Purchase 250 shares Enbridge Energy Partners

This week I bought 250 shares Enbridge Energy Partners at a price of $9,78. The current distribution of Enbridge Energy Partners is $0,35 per quarter. With this purchase I add $350 to my yearly estimated dividend income, but because I’m not exactly 100% sure about the withholding rate and/or if the tax threaty rate with NL is used I deduct the MLP withholding tax rate of 39,6% for now and book in an estimated dividend income of $211,40.

Enbridge Energy Partners is an MLP, a limited partnership that is publicly traded. An MLP combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. To obtain the tax benefits of a pass through, MLPs must generate at least 90% or more of their income from qualifying sources such as from production, processing, storage, and transportation of depletable natural resources and minerals. In addition, real property rents also qualify.

An MLP is not paying federal tax, but as unitholder, Dutch/foreign unitholder, I now expect to fill out some beautiful papers called 1040NR / Schedule K1. Also I have to apply for an Individual Taxpayer Identification Number (ITIN). Reading up about this tax paperwork was challenging, because I really had a hard time finding information usefull for me as Dutch citizen.

This is my first and for now last purchase of an MLP. I will first check next year how things go regarding the tax return and based on my experience with filing for tax return I will decide if it’s worth adding more MLP units to my portfolio in the future or if the paperwork is just not worth it and it’s better to close this position.

Purchase 17 shares Coca-Cola

Yesterday I for the 3rd time bought shares Coca Cola. This time I bought the shares against price per share of $42,20. I now own 39 shares Coca-Cola with an average purchase price of $44,37. With this purchase I add $26,52 to my yearly estimated dividend income.

While writing this post I realized that previous time I bought more Coca-Cola shares at the end of January, I bought them at price just 20 cents below the 52 weeks high, actually even a 5 year high. Now I add the shares close to the 52 weeks low of Coca-Cola which is a much better moment to add shares.

I now bought shares Coca Cola 3 times:

1st purchase: 15 shares @ $44,95
2nd purchase: 7 shares @ $48,41
3rd purchase: 17 shares @ $42,20

The current yield on cost based on the weighted average purchase price is 3,52%.

Rebalancing my portfolio by selling a few small positions

Today I sold:

10 shares Macquarie Group LTD @ AUD 111,60
45 shares Ryanair @ €15,49
3 shares Stamps.com @ $248,05
3 shares Berkshire Hathaway @ $200,14

Basically these are 4 small positions in my portfolio. Nowadays I consider positions below €1.000 small. These small positions are a leftover from the year I started with investing in stocks on a monthly level. At this time I had the tendency to buy 2 or 3 different stocks a month to be able to diversify my portfolio.

The 4 stocks listed above are not in the first third of my watching list. So I don’t expect to increase the size of the positions in this year. Also I have problems keeping informed about Macquarie Group, because Australia is far away and I rarely have articles or reports to read about Macquarie Group.

Although I’m pleased with the peformance and dividend of Macquarie Group I still decided to sell this position, because I consider it important to have articles and analysis availble so I have other sources than the presenations published by this bank itself.

As a result of my experience with Macquarie Group I added a rule to my personal investing guidelines to also ask myself the question if enough publications from others sources than the company website are available so I keep myself challenged in making an assessment if I can find enough articles about a share I’m considering buying.

As a result of closing these small positions I will be making another stock purchase later this month.

Purchase 30 shares Dominion Energy

This week I bought 30 shares Dominion Energy at a price of $65,19 per share. Dominion Energy is currently paying $3,34 in dividends per year. The yield on cost of the Dominion Energy purchase is currently 5,1%.

My yearly estimated dividend income will increase with $100,2 or €83,50 against the current USD/EUR exchange rate.

Dominion Energy is currently 23% below the 52 weeks high reached in December 2017. The share price of Dominion Energy did start to go down since an all stock merger with Scana Energy was announced. Scana shareholders will receive 0.6690 shares of Dominion Energy common stock for each Scana share.

Scana is in financial problems due to a failed project regarding the development of a nuclear power station. Dominion Energy share price is probably under pressure due to investors expecting a high risk on claims for Scana, but it seems that Dominion Energy has itself shielded against liabilities regarding this project due to setting as requirement for the merger that the transaction is contingent upon South Carolina approval of proposed nuclear solution

I considered buying Scana shares to take advantage of the discount compared the merger offer, but at the moment I consider this not in line with my risk profile, because if the merger fails it brings a high risk of banktruptcy for Scana.

15,9% Dividend Increase Apple

Recently Apple announced an increase of their quarterly dividend from $0,63 to $0,73. This is an increase of 15,9%. The yearly dividend will be $2,92 per share.

I own 10 Apple shares so my estimated dividend income will increase with $4,00 as a result of this dividend increase. My yield on cost after the dividend increase will be up from 1,8% to 2,1%.

April Dividend Report

Monthly Report April:

My April 2018 dividend income reached a total of €289,85. This is up 364% from the €62,40 I received in April 2017. The increase is mainly due to new stock positions in Fortum, Aena and l’Oreal and an increased position in Wereldhave compared to the previous period last year.

I ended April 2018 with a porfolio value of €50.218.

Dividend Income – €289,85:

– Fortum €110,00
– Wereldhave €42,35
– Aena €39,00
– l’Oreal €21,30
– Brown-Forman €20,45
– Novo Nordisk €19,67
– LVMH €10,20
– EPR Properties €8,74
– Coresite Realty €7,93
– Coca-Cola €6,99
– Brown-Forman €3,22

Transactions:

– Purchase 50 shares Flow Traders @ €32,44 (+€32,50 yearly dividend)
– Purchase 5 shares Johnson & Johnson @ $126,90 (+$16,80 yearly dividend)
– Purchase 42 shares Enbridge @ $29,79 (+$87,97 yearly dividend)
– Purchase 48 shares Enbridge @ $31,98 (+$100,54 yearly dividend)
– Sale 200 shares Washington Prime Group @ $7,04 (-$200 yearly dividend)

Dividend Changes:
– l’Oreal yearly dividend 7,6% up from €3,30 to €3,55 (+€1,50 yearly div)
– LVMH yearly dividend 25% up from €4,00 to €5,00 (+€3,00 yearly div)
– Unilever yearly dividend 8% up from €1,43 to €1,55 (+€2,30 yearly div)
– Johnson & Johnson quarterly dividend 7% up from $0,84 to $0,90 (+€3,60 yearly div)

2018 Target Status:
I’m at €8.700 out of €18.000 deposit target (48,3%)
I’m at €604,01 out of €2.200 dividend received target (30,2%)
I’m at €400 out of €5.000 extra mortgage repayments (8,0%)

Purchase 50 shares Flow Traders

This week I bought 50 shares of Flow Traders at a price of €32,44 per share. Current yearly dividend is €0,65 per share so with this purchase I add €32,50 to my yearly estimated dividend income.

Flow Traders is liquidity provider specialized in exchange traded products. I bought the shares of this company, because I expect that they will continue to benefit from the current volitility on the stock exchanges. The income of Flow Traders is mainly the spread between the bid and sell rate of exchange traded products. Due to the recent volatility in the market the first quarter net profit increased from €13,6 million 1Q17 to €109,7 million in 1Q18. This and EPS of €2,36 which brings the PE ratio just based on the Q1 results on 13,7.

I expect that the stock exchanges stay volatile for some more months at least and expect Flow Traders to be a good addition to my share portfolio. Although this stock will be cyclical and EPS will vary a lot based on volumes on the various exchanges where Flow Traders is active.

Yield on cost with the current dividend will be 2,00%.