, Dutch/foreign unitholder, I now expect to fill out some beautiful papers called 1040NR / Schedule K1. Also I have to apply for an Individual Taxpayer Identification Number (ITIN). Reading up about this tax paperwork was challenging, because I really had a hard time finding information usefull for me as Dutch citizen.

This is my first and for now last purchase of an MLP. I will first check next year how things go regarding the tax return and based on my experience with filing for tax return I will decide if it’s worth adding more MLP units to my portfolio in the future or if the paperwork is just not worth it and it’s better to close this position.

Purchase 17 shares Coca-Cola

Yesterday I for the 3rd time bought shares Coca Cola. This time I bought the shares against price per share of $42,20. I now own 39 shares Coca-Cola with an average purchase price of $44,37. With this purchase I add $26,52 to my yearly estimated dividend income.

While writing this post I realized that previous time I bought more Coca-Cola shares at the end of January, I bought them at price just 20 cents below the 52 weeks high, actually even a 5 year high. Now I add the shares close to the 52 weeks low of Coca-Cola which is a much better moment to add shares.

I now bought shares Coca Cola 3 times:

1st purchase: 15 shares @ $44,95
2nd purchase: 7 shares @ $48,41
3rd purchase: 17 shares @ $42,20

The current yield on cost based on the weighted average purchase price is 3,52%.