I forgot to add one purchase to my November report, because I had it planned for December. I executed this trade early, because of price drop of Macquary Infrastructure Company at the end of November.
I purchased 5 shares Macquarie Infrastructure Company at a price of $39,29 to reinvest the dividends I received this year. Macquarie Infrastructure Company is paying a dividend of $1 per quarter. As a result the yield is 10,2%. My yearly dividend will increase with $20 due to the purchase of these shares.
Due to the purchase of these 5 shares the total number of Macquarie Infrastructure shares I own is now 47.
Today Macquarie Infrastructure Company announced that the Q4 dividend will be increased from $1,42 to $1,44. Macquarie Infrastructure Company also announced the dividend outlook for 2018 will be decreased to $1,00 per quarter.
The explanation for the dividend cut:
“In addition, we have made the decision to reduce our 2018 dividend in favor of internally funding the repurposing of the assets at International-Matex Tank Terminals and to take advantage of the incentives to invest in growth projects that are a part of recent tax reform,” Frost added. “We believe that our guidance for a dividend of $1.00 per share, per quarter, in 2018 strikes a balance between continuing to return the majority of our Free Cash Flow to shareholders in the form of a dividend and strengthening our balance sheet in support of future dividend growth.”
Due to the dividend cut the share price of Macquarie Infrastructure Company is down almost 40%. I decided to double my position in Macquarie Infrastructure Company from 21 to 42 shares and bought 21 additional shares against a price of $39,51. Based on a quarterly dividend of $1,00 the shares have a yield on cost of 10,1%. For speculative reasons I increased my number of shares.
The dividend reduction from $1,44 to $1 per quarter is resulting in a decrease in estimated yearly dividend income of $36,96
The purchase of 21 shares is resulting in an incrase in estimated yearly dividend income of $84.
I do consider this purchase speculative. Although Macquarie Infrastructure Company is saying the want to use the cashflow to fund projects which should normally result in additional cashflow in the future, I’m not sure this is the only reason, becausee altough interest rates are rising, they are still low compared to historic rates.
I personally buy sometimes extra shares at the moment the price is going down a lot speculating on an overreaction in the market. Only the future will learn me if this was a good or wrong bet.
With this purchase my average purchase price decreased from $69,61 to $54,56. Estimated yield on cost will be 7,33%.
After the sales of 12 shares Verizon and some dividend income, I have same funds available to reinvest. The available funds I used for the purchase of 14 shares Macquarie Infrastructure Company at a price of $65,99.
I already owned 7 shares Macquarie Infrastructure Company so after this purchase I have 21 shares.
The weighted average purchase price decreased from $76,84 to $69,61. With this purchase I added an estimated yearly dividend income of $79,52 to my portfolio. The yield on cost based on a yearly dividend of $5,68 per share is 8,16%.