Dividend Income: September

September has been an amazing month for me, like I said in my previous post, it was time for summer holiday! Three and a half weeks of travelling through South Africa, has proven to be a magnificant experience. While I have travelled extensively in the past, South Africa went straight to my top 3 favorite destinations ever. It really has everything one can ask for; amazing wildlife? Check. Great food and wine? Check; Beautiful beaches? Check; Impressing landscape? Check; And of course everything is crazy cheap compared to back home. All in all I had a great time and made tons of pictures (3000+), with which I will not bother you too much.

Play dead Surrounded Choo Choo DrakensbergAs said before, the best part about Dividend Investing is that you secure a nice and steady income that not much more effort than just waking up each morning. Of course this also holds true for vacation, so while I was enjoying the beach or searching for wildlife my portfolio kept on working. And even beter, I got a pay raise! Lockheed Martin decided to increase its dividend!

September was a good month in terms of dividend. my second highest month since I started this journey.  With this month I am now comfortable that I will make my goal for this year of €2000,- in dividend income. In total I received €292,81 in dividend.

Total Dividend Income September

Last I started a position in Deere early September 10 share a $81,98

 

 

More

Dividend Income: August

A bit later than usual, but not less interesting: the monthly dividend report! August was interesting in the sense that it was the start of my second “three month cycle”. What I mean with that is that I now had three real months of pursuing this new strategie (May/June/July) and since most companies pay quarterly distributions August was the first month that I could actually compare to a previous month (May). And I like what I see!

Total income has risen from €205,53 to €218,27. Part of this can be atributed to the addition of new stock (AT&T) part can be atributed to the weakening of the Euro compared to the Dollar, and part can be atributed to Dividend increases! That is a healthy increase and brings me another step close to the goal of generating €850,- of dividend per month.

Total Dividend Income August 2014

Furthermore I started a position in Copa Holdings and bought 7 shares a $126,69. Copa had been on my radar after it appearing on the screener a couple of times. However I never acted on it, asI was always able to find something more attractive at that point in time. However the pullback in early august from $150 to $125 presented me with the buying opportinuty I was waiting for.

Last, don’t expect any more posts from me for the coming month as I am leaving on a great three week vacation to South-Africa later this week. A great opportunity for me to relax from a few crazy months at work and pursue one of my hobbies: Photography! With a week of Safari I sure hope to run into some amazing animals and take some great photo’s of them!

 

More

August Tidbits: Dividend Screener / Liebster Award

First, The dividend screener has been updated again. I hope it will provide you with some new interesting companies to dive into.

Second, Dividend for Starters nominated me for a Liebster award. The idea is that by asking other bloggers questions, not necessarily having anthing to do with the topic of their blog we can get some deeper insight in the person behind the blog. Since the dividend-investing community is quite strong and has been a great support on my journey  I am happy to accept the nomination and answer the questions posed by Dividend for Starters.

1. Did you try other methods of investing before getting into DGI?

I have been investing (some may say speculating) for the last ten years. However I never had a real strategy with regards to my investments. I could be triggered in buying shares of a company by basically anything. a blog post, an article in the paper, a friend suggesting me something. And of course I had no idea on how to perform any form of due diligence. Needless to say I had a few big wins and a few big losses, but never really had the feeling that I was getting somewhere. That is why I decided to sell all my shares earlier this year and started with this new DGI strategy.


2. What’s your favorite movie?

I am an enormous movie enthousiast. In fact I dedicated a whole room in my house in order to have my own “Home Cinema”. So picking a favorite movie feels like choosing between your children. So instead I will provide you with a top ten. Just be aware, that if you ask me the same question again tomorrow the list might have changed.

  1. Big Lebowski, The (1998)
  2. Donnie Darko (2001)
  3. Se7en (1995)
  4. Eternal Sunshine of the Spotless Mind (2004)
  5. One Flew over the Cuckoo’s Nest (1975)
  6. Before Sunrise (1995)
  7. Orfanato, El (2007)
  8. Abre los Ojos (1997)
  9. Fight Club (1999)
  10. Rubber (2010)


3. If you have a spouse, does he or she support you with this journey?

I do live together with my girlfriend (who I have been together with over 10 years). While she doesn’t have the slightest interest in investing, see does appreciate the new dividend income stream that she sees coming to our accounts on a monthly basis. That is the good thing about dividend investing, it might be hard to get people warmed up for theoretical gains, but it is really easy to get someone enthousiastic when they see hard cash hitting their bank account month after month without having to do anything for it.


4. Which book are you currently reading?

Currently I am reading “Il Principe” from Niccolò Machiavelli. It is one of those classics I feel everyone needs to have read at one point in his or her life. It gives some great insight in what Machiavelli would consider necessary for any effective ruler.

5. What’s your opinion about Bitcoin and do you own any?

I bought a few bitcoins a few years back, but lost my “Wallet”. So in theory I still have a few thousand euro of investment money lying around, but in practice I have no clue where it is. I bought the bitcoins a few years back because I considered it an interesting development, and have a great interest in anything new related to technology. As an investment I stay away from bitcoins as far as I can. It is way to speculative to my liking, and it doesn’t meet one of my most important investing principles. It doesn’t give me any dividend or income!

More

Every cloud has a silver lining

The last week has been hard on probably all of our portfolios. At least I’ve seen my net worth drop considerably. Some of my shares have dropped over 6% in under one week, the worst performance since I started this journey. I’ve seen people get stressed for a lot less. And while it always hurts a bit to see all the companies you’ve invested some hard earned cash in, it only takes a little while before the ratio kicks in and I start to see the silver lining.

As I have previously said, I track the value of my portfolio only because I am a sucker for statistics and not so much because it steers my investment decisions. The main reason for this is that in theory I have a buy and hold for ever strategy. In theory I plan on never selling any of my stock the only exception would be if a company no longer increases (or worse decreases) their dividend payout, or if some enormous paradigm shift or change in environment leads me to believe that the company I’ve invested in is operating in a business that will lose its relevance in the near future (and with its relevance also its profitability).

Since I do not invest with the idea of selling my position at a later point in time for a higher price, but only invest with the idea to receive a higher dividend payout year after year, the actual price of my shares after the initial acquisition becomes pretty much irrelevant. In fact for two large reasons I am better off the lower the prices get!

First off Dutch Tax Law forces me to pay 1,2% of the value of my portfolio on January 1st of each year in taxes (of everything over +/- €20.000). So if my portfolio is worth €60.000 on January first, this means I’ll have to pay (60.000-20.000)*0.012 = €480 in additional taxes. If the value of my portfolio however declines by 10%, I pay only (54.000-20.000)*0.012 = €408. So I would pay less tax, while in the meantime my dividend income remains unchanged. A fall in portfolio value therefore has not effect on my income, but decreases my costs. That sounds like a great deal to me.

Secondly, and we are probably all aware of this but it never hurts to read it once more, if I considered investing in a company two weeks ago with a P/E value of 15 and a dividend yield of 3% and now the share price dropped 10% because of some non-company specific forces, I will be only getting a better deal! Without any company-specific fundamentals changing, the P/E just went down to 13,5 and the yield went up to 3.3%. So while my €1000,- bought me €30,- dividend two weeks ago, I can now buy €33,- of dividend for the same €1000,-.

In the end a market correction like we have seen in the last week (and who knows how long it will continue) on the one hand decreases my costs, while on the other hand it allows me to buy more future income of the same amount of money. As long as you are not investing with the hope of selling shares for a higher price at a later stage, but follow a buy-hold for ever strategy that so many of us have, a market correction is not something to fear or to get depressed about, but an opportunity!

More

Dividend Income: July

Another month, another healthy amount of dividends coming my way. For the first time since I started my dividend growth investment adventure, I didn’t manage to increase upons last months income. The reason for this is not because July has been a particular bad month, but that June was an extraordinairy month. My largest singele holding (Vanguard High Div ETF) distributed dividend last month, and my second largest holding (MAIN) distributed a special dividend. July however had none of these “special” events, so my dividend income reverted back to normal.

So what is normal? At this point my “normal” is around €200,- per month in dividend income. I don’t expect to see any more months that will sginifcantly drop below €200,-. This is now what I consider my baseline, and it is this baseline that I want to grow to €850,- in the next 10 to 15 years. In order to make sure I make these goals, I will keep on investing in new dividend growth stocks whenever I have some spare cash. This month I initiated a position in Lockheed Martin and McDonalds, which ensures me another healthy amount of dividend in the coming years.Dividend income julyThis month the total dividend income was €198,31 again not bad for doing nothing more than waking up in the morning. In total so far this year I have received €902,34 in dividends, which leaves me with just five more months to achieve my goal of €2000,- in dividend income in 2014. It will be a close call whether I’ll make it, but I remain optimistic.

 

More

July Buy: Lockheed Martin (LMT) and McDonalds (MCD)

This month I started a position in two new companies. Lockheed Martin (LMT) and one that has been on my wish list ever since I started dividend investing: McDonalds (MCD). Especially McDonalds has proven to be a fan favorite among dividend investors for decades. Both companies showed up in my short-list created via the dividend screener and after some additional research into these stocks I felt comfortable starting a position.

Lockheed Martin (LMT)

My first buy this month was Lockheed Martin, a company best known for their presence in the Aerospace and Defense field. The largest part of their revenue comes from their activities as a defense contractor.

Lockheed Martin has increased their dividend distributions now for 11 consecutive years and showing double digit numbers for all of these years. The last increase being 15,65%, and the ten year dividend growth rate being 23,5%. Combine that with a juicy yield of 3.33% at the time of buying, and we are looking at some real potential here. Furthermore the payout ratio is still below 60% (one of my criteria when searching for potential stocks).

Below a quick comparison to competitiors on some metrics:

Lockheed LMT comparison_v2

A negative side of Lockheed however is the fact that revenue has been declining for the last two years, however in Q2 EPS has seen a small growth.

The below graph gives you a nice inidcation of how dividend has been growing in the last 10 years.

6 shares bought on July 3rd  at $160.00

Lockheed LMT Dividend Growth

disclaimer: Some people have told me that I am technically not allowed to invest in LMT due to them producing cluster amunition. I was however not able to confirm this, and since my Dutch broker allowed me to buy shares I would be highly supprised if this indeed is not allowed.

 

McDonalds (MCD)

McDonalds doesn’t need any introduction and has been on my wish list ever since I started this adventure.  I have been waiting for some pressure on the share price to open a position and today finally was that day, the not so impressive Q2 results provided me with the entry point I was waiting for.  Of course you can argue that the Q2 results are a reason to not open a position, but to me the fundamentals still look strong.  And to be completely honest, I just wanted this powerhouse in my portfolio. This might be the first time I acted on gut feeling more than on logic. But then again, there are worse companies to take a leap of faith with.

15 shares bought at July 22nd at $95,30

More

Dividend Screener: June Update

A new month also means a new CCC-list from David Fish which serves as a basis for the Dividend Screener. As a result all numbers have been updated to be again in line with the latest CCC update. Since I first published the Dividend Screener I have received tons of feedback (for which I am grateful!) even David Fish himself took some time to pinpoint potential improvements. While I haven’t been able to implement all suggestions just yet (I will keep working on that), I did make some changes. A much heard feature requests was to be able to have a simple method of excluding MLPs and REITs as they sometimes skew the results since they abide to different rules than your typical stocks. Furthermore, an additional layer of filters on industries has been added in order to enable you to further drill down in the data.

Using the screener I got a few stocks I will take a closer look at this month to decide if they are worthy of my hard earned cash. Most notably I will look into Textainer Group Holdings (TGH), Rogers Communications (RCI), Coach (COH), Lockhead Martin (LMT), Tupperware (TUP) McDonalds (MCD) and General Mills (GIS)

Again please don’t shy away from adding any feature requests or providing feedback.

The updated versions is now available for everyone on its dedicated page here.

 

 

More

Dividend Income: June

Last week I have been on a quick vacation to Barcelona, Spain. Which explains the lack of new posts over the last weeks. The great part about my vacation was that it was almost completely free!

My day time job makes me travel the world on a regular basis. While this means I at times get to spend very little quality time with my girlfriend/friends/family, it also alows me to practice my greatest hobby photography on a regular basis and lets me shoot great scenes from around the world! An additional added benefit of all this travelling is the fact that I accumulate hotel and airline points. Points that can be redeemed for free nights in hotels and free flights.

So that is why my trip to Barcelona was almost free, redeeming my points I was able to book a +€800,- a night suite in one of the best hotels in Barcelona for exactly €0,-.  Of course I would never endulge myself in this kind of luxury if I had to pay for it, but like for free it was a great experience that my girlfriend and I will have fond memories of for years to come!

Now back to the important part. Dividend income! June was a great month for me. My largest single holding (Vanguard High Div ETF) distributed dividend and my second largest holding (MAIN) had two distributions this month, first the regular monthly 0,5% and later an additional 0,86% special dividend.

So how is the month looking as a whole?

dividend june

 

Wow! €428,38 in total income. That is just over 50% of my goal in 10 to 15 years! Of course this is an extraordinary month and I know next month will not come close to this, but is this encouraging or what? €428,38 in net income, that is more than I received in salary increase over the last three years! With that money I could do all my groceries, pay half my mortgage or take care of all my insurance bills. But the best part is that I don’t need to use that money for any of that, I can reinvest it directly in new money making machines!

I will update the screener later this week, and will use it to pinpoint some potential targets for me to reinvest my received dividend in! Please, let me know if there are any candidates you have already identified.

 

More

May Buy: Target (TGT) and AT&T(T)

Following my previous post discussing AT&T and Verizon and some further research done on my part I felt comfortable enough to start a small position in AT&T. With its low P/E ratio, High Yield and them actively pursuing new business opportunities (Direct TV), I felt that AT&T at this point is the best play in the telecommunications sector.

Added 25 shares which is now reflected in my portfolio

As I received some extra cash last month (in the Netherlands in May you typically receive an extra months pay in what they say is “vacation money”) I was able to do a second investment this month hooray!. Using my dividend screener I identified a couple of potential targets (CVX, XOM, TGT and WMT) that suited my rough criteria. Given that I have already some positions in the energy market with KMI and BP and am still in the process of diversifying my portfolio over more industries, CVX and XOM didn’t really qualify. As a result I had to choose between Target and Wal-mart, and in all honesty Iwas quite indifferent about which one to pick. Luckily Target helped me a great deal in my decision by increasing their dividend with no less than 21% to $0,52, that was a lot more than I was expecting (8%-9%) and brings the total yield at +/- 3.6%.

Added 17 shares which is now reflected in my portfolio

More

The Dividend Screener

UPDATE 2: Contenders and Challengers are now added. Just select them in the top right

UPDATE June 11th. Based on the first feedback I have added the possibility for you to determine on basis of which metric the color intensity and size is calculated.

As so many of you I drift towards David Fish’s CCC-list every month to get myself some updated figures and start to do some number crunching in Excel. In the last four months it has become a ritual, not much different than looking at my monthly expenses or checking how the month treated me in terms of dividend income. Making sense out of all the different numbers in the spreadsheet can however be a bit challenging. There is so much too look at, that it can be hard to distill from those numbers the great companies that might be worthy of your next investment.

In my daytime job as a Technical Forensic Analyst, where I work on fraud investigations, a large part of my work revolves around visualising large amounts of data in a way that makes it easy for people to understand how a certain fraud was commited or what the impact is. This weekend while I was enjoying the sun, I had a sudden realisation: why not use my experience and passion for data visualisation to help people go through the CCC-list! And even if noone finds it useful, I can always use it myself!

Please find below the very first iteration. It is still very much a work in progress, and really hope that you can provide me with feedback. What kind of filters do you want? Do you want an interactive table that will let you compare key metrics between companies in the same industry? Pretty much anything is possible. So please don’t feel shy and tell me how your perfect screener would look like.

For convenience purposes I embedded the screener to this post, but in the future the screeener can be found on its own dedicated page.

(more…)

More