New purchases due to rebalancing of portfolio

My girlfriend and me purchased a new house this month and as a result we both decided to take part of the value from our stock portfolio’s as we tend to don’t like to have high fixed costs in a mortgage.

As a result a sold some positions and also did some extra sales to buy new stock to keep a proper sector allocation.

5 new companies were added to my portfolio

Münich RE (MUV2.DE)

Münich RE is a German reinsurance company. Current yield is around 4,3%. Dividend is paid only once per year.

I purchased 10 shares in Münich RE and this should result in €98 per year in dividend income.

Tencent (NNND)

With Tencent I increase my allocation to China and the Technology sector. Tencent is a Chinese conglomerate with many different activities. Tencent is the world biggest video gaming company, but also big in social media in China with WeChat.

A minus of Tencent is that the company is difficult to comprehend as they have hundreds of minority shares in other companies.

I purchased 40 shares on the Frankfurt stock exchange. The dividend yied of Tencent is currently 0,26% so my dividend income will only increase by $5,60.

LEG Immobilien (LEG.DE)

With LEG Immobilien I add one more German company to my portfolio. LEG Immobilien is an real estate investor focussing on residential properties. LEG is owning over 130.000 residential objects in Germany.

I already own various REIT’s, but none focussing on housing. Where often the dividend of real estate investors is often higher than their EPS, this is not the case for LEG.

German companies are often conservative in their payout ratio and this also applies to LEG Immobilien. Current yield is 3,0% with a payout-ratio of 25%.

I purchased 17 shares LEG Immobilien resulting in €61,20 extra dividend income per year.

AvalonBay Communities (AVB)

With AvalonBay Communities I add a second investor in residential properties to my portfolio, but this time with exposure to the American market.

Yield of AvalonBay is currently 4,0%. As a result of the 14 shares I expect to receive $89,04 in dividend per year from AvalonBay Communities.

Gilead Sciences (GILD)

Gilead Sciences is already for a long time on my watchlist. I’m waiting for a long time in a attractive price to start a position. I like the position Gilead sciences has in the HIV market.

From an investors perspective this market is very attractive as HIV is a chronical disease and a customer will normally be a customar for live.

I purchased 30 shares Gilead Sciences which will increase my yearly estimated income with $81,60

Purchase 30 stocks Tencent

Tencent Corporate Logo

Normally I tend to place my monthly stock purchase at the end of the month just after I received my salary. This month I’m early. I planned to buy this month Tencent (NNND)stocks and I placed a limit order almost 5% below the current price. Last days the price of Tencent dropped and I got 30 shares at a price of €34,86 at the Frankfurt exchange.

Tencent is not really a dividend stock, so not a regular stock pick for me. This buy is more a purchase against the current sentiment in the market which is negative for Tencent. Tencent is down 30% from it’s highest price this year. I have Tencent a long time on my watchlist, because it’s a company with a strong position in China. Tencent has a strong moat in China with the WeChat app. The Chinese market is still difficult to enter by foreign companies so it’s my opinion that Tencent won’t experience any competition from Facebook or Alphabet on their homemarket.

The advantage is possibly also a weakness. The Chinese government is softly said not a big fan of the gaming market and lately Beijing is restricting gaming approvals. Near-term there are regulatory challenges in China, but for longer term overall industry growth prospects within Asia are very solid.

With the purchase of Tencent stocks I gain more exposure to Technology and China exposure.

Tencent payed a dividend of HK$0.88 per share over 2017. This is approximately €0.10 per share. As a result of purchasing 30 Tencent shares my yearly expected dividend income will increase with €3,00. The yield on cost based on the current dividend is 0,29%.