Author: Erik

A few days ago I coverred the the first 5 dividend stocks adviced by Van Lanschot Bank. In this article I will cover the 2nd 5 adviced stocks.

6. Bayer:

• Dividend: €2,80
• Yield: 4,68%
• Payout ratio: 180%
• 5 Yr Div Growth: +24%
• Payout Frequency: yearly
• P/E: 58,27
• ROE: 2,32%
• ROA: 2,48%
• Current price vs. 52 weeks high: -39%

I already have Bayer in my portfolio. The stock price and EPS is under pressure as a result of a judgment by a court of first instance in the United States in connection with glyphosate / Roundup. The potential claims to be paid regarding Roundup is keeping the stock price of Bayer under pressure.

The market capitalisation of Bayer declined from €86B at the start of 2018 to €54B this year. After the judgement I decided to start initiate a position in Bayer. I don’t expect that the price will recover short term, but at a yield of 4,68% I don’t mind waiting for better times.

7. Intertrust:

• Dividend: €0,65
• Yield: 3,55%
• Payout ratio: 65%
• 5 Yr Div Growth: N/A (only 3 listed since 2015)
• Payout Frequency: twice per year
• P/E: 18,27
• ROE: 12,17%
• ROA: 4,89%
• Current price vs. 52 weeks high: -2%

Intertrust is best known for its fiduciary services, which includes tax, trust, business management and outsourcing processes. It is the largest trust office in the Netherlands, measured by number of shell corporations managed. So a lot of tax is avoided optimalized by services of this company.

There is a steady demand for the services of Intertrust and they service 50% of the fortune global 500 companies.

8. Ahold Delhaize:

• Dividend: €0,70
• Yield: 3,50%
• Payout ratio: 45%
• 5 Yr Div Growth: 46%
• Payout Frequency: yearly
• P/E: 12,96
• ROE: 12,52%
• ROA: 4,27%
• Current price vs. 52 weeks high: -16%

Ahold Delhaize is based on supermarket marketshare the 4th supermarket of Europe and the 5th in the United states. Ahold Delhaize is operating over 6.500 stores and is also operating several eCommerc formats.

I’m myself a loyal customer of bol.com an online retailplatform owned by Ahold Delhaize. Just as many other retailers the price of Ahold Delhaize is often under pressure by fears of eCommerce hurting the sales.

9. HP Inc:

• Dividend: $0,64
• Yield: 3,07%
• Payout ratio: 25%
• 5 Yr Div Growth: 143%
• Payout Frequency: quarterly
• P/E: 8,59
• ROE: n/a%
• ROA: 8,28%
• Current price vs. 52 weeks high: -22%

At position 9 it’s the first American company on the list of Van Lanschot Bank. Van Lanschot is advicing HP for it’s strong position in the high-end printer technologie.

10. Roche:

• Dividend: CHF 8,70
• Yield: 3,21%
• Payout ratio: 71%
• 5 Yr Div Growth: 9%
• Payout Frequency: yearly
• P/E: 21,52
• ROE: 36,6%
• ROA: 15,22%
• Current price vs. 52 weeks high: -7%

Roche is a pharma giant with a strong position in the market. The ROE they are able to earn on their equity is very impressive.

I’m following various news sources to stay informed about developments in the market. This week I read an article in the eMagazine of Van Lanschot Bank were they are coverring 10 dividend stocks they consider attractive at this moment. Disclaimer: Van Lanschot is a Dutch bank so the article is in Dutch.

Often these kind of articles are not really giving me any new insights, but this article was refreshing. The reason I consider this article refreshing is that it has a lot of European stocks in their list of top 10 attractive dividend stocks.

On the internet it’s really easy to stay informed about American stocks, but it’s way more challenging to find nice articles about European stocks.

Inspired by this article I decided to take a look at the companies listed in this article. I will cover the 10 stocks from the list below in several posts.

I will cover the 10 companies on the Van Lanschot list in 2 articles and will also add a follow up where I compare these companies with comparable companies in my portfolio.

The comparison is for challenge myself in determining if the comparable stocks I have in my portfolio are still of the same quality level as I when I made the purchase decision.

1. UBS Group AG:

• Dividend: CHF 0,70
• Yield: 5,91%
• Payout ratio: 65,4%
• 5 Yr Div Growth: +40%
• Payout Frequency: yearly
• P/E: 11,1
• ROE: 7,61%
• ROA: 0,43%
• Current price vs. 52 weeks high: -28%

This stock indeed looks attractive on first glance. I will add UBS Group to my watchlist. I’m curious how this stock will compare with other banks in my portfolio.

The yield is attractive especially, but the payout ratio is somewhat high I think. I didn’t know that return on assets of a bank is this low.

I have 6 banks in my portfolio so I’m curious how the financials of UBS compare with the financials of the banks I already own.

2. Royal Dutch Shell:

• Dividend: € 1,65
• Yield: 5,73%
• Payout ratio: 58,3%
• 5 Yr Div Growth: 0%
• Payout Frequency: quarterly
• P/E: 10,2
• ROE: 11,97%
• ROA: 5,02%
• Current price vs. 52 weeks high: -6%

I have Royal Dutch Shell in my portfolio. It’s actually my biggest holding. Actually there are only 3 companies in my portfolio which resulted in a higher profit than Royal Dutch Shell.

It’s a steady company and bringing in a nice steady flow of dividends. The only thing I would like to see is an increase in dividend.

3. Banco Santander:

• Dividend: € 0,23
• Yield: 5,45%
• Payout ratio: 53,1%
• 5 Yr Div Growth: -61%
• Payout Frequency: quarterly
• P/E: 9,6
• ROE: 8,48%
• ROA: 0,62%
• Current price vs. 52 weeks high: -15%

Again a bank just as UBS Group where the payout and yield is looking attractive. I’m not understanding yet why the 5 year dividend growth is negative.

Scrolling through annual reports I see that the dividend got reduced after issuing new shares to increase the capital, but I can only find a reduction from 60 to 40 cents. All other metrics are looking comparable with UBS Bank Group.

Part of the dividend is paid as stock dividend.

4. Schlumberger:

• Dividend: $ 2,00
• Yield: 5,11%
• Payout ratio: 138%
• 5 Yr Div Growth: +20%
• Payout Frequency: quarterly
• P/E: 28,0
• ROE: 5,62%
• ROA: 2,72%
• Current price vs. 52 weeks high: -42%

Nice yield, but if I take a look at the profit figures of last few years this company is feeling to cyclical for me. After reading their website I still don’t really have a good insight in what they exactly do and why they are unique in this. Not putting this one on my watchlist.

The payout is above 100% for a few years so I’m not sure how safe the dividend is. Bert from DividendDiplomats has a interesting article about the question if Schlumberger’s dividend is safe.

5. Telefónica:

• Dividend: € 0,40
• Yield: 5,41%
• Payout ratio: 66%
• 5 Yr Div Growth: +14%
• Payout Frequency: yearly
• P/E: 12,1
• ROE: 11,52%
• ROA: 2,98%
• Current price vs. 52 weeks high: -8%

I don’t have a telecom company in my portfolio yet so I’m definately interested to add one if I see a nice opportunity.

The reason why I don’t have a Telecom company in my portfolio is that most of them don’t show impressive dividend growth. Also Telefónica only raised their dividend with 14% in a 5 year time frame.

The ROE and P/E is attractive, but I tend to like it more to add stocks which are preferably well below their 52 weeks high.

Later this week I will add part 2 of this article. If you have any comments about these 5 companies or if you know a better alternative please let me know.