Category: 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.

It’s almost the end of 2018 so it’s a good time to set my dividend targets for next year. The inflation in The Netherlands is 2,0% in November compared to previous year. As a result of the inflation I’m increasing the monthly dividend income target from €1.015 to €1.035,30.

Targets 2019:

• Reach €3.500 dividend income
• Invest €14.400 fresh capital in my stock portfolio

Based on the portfolio I have now my dividend income for 2019 will be €3.176. My dividend income target is based on this income and 6% average dividend growth. Also I expect that new purchases will result in €133 in extra dividend income.

I reduced my monthly deposit from €1.500 to €1.200 this year. I want to increase the balance in my savings account in 2019, because it’s below the level where I want it to be after making some investments in my house.

Last few months the stock market is very volatile so I’m curious how next year will be on the stock market.

Starting this year I made it an target for myself to have an average monthly dividend income of €1.000 in 2027. I also stated in my long term goals that I would increase the average dividend amount every year with the inflation. The inflation in The Netherlands based on the CPI-index is 1,5% so I increase my monthly dividend target to €1.015.

Targets 2018:

– An average monthly deposit of €1.500 excluding dividend reinvestments
– Receive €1.600 in dividend
– €2.200 expected annual dividend income (full year basis)
– €5.000 additonal mortgage repayment above regular monthly repayments

I end 2017 with an expected yearly dividend of €1.296,49 based on todays exchange rates. For next year I have a short term focus of adding companies generating a relatively high dividend stream to my portfolio so I will build a layer of income generating companies in my portfolio which I can use to increase my monthly share purchases.

It’s the first time I set a target to reach next year to support the long term target. I have to say it’s a bit challenging to estimate a realistic goal for next year. Just because I decided to have a year with a focus on stocks with a high yield I have to be aware to not only blindly focussing on stocks delivering a high absolute return. Within high yield shares I still have to find stocks which have a history in increasing dividends.

The shortlist with potential investments is full with REIT’s, Utilities, Financials, Oil Companies and a few Consumer Staples and Pharma companies. So keeping my portfolio properly spread over various sectors will be challenging.

Another challenge is keeping the currencies balanced. It’s way more easy to do research about American companies, because information about American listed companies is more available than information about European companies. For this reason on my short list there are only a few European companies. I’m from the Netherlands so I want to have a decent share of euro companies in my portfolio to avoid overexposure to dollar exchange rates. So I have to so more research to find euro companies with attractive yields.

I’m curious how my portfolio will develop next year and if I will be able to realize my targets while keeping my portfolio balanced.