Author: Erik

Royal Bank of Canada increases dividend by 2,9%

Royal Bank of Canada announced this week to increas the dividend from C$1,05 to C$1,08. This is an increase of 2,9%. Royal Bank of Canada is increasing their dividend twice per year to the dividend is now up 5,9% with previous year.

As a result of the dividend increase my yearly estimated dividend income increased by C$2,52.

ING Group adds 2,3% to the final dividend

ING Group announced an increase of their final dividend over 2019 from €0,44 to €0,45.

As the result of the 200 shares I own my yearly estimated dividend income will increase by €2.

This is the 7th dividend increase for me this year and my yearly estimated dividend income will increase by €45,32 as a result.

l’Oreal adds 10,4% to it’s dividend

l’Oreal announced an increase of their yearly dividend from €3,85 to €4,25. This is an increase of 10,4%.

As a result of the 6 shares l’Oreal I own, my yearly estimated dividend income will increase by €2,40.

This is my 6th dividend increase this year and based on this increases my yearly estimated dividend income will this year grow by €43,32.

January 2020 Dividend Report

The first month of 2020 is finished and it’s time to write the report over last month. I collected a total amount of €360,04 in dividend. This is an increase of 156% compared to January 2019.

The dividend increase is mainly due to purchases in made in 2020 of companies with a payout in January.

The top 3 companies which paid me a dividend this month are Wereldhave, Colony Capital and Anally Capital.

On top of the €360,04 income from dividend I also realized a profit of €460,06 during the january option expiration from closed and expired positions.

Dividend Income – €360,04

Wereldhave63,00
Colony Capital PREF H44,00
Anally Capital40,56
National Grid38,91
Occidental Petroleum34,09
Colony Capital PREF I33,72
Altria Group25,69
Coresite Realty21,92
Bank of Nova Scotia19,80
AGNC Investment15,11
EPR Properties10,45
Albemarle8,89
Brown-Forman B3,91

Transactions:

Dividend Changes:

2020 Target Status:

  • I’m at €1.200 out of €14.400 deposit target (8,3%)
  • I’m at €360,04 out of €5.850 dividends received target (6,2%)
  • I’m at €460,05 income from writing options
  • I’m at €0 in extra mortgage repayments

Purchase 51 shares PacWest Bancorp

Today I purchased 51 shares PacWest Bancorp (PACW) at a price of $35,22. PacWest Bancrop is a regional bank holding company mainly active in California. PacWest has over $26 billion in assets and is the holding company for Pacific Western Bank.

PacWest Bancorp is currently paying a dividend of $2,40 per year which results in a dividend yield of 6,8%.

As part of my targets for 2020 I also formulated 6 guidelines which I use regarding new investments. New investments must follow at least 4 out of these 6 targets:

Yield > 2,5%Y6,81%
5YR average dividend growth > 10%N4,66%
Payout < 65%Y61,50%
PE ratio < 20Y9,0
ROE > 10%N9,60%
Current price vs. 52 week high < 85%J84,60%

The dividend growth I basically one of the most import lines on the list with guidelines above, but as the current yield is high this stock still scores high on my watchlist.

The estimated dividend income from PacWest Bancorp the next 10 years is beating the expected income from other stocks on my watchlist with a higher average dividend growth rate. Only PNC Financial is getting close in this time frame, but as I use an average 5 year growth rate of 20% for PNC so it’s questionable if this growth rate can be maintained over a time frame of 10 years.

With the purchase of PacWest Bancorp I add $122,40 to my yearly estimated dividend income.

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 < 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.

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.