2020 Dividend Goals

As the year is almost finished and I also placed my last purchase for 2019 by adding some stocks of WestRock Company to my portfolio, it’s a good time to set the targets I want to realize in 2020 by dividend growth investing.

Targets 2020:

  • Add €1.200 fresh capital per month. (€14.400 per year)

  • Receive €5.850 dividend

    1. €5.360 is the current estimated yearly dividend of my portfolio
    2. +€163 extra dividend income due to new purchases
    3. +50 extra due to reinvesting dividend received
    4. +€277 as the result of dividend increases

  • 75% of purchases are meeting at least 4 out of these 6 conditions:

    1. Initial yield > 2,5%
    2. Average dividend growth last 5 years > 10%
    3. Payout ratio < 65%
    4. PE-ratio < 20
    5. ROE > 10%
    6. Stock price at least 15% below 52 weeks high

  • No REIT purchases if REIT’s before purchases are > 15% of my portfolio

I’m adding some conditions which have to be valid to my purchases to make 2020 the year where I add decent, predictable dividend growth companies to my portfolio. This year I added many stocks with above average yields, but below average dividend growth rates.

As a result my dividend stream increased a lot and this is giving me a good basis to have a steady cashflow available besides fresh capital deposits. I don’t mind owning stocks who already payout a big dividend already with lower growth prospects, but I want to use their dividends this year to increase the number of pure dividend growth stocks in my portfolio.

To be honest I want pass the €6.000 mark next year in dividends received, but based on my currentportfolio and the fresh capital I plan to deposit, it’s only possible to break the €6.000 mark if I get more capital availble to use on stock purchases. It’s possible I can add more capital by writing put options, but I don’t want to put a target on writing options as I don’t want to be involved in shorting puts as a must.

Based on my current portfolio the graph below is showing the phasing of my estimated yearly dividend income:

In April I will break my 2019 record from May of €736 in dividends received. Based on current payouts I will receive €771 in April. May won’t be a record month this year as a result of selling my shares Warehouses de Pauw (WDP).

Also in September and December I probably won’t break my 2019 income, because I sold my speculative position in Washington Prime Group and as a result in Sep and Dec I will now lack the $125 dividend I received from WPG in these 2 months.

2020 will be an interesting years as most stocks are around there all-time highs and it’s getting more and more difficult to find attractively prices stocks. It will be intersting to see how prices in 2020 will be developing.