Author: Erik

Interim Dividend National Grid Increased by 3,0%

Today I received the interim dividend from National Grid and I noticed it was 3,0% higher than the interim dividend received last year.

National Grid increased their interim dividend from 16,08p to 16,57p.

Based on the most recent paid interim and final dividend the yearly dividend is 47,83p. This means the current yield of National Grid is 4,9%.

The yield on cost of my National Grid position is 5,4%.

December 2019 Dividend Report

And again another month and year has been finished and it’s time to write my report regarding my December dividend income.

December 2019 resulted for me in €526,94 in dividend income. This is up 117% from the €242,66 I received previous year in December.

In total I received this year €4.893 in Dividend income. This is 120% better than the €2.224 received in 2018!

I received dividend from 18 companies. The income in December was influenced by a speculative position in Washington Prime Group which I closed in November, but in December I received the most recent dividend payment from WPG.

Top 3 dividend payers are WPG, Shell and Macerich. The dividend payments of these 3 companies are good for 46% of my dividend income this month.

Above my regular monthly mortgage payment I did an extra repayment of €260.

Dividend Income – €526,94

Washington Prime Group112,14
Royal Dutch Shell79,18
Macerich53,69
Enbridge50,07
Invesco35,51
Dominion Energy24,82
Taubman Centers21,06
Unilever18,47
Qualcomm16,79
Monmouth REIT16,01
AGNC Investment15,16
Bank of America14,50
Coca Cola13,99
Johnson & Johnson12,85
McDonalds12,34
Boeing11,15
EPR Properties10,43
LVMH8,80

Transactions:

Dividend Changes:

2019 Target Status:

  • I’m at €14.400 out of €14.400 deposit target (100%)
  • I’m at €4.893,24 out of €3.500 dividend received target (140%)
  • I’m at €2.973,25 income from writing options
  • I’m at €3.200 in extra mortgage repayments

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 < 60%
    4. PE-ratio < 20
    5. ROE > 10%
    6. Stock price at least 20% 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.

Option Expiration December 2019

In december most of the positions I had were related to Dutch construction companies as there was a positive sentiment as a major stockholder of a Dutch construction company announced the intention to acquire the shares It not owns yet.

I decided to take open a few small short put positions on Dutch construction companies Volkerwessels, Heijmans and Royal BAM Group to benefit from a positive sentiment regarding construction companies.

In december I realized €317,15 in profits regarding my short positions.

  • Rolled 1x ABN P16.00 20DEC19

    I rolled this option to ABN P16.00 17JAN20 and received €10 more premium by closing this position by buying back the option for €82 and opening the JAN20 position for €92 premium.

    Timing of closing this position was slightly unlucky, because just a few days after rolling this position the stock price went up almost 4% going from a lot out the money to almost being in the money. ABN Amro closed at a price of €16,33 at expiration. The JAN20 postion to which I rolled this position also declined a lot to €20. So probably I will close this position profitable in JAN.

  • Closed 2x AH P23.50 20DEC19 – €103,40 loss

    Ahold Delhaize declined against the market. Where the general market went up after trade war tensions declined. I closed the position on a small uplift of Ahold Delhaize of over 2% with the intention to roll it to JAN20 after a correction. As the price of Ahold did stay on the same level I didn’t open this position again and took the loss.

  • Expired 10x BAM P2.40 20DEC19 – €101,50 profit

    In November I opened various positions regarding Dutch construction companies as I considerred the sentiment postive regarding construction companies. This due because a major shareholder of Volkerwessels announced the intention to place a bid on the shares it doesn’t own yet.

    I started my position by selling 10 put options for €11 per contract. BAM Group closed at €2,68, well above the strike price and expired worthless. This resulted in a profit of €101,50.

  • Expired 4x HEY P7.20 20DEC19 – €96,60 profit

    In November I opened this position by selling 4 options for €25 per contract. Heijmans closed above the strike price and this position expired worthless. As a result I realized a profit of €96,60.

  • Expired 3x KVW P20.00 20DEC19 – €222,45 profit

    In november I shorted 3 different kind of put options series regarding Volkerwessels and the news that major stockholder Reggeborgh planned to bid €21,75 per stock.

    On this news the stock price increased from around €18 to €21. As Reggeborgh was already owning almost 64% of the stocks I expected that a bid would get through and that the risk would be limited based on the price before the news in combination with the strike price and premium received.

    On the 7th of November I sold 3 different puts with a strike of €20 but with different expiry dates. For december I shorted 3 puts with a €75 premium. On 12 November it was announced that an bid supported by the management would be done against a price of €22,20.

    Based on this bid the premium of the 3 put series I shorted dropped to almost zero. The december puts expired worthless and resulted in a realized profit of €222,45.

    I have still have short puts with expiry dates in JAN20 and MAR20 left in my portfolio which I probably will also keep until they expire worthless.

The total profit I made this year from shorting put options increased this month by €317,15 to €2.973,25.

Dominion Energy Increases Dividend by 2,4%

This month Dominion Energy announced an increase of the quarterly dividend from $0,9175 to $0,94. This is an increase of 2,4%.

As a result of the 30 shares Dominion Energy I own my yearly estimated dividend income will increase by $2,70.

Based on the announced dividend my yield on cost will be 5,8%.

Balancing Legal & General PLC and Purchase Averaging Down Taubman Centers

Today I sold 280 out of the 650 shares Legal & General I owned. This is balance this position in my portfolio as the weight of this position got relatively big due to recent price increases.

I purchased my 650 shares Legal & General Plc at the end of August for a price of GBX 219,60. I now sold part of my position for GBX 318,50. This is an increase of 45%. GBP/EUR exchange rate resulted in another 9% profit.

When I started this position the yield of Legal & General Plc was 7,57%. Against the current stock price the yield is 5,83%. For me a reason to balance this position back to it’s original value.

By selling 280 shares my yearly estimated dividend income decreases by GBP 46,90 / €56,10.

With the proceeds from the sold Legal & General Plc shares I doubled my position in Taubman Centers by purchasing 35 shares at a price of $29,98.

Where I was very lucky in the timing of my Legal & General purchase, my timing of buying Taubman Centers was simply unlucky. End July I purchased 35 shares with an average purchase price of $40,78. Today i doubled my position against a 26,5% lower price.

As a result of doubling down the average purchase price of my position in Taubman of 70 shares declined from $40,78 to $35,38.

By adding 35 shares Taubman my yearly estimated dividend income based on the current dividend will increase by $94,50 / €84,82.

Enbridge Increases Dividend By 9,8%

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Enbridge announced an increase of the quarterly dividend from C$0,738 to C$0,81. This is an increase of 9,8%.

I own 100 shares Enbridge so the dividend release will increases my yearly estimated dividend income by C$28,80.

The current yield of Enbridg is a nice 6,39%. As a result of the announced dividend increase my yield on cost is now 9,35%.

LVMH Interim Dividend 2019 up 10%

LVMH recently paid their interim dividend and I noticed the interim dividend was increased by 10% to €2,20 per share.

I own 4 shares LVMH so the increase of the interim dividend results for me in €0,80 extra dividend.

Based on the last 2 dividenpayments of LVMH the yearly dividend is now €6,20 which results in a current yield of 1,56%. This is basically around 50% of the earings per share so enough cashflow is staying within the company to afford the bid on Tiffany’s.

Based on my average purchase price my yield on cost is 2,96%.

I’m a big fan of this company although I don’t own any of the items produced by LVMH. Although we often celebrate the new year with a bottle of Veuve Clicquot champagne.

Purchase 36 shares Delta Airlines

Last week I purchased 36 shares Delta Airlines at a price of $56,42. I finished this transaction by selling 26 shares of the ETF VanEck AEX. VanEck AEX is an ETF investing in the AEX index which is composed of Dutch companies.

I already have positions in ASML Holding, Unilever, Shell, ING, DSM, Ahold, Unibail-Rodamco-Westfield and Aegon and these companies are over 60% of the AEX index. I decided to sell my last ETF and use the proceeds to initiate a position in Delta Airlines.

By closing my position in VanEck AEX my yearly dividend income will decrease by €52,78. This will be offset my $58,03/€52,75 dividend income from Delta Airlines.

Delta Airlines is currently paying a quarterly dividend of $0,403. Based on my purchase price the yield on cost is 2,86%.