Purchase 10 shares Alibaba Group Holding

alibaba group holding logo BABA

Today I bought 10 shares Alibaba (BABA) at a price of $139,86 including fees. Alibaba is not a typical stock for me to buy as dividend growth investor. This is because Alibaba is not paying out any dividend at all. Together with Amazon, Alphabet, Facebook, Baidu and Wizzair it’s in the part of my portfolio with companies not paying dividend.

Alibaba is today down almost 6% and the share price is around the 52 weeks low. The share price of Alibaba is down 35% down from the 52 weeks high reached in June.

Alibaba is for some time on my watch list and I decided to pull the trigger today after a sharp downturn of tech shares. With this purchase I now own all 3 BAT stocks: Baidu, Alibaba, Tencent.

Purchase 30 stocks Tencent

Tencent Corporate Logo

Normally I tend to place my monthly stock purchase at the end of the month just after I received my salary. This month I’m early. I planned to buy this month Tencent (NNND)stocks and I placed a limit order almost 5% below the current price. Last days the price of Tencent dropped and I got 30 shares at a price of €34,86 at the Frankfurt exchange.

Tencent is not really a dividend stock, so not a regular stock pick for me. This buy is more a purchase against the current sentiment in the market which is negative for Tencent. Tencent is down 30% from it’s highest price this year. I have Tencent a long time on my watchlist, because it’s a company with a strong position in China. Tencent has a strong moat in China with the WeChat app. The Chinese market is still difficult to enter by foreign companies so it’s my opinion that Tencent won’t experience any competition from Facebook or Alphabet on their homemarket.

The advantage is possibly also a weakness. The Chinese government is softly said not a big fan of the gaming market and lately Beijing is restricting gaming approvals. Near-term there are regulatory challenges in China, but for longer term overall industry growth prospects within Asia are very solid.

With the purchase of Tencent stocks I gain more exposure to Technology and China exposure.

Tencent payed a dividend of HK$0.88 per share over 2017. This is approximately €0.10 per share. As a result of purchasing 30 Tencent shares my yearly expected dividend income will increase with €3,00. The yield on cost based on the current dividend is 0,29%.

September Dividend Report 2018

Monthly Report September:

In September I received €183,36 in dividend payments. Last year in September I received €90,26 so my dividend income is up 103%.

I received dividend payments of 12 companies. Royal Dutch Shell (RDSA), Enbridge (ENB) and Dominion Energy (D) are responsible for over 50% of my dividend income this month.

This month I did make 4 purchases: 6 shares of Spanish airport operator Aena, 4 shares of technology company ASML Holding, 150 shares of Insurance company Aegon and 50 shares of the Dutch Bank ING Group. All 3 of these companies I already have in my portfolio so I increased the number of shares I own in them.

All 100 shares of Kas Bank I sold this month, because they reported disappointing results and I consider the outlook also not possitive for Kas Bank. Therefore I decided to sell the shares and invest the money from the sell in Aegon shares.

The month I ended with a portfolio value of €61.683. My estimated dividend income for 2018 based on my current portfolio is €2.163. The yearly estimated dividend income of my current portfolio is €2.442.

Dividend Income – €183,36:

– Enbridge €43,88
– Royal Dutch Shell €30,36
– Dominion Energy €21,33
– Aegon €16,80
– McDonalds €11,64
– Monmouth REIT €10,91
– Think AEX UCITS ETF €10,40
– Johnson & Johnson €9,58
– EPR Properties €9,24
– Unilever €7,74
– Boeing €5,92
– Bank of America €5,56

Transactions:

Sell 100 shares Kas Bank (EPA:KA)
Purchase 150 shares Aegon (EPA:AGN)
Purchase 6 shares Aena (BME:AENA)
Purchase 4 shares ASML Holding (EPA:ASML)
Purchase 50 shares ING Group (EPA:INGA)

Dividend Changes:

McDonalds quarterly dividend +15% ($6,60 extra yearly dividend)
WDP yearly dividend +6% (€3,30 extra yearly dividend)

2018 Target Status:

I’m at €15.950 out of €18.000 deposit target (88,6%)
I’m at €1.747,16 out of €2.200 dividend received target (79,4%)
I’m at €5.400 out of €5.000 extra mortgage repayments (target reached)

Purchase 50 shares ING Group

ing group logo

ING Group is my 3rd purchase of the month. I bought 50 shares of ING Group against a price of €11,61. I now own 100 shares ING with an average purchase price of €12,75. With this purchase I added €33,50 to my yearly estimated dividend income. My yield on cost of this position in my portfolio is now 5,25%.

ING Groups share price dropped lately due to a €775 million fine regarding having lax policies regarding money laundering and due to being the Dutch bank with the largest exposure to Turkey. ING Group is down 30% this year. The current dividend yield is 5,77% and I decided to add 50 shares against the current price.

Purchase of 4 shares ASML Holding

In September I made 3 purchases. The first purchase was Aena and the 2nd purchase I made was 4 shares ASML Holding at a price of €160,94. It’s the 2nd time I bought ASML shares and I now own 10 shares.

When I bought shares of ASML (EPA:ASML) for the first time in January of 2017 the share price was €113,90. So with this purchase my average purchase price is going up to €132,94.

ASML is paying a yearly dividend of €1,40 so my yield on cost is now 1,05%. With the purchase of 4 shares I add the humble amount of €6 to my yearly estimated dividend income.

ASML is currently the largest producer of photolithography systems for the semiconductor industry. Basically ASML is producing the machines which are needed to produce computer chips. ASML has a unique position in the market due to the quality of their products. In 2017 that had a market share of over 85%. With this purchase I increase my exposore in the Technology sector.

Purchase of 6 shares Aena

Yesterday I bought 6 shares Aena at a price of €148,95. It’s the first of three purchases I will make this month. With this purchase I doubled my position in Aena, because I already owned 6 shares. With this purchase my average purchase price is declining from €162,15 to €155,93. Aena increased it’s dividend this year from €3,83 to €6,50. My yield on cost of this position is 4,17%.

With this purchase I add €39,00 to my estimated yearly dividend income. Aena is paying their dividend once a year in April.

Aena is active as airport operator of 46 airports and 2 helipads in Spain. Aena (BME:AENA) is also owning a 51% stake in London Luton Airport. The Spanish government has a 51% stake in Aena. I add more stocks of Aena to my portfolio to strongen the conservative part of my portfolio. I don’t expect very strong growth numbers, but Aena will add some steady dividend income.

The diversification by country of my portfolio

In this post I will make an analysis of the diversification by country of my share portfolio. I will compare my diversification by country with the MSCI World Index just as when I made an analysis of the diversification per sector of my portfolio.

The breakdown per country of my portfolio

In the table below you can see the diversification per country of my portfolio:

Summary:

  • I’m overweighted in The Netherlands
  • I’m underweighted in The USA
  • I’m lacking exposure in Japan
  • Other countries have a deviation smaller than 5% versus the World Index
  • The Netherlands

    Shares from The Netherlands are 22,4% of my portfolio. In the MSCI World Index The Netherlands is 1,2%. The Netherlands is my home country so it’s easy for me to get enough information about Dutch companies and decide if I consider them good potential investments. The Netherlands is also the home country for many international companies.

    I have Royal Dutch Shell, ASML Lithography, Unilever and Aegon in my portfolio listed as companies from The Netherlands, but the majority of their income comes from other countries than The Netherlands. Also I have the Think AEX ETF in my portfolio. This EFT is fully invested in Dutch stocks.

    I don’t mind being overinvested in The Netherlands, but now I compared the share of Dutch stocks in my portfolio versus the MSCI World Index, I think I should reduce the share of Dutch stocks in my portfolio. I could sell the ETF and refrain from investments in Dutch stocks until I consider the share more in balance.

    The United States

    The USA is 48,8% versus 61,7% in my portfolio. I always had the idea that I’m overweighted in the USA and decided to mainly buy euro stocks for the last months of 2018, but compared with the MSCI World Index I’m underweighted. I guess this is mainly the result of being overweighted in The Netherlands.

    The positive thing of this analysis is that I have a decent number of American companies high on my watchlist. The devil in my head saying that I’m overweighted in USA and that I should buy euro stocks I now silenced by looking at the MSCI World Index.

    Japan

    I don’t have any stocks from Japan and Japan forms 8,4% of the MSCI World Index. I don’t see myself buying any Japanese stocks anytime soon. I simply don’t have enough knowledge to pick quality Japanese stocks. Softbank is top of mind as a big investor in Tech companies, but having just one company top of mind is not a solid basis to my investment decissions.

    I probably take it for granted that I’m not invested in Japan.

    Conclusion

    For the next year I will focus on slowly reducing the exposure in The Netherlands and I will add some more American stocks.

    McDonald’s Raises Quarterly Cash Dividend By 15%

    Yesterday it was the M of Microsoft and today’s it’s the M of McDonalds if it’s about dividend increases. McDonalds announced a 15% dividend increase. The quarterly dividend is increased from $1.01 to $1.16.

    I own 11 shares McDonalds so this dividend increase results in $6,60 in extra dividend income per year. My yield on cost is now 2,98%.

    Microsoft increasing their quarterly dividend with 9,5%

    This week Microsoft (MSFT) announced this week that the quarterly dividend is increased with 9,5% from $0,42 to $0,46 per share. Unfortunately Microsoft is only on my watchlist and not (yet) in my portfolio. Microsoft Corporation is a strong company with strong brands like Windows and Microsoft Office (Excel, Word, Powerpoint, etc) and also together with Amazon AWS, Microsoft is a leading player in cloud services.

    Like I said Microsoft is just on my watchlist and I don’t own shares of them at the moment. This is mainly due to my preference to buy shares on a dip, when shares are closer to their 52 weeks low than to their 52 weeks high. Microsoft price is up almost 50% this year, performing much better than the market average.

    Due to the price increase the yield is only 1,6% after this dividend increase.

    Microsoft will stay high on my watchlist so I hope to add some shares when there is a market correction and else someday I will buy it probably against a current price level to add this Tech giant to my portfolio.

    WDP (ESA:WDP) announces a target dividend increase of 6,6%

    While reading the half-year report of Warehouses De Pauw (ESA:WDP) I noticed that WDP also did announce a target dividend increase. WDP has the intention to increase the dividend with 6,6% from €4,50 to €4,80. This increase is not yet final, but based on the development of their EPRA Earnings per share.

    I own 11 shares of Warehouses De Pauw so this planned dividend increase will result in €3,30 extra dividend income. Yield on cost will become 5,1% for me after this dividend increase. Current yield based on today’s stock price is 3,9%.

    WDP is a REIT investing in semi-industrial and logistical real estate mainly located in Belgium, The Netherlands, the north of France and Romania. WDP is listed on the Euronext stock exchange in Brussels and Amsterdam. I have this stock in my portfolio, because I believe in the steady cashflow these kind of buildings are generating and I also believe they will stay in strong demand due to eCommerce growth.