Dividend increases of my stock holdings

Since 2009 I have been building an investment portfolio consisting of dividend paying stocks with the purpose to transform it in an ever growing passive income machine over time.

Today, my stock portfolio consists of more than 30 positions and has a market value of well over USD 150’000. But more importantly, the companies in my share portfolio have returned a total of USD 20’000 in dividends since 2009 and will provide at least USD 4’500 in fresh cash for 2017. I expect my annual dividend income to continue to grow by 15 % on a Year on Year (YoY) basis. Half of that growth will derive from new positions (see My stock investments in 2016 and My 6 Investments made so far in 2017) and the other half is expected to come from organic dividend growth and dividend reinvestments (see Passive Income review 2016 and Outlook).

So far, all businesses in my investment portfolio have published their semester 2017 results and given information regarding dividend payments to be expected. That allows me to make some projections regarding organic dividend growth and my expected Yield on Cost (YoC) in 2017 regarding these positions which I sumarised in the chart above.

I calculate YoC on the basis of the net cash payments I receive resp. received from my stock holdings during 2017. For reasons of simplifications, I do not (yet) take into account reimbursements with regard to witholding taxes in the YoC-numbers. The Swiss witholding tax on dividends for instance is 35 %, quite hefty, but I can lower that tax rate to 15 % on the basis of a tax treaty. These reimbursements will take place in 2018.

My portfolio is denominated in Swiss franc and I hold major positions in EUR, USD and GBP so there might be some devations e.g. with regard to my projections concerning YoC due to exchange rate fluctuations. Over the long term, these fluctuations will smooth out and of course as an investor in the accumulation phase, a strong Swiss franc towards other currencies is a real blessing (see also The day when my portfolio dropped by 15 %).

Consumer staples

My 2017 YoC regarding Nestlé is around 3.8 %. After the reimbursement regarding the Swiss witholding tax that yield will substantially increase to 4.9 %. Nestlé hiked its dividend quite modestly by  2.2 %. In my view, slowing dividend growth is nothing to lament about as long as stocks of a solid company have been acquired at a fair price and such investment is held for the rong run.

The British company Diageo is the world largest producer of spirits (Johnnie Walker, Smirnoff, Baileys, Captain Morgan etc.) and of beer (Guiness). Diageo will reward shareholders with a nice dividend hike of 5 %. The company offers a Dividend Reinvestment Program (DRIP) allowing me to get my dividends in additional stocks. I expect the compound effect to work quite well in my favour over the next decades and substantially increasing my position in that wonderful company.

Unilever has been a very solid and reliable dividend payer in the past years and I expect it to be so in future. After the announced dividend hike of 12 %, my YoC will stand at 3.8 %. My holding in Unilever is in GBP which has depreciated quite a lot against the Swiss franc. Without that devaluation, my YoC would be significantly higher (but again to be clear, I am not complaining about a strong Swiss franc). Unilever’s brand portfolio with household names and products such as Lipton Ice Tea, Axe, Rexona, Knorr, Persil etc. is just amazing and – taking a long term view – fundamentals look very bright for that company.

In February 2017, I acquired 45 shares of the world second largest beer producer Heineken at a price of EUR 73. For me, it is the ideal long term investment. In addition to its core brand Heinken, the company has over 250 international and regional brands (Desperados, Sol, Tiger etc.). The business is very well positioned for further growth. Heineken offers a broad economic moat and stable free cash flow of which around 30 % is returned to shareholds each year. Heineken announced to increase its dividend by 3 %.

I am well aware that Coca Cola’s growth is slowing. The company is in the midst of a huge transformation process refranchising its bottling operations and adapting to changing consumer taste.Taking this into consideration, the announced dividend of over 5 % is quite decent. My YoC will stand at 2.5 % (net of taxes) and I expect that rate to climb quite nicely over time. Looking ahead, I am very optimistic Coca Cola to become a leaner and significantly more profitable company with an even bigger brand portfolio and a broader economic moat.

Imperial Brands hiked its dividend by 10 %, putting my projected YoC for 2017 to over 4.5%.

ReckitBenkisser boosted its dividend quite significantly by 14 %, projected YoC lies well above 2.5 %.

The J.M. Smucker Company elevated its dividend by 4 %, YoC currently stands at around 2 %.

Pharma

Like Nestlé and Coca Cola, the two Swiss pharma companies Novartis and Roche showed slowing growth in the past years. My YoC regarding Novartis lies at 3.3. % for 2017 and at 3.8 % for Roche. If I took into account the reimbursement of the Swiss witholding, the yield of Novartis would be 4.3 % and for Roche 4.9 %. So I am really not complaining about the modest dividend increases (Novartis hiked its payout by 2 % and Roche by 1.2 %). As long as the business fundamentals and the cash generation machines stay intact, I am more than happy with these two companies.

The British pharmaceutical company GlaxoSmithKline (with brands such as Voltaren, Panadol, Sensodyne, Aquafresh etc.) offers me a very decent YoC of 5.1 %. In combination with the company’s DRIP my stock count will increase significantly over the years.

Bayer operates in the segments pharmaceuticals, crop science, animal health and consumer health with well-known brands such as Aspirin, Alka Selzer, Bepanthen, Elevit, Supradyn, Rennie etc. Like in the previous years, the company increased dividends again quite nicely by 8 % and I expect it to do so in the future increasing my current YoC of 1.8 % over time.

Insurances

Over the last years, my insurance investments have paid off quite handsomely. Zurich Insurance (7.8 %) and Swiss Re (4.1 %) offer very attractive dividends and very decent YoC (especially when the reimbursement of the witholding taxes is taken into consideration). These cash dividends have provided me with fresh funds to invest into new holdings in the past years and will so in the future.

Industrials & construction

The Swiss technology company OC Oerlikon provides industrial solutions for the efficient production of food, clothing, transportation system, infrastructure, energy and electronics. It’s a very cyclical business facing some headwinds in the near term, so no surprise that there won’t be a dividend increase. Nevertheless, since I entered into my position in that company some years ago, I have been rewarded quite handsomely. Current YoC stands at 4.3 %.

My acquisition of stocks of the the Swedish-Swiss technology company ABB (Asea Brown Boveri) goes back to 2010. My YoC has steadily climbed, currently standing at 3.8 %. ABB is quite well positioned for future growth engaging in robotics and in the areas of power and automation.

From the perspective of a former shareholder of the Swiss construction company Holcim, the new company LafargeHolcim has a lot to prove after the merger with its French rival Lafarge in 2015. The acquisition has been expensive and and debt load has increased significantly. The combined company will have to realise synergies, optimise its cost structure, deleverage and – hopefully – take care of attractive shareholder returns over the years. LafargeHolcim presented solid first Semester 2017 results which looked quite promising to me. The company increased its dividend by 33 % and announced the start of a share repurchase program.

Telecoms

Deutsche Telekom has been a very attractive investment so far, offering me a nice YoC of 4.1 % after a dividend hike of over 9 %. That yield is particularily high taking into account the depreciation of the EUR against the Swiss franc since 2009 when I bought the stocks. At that time, the EUR/Swiss franc exchange rate was 1.4, today it stands below 1.1. Over the last eight years, I have collected dividends representing more than 40 % of my initial investment in that company.

Telefonica’s announced dividend cut is very unpleasant, causing my YoC to fall to 3 %, but was of no surprise to me. In my Dividend Income Review November 2016 I stated that the high dividend payout level in combination with sluggish growth and weak credit profile is a drag to the company. In order to deleverage Telefonica had planned to sell some parts of its businesses and get significant funds through an IPO of its subsidiary O2 UK. After the Brexit vote in 2016, Telefonica scrapped that plan and aims to deleverage organically. This is in my view sensible, Telefonica does not need sell off parts of its business. Over the last years, I collected around 25 % of my initial investment in Telefonica and I am fine with the decision to set the dividend on a much more moderate yet more sustainable level. Over the medium and long term, Telefonica has attractive growth potential given its huge customer base (over 200 Millons) around the globe and strong position in extremely dynamic and attractive markets.

The French telecommunication company Orange reported solid first semester 2017 results and increases its dividend by 8 %. It’s a fine business in my view but I clearly overpaid when I acquired stocks in 2010. A high price in combination with the devaluation of the EUR against the Swiss franc and a hefty French witholding tax leads to a relatively modest YoC of 2.3%. But as said, I like the company and am optimistic about its long term growth potential.

Mining companies are back in the game

What a huge difference eighteen months can make. In spring 2016, amid collapsing resource prices, earnings of BHP Billiton and Rio Tinto came under enormous pressure, both company slashed their dividends quite substantially (in the case of BHP Billiton by around 70%). Streamlined operations in combination with a strong price recovery led to very solid financial performances of all mining companies in 2017. BHP Billiton more than doubled its dividend putting my YoC for 2017 to around 4 %, Rio Tinto’s YoC lies at around 4.2 % after a nice hike of 70 %. Both companies managed to generate enough cash to finance their operations, make investments, increase their payouts to shareholders and to reduce their debt level. South32 has been doing particularily fine since the spin-off of BHP Billiton in 2015, paying very attractive dividends which correspond to around 8 % of the market value of the South32 shares I received at the time of the spin-off.

Oil majors

Royal Dutch Shell acquired the British multinational oil and gas corporation BG Group last year and has made significant progress by improving free cash flow, streamlining the combined company and realizing synergies. It also began to deleveraging and will continue so over the years. I see tremendous potential in that company which is one of my most important dividend payer contributing over USD 500 per year which I consistently reinvest into the same company. Since 2009, my stock count has grown by over 50 %.

ExxonMobil increased its dividend by 3 % and Chevron by 0.7 %. I am quite optimistic that these companies will increase their dividend in the future given the recovery of the oil price and their improving Free Cash Flow.

Banks

UBS is the largest Swiss bank and experienced a deep transformation since the financial crisis shifting the company’s focus on wealth Management while downsizing its investment banking operations. The bank offers me a nice YoC of 3.9 % (last year even higher due to the payment of a special dividend).

The second largest Swiss bank Credit Suisse has been a huge disappointment to shareholders in the last years. The bank manouvred quite well through the financial crisis but significantly failed to take profit of its strong position. Credit Suisse missed to strenghten its core capital, to improve its cost structure and increase profitability. In my view it was very late, when the company finally decided to raise its capital and implement a fundamental transformation process. Over the next five years there is a lot of homework to do for that company. My YoC of 1.8 % is relatively low, and given the low market price I reinvest my dividends into the same company in order to increase my share count and average down the price I paid for the shares in 2010.

In my view the Spanish lender Banco Santander has bright growth prospects over the medium and long term. Three of the quarterly dividends are paid in cash and one payment is made in stocks if the shareholder chooses so. Given the latest solid dividend hike of 5 % I am quite optimistic that stock count and my YoC will steadily rise over the years,

HSBC will hold its dividend payments steady and continue its share repurchase program. The company offers a DRIP and given the high YoC of 8.2 %, my share count will inrease nicely over time.

Besides my stock holdings in financial services giants HSBC, Banco Santander, UBS and Credit Suisse, I have two small regional banks in my portfolio: Liechtensteinische Landesbank (LLB) and Verwaltungs- und Privatbank (VPB). These Liechtenstein banks with a strong focus on retail- and private banking made remarkable progress over the past two years with very solid top line and bottom line growth. LLB hiked its dividend by 6 %, putting my YoC to around 3.7%, dividend growth of VPB was even stronger (12.5 %), my YoC for that investment lies at around 5.9 % for 2017.

Media company

So far, Walt Disney is the only media and entertainment company in my portfolio and one of my favourite stock holdings. Fundamentals and growth prospects look bright despite some headwinds in the near term (see Disney is a wonderful company but is the Price fair?). After a strong dividend increase of 8 %, my YoC will stand at 1.5 % and – hopefully – climb over the years.

 

What about your stock holdings? Have there been some nice dividend hikes? Any dividend cuts?

Disclaimer

You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

6 investments I made in 2017

 

Hi, fellow reader, appreciate you stopping by.

In this post I want to give you an overview on our investments we have made so far during the year.

2017 Stock acquisitions

My family and I had a great time this summer, travelling and looking for interesting projects. And of course we have been shaping our finances even further. In July we were able to boost our monthly savings rate above 70 %, for the year our rate now stands at 65 % (my fellow blogger Mustachian Post runs a very inspiring Blogger Savings Rate Index (BSRI), check it out!). Continue reading 6 investments I made in 2017

Dividend Income June 2017

 

Over the first six months of 2017, my stock holdings have paid me the cummulative amount of USD 3’000 in dividends and I’m quite well on track for my full-year goal of USD 4’500.

In June, following eleven businesses from four different sectors paid me dividends in the the amount of USD 640 :

  • consumer staples: Unilever, J.M. Smucker and Imperial Brands
  • telecoms: Deutsche Telekom, Orange and Nokia
  • automobile: Porsche Automobil Holding S.E.
  • energy: Royal Dutch Shell, Chevron and ExxonMobil

Continue reading Dividend Income June 2017

Dividend Income May 2017

Another strong month in terms of dividend income.

Eight companies paid me around USD 800 in May (the Swiss Francs trades more or less at paritiy to the USD). Compared to the previous year that’s an increase of well over 10 % due to organic dividend growth (hikes) and reinvestments.

My projected dividend income for 2017 is around USD 4’500. Continue reading Dividend Income May 2017

Strong Dividend Income in April 2017

Leading a down to earth lifestyle, consequently increasing our savings rate and investing systematically are key elements of our wealth building process and of our journey to gain financial flexibility to pursue our dreams in life and to focus on things that really matter to us.

Building a passive income machine consisting of investments in businesses I like and holding them for the long run regardless market volatility has been extremely rewarding over the past eigh years. And it is a lot of fun. I just love receiving dividends and watch that cash flow increase over time. Continue reading Strong Dividend Income in April 2017

Dividend Income March 2017: BHP back in the game

Hi there, thanks for stopping by. It’s time for my monthly dividend income review.

Seven strong companies have contributed to my March dividend income in the amount of around USD 424 (the Swiss francs trades more or less at parity to the USD). Compared to the previous year, that’s an increase of 6.8 % mainly due to organic growth (dividend hikes).

And there’s some good news from my stock holdings. Continue reading Dividend Income March 2017: BHP back in the game

The flipside of high yield stocks

 

In 2009, marking the beginning of my path as a dividend growth investor I had put aside the amount of Swiss Francs 15’000 (CHF; trades more or less at paritiy to the USD) in savings and decided to buy stocks of following companies (CHF 5’000 for each position):

  • Deutsche Telekom (acquisition price: around EUR 9)
  • Nestlé (acquisition price: around CHF 36)
  • Royal Dutch Shell (acquisition price: around EUR 17)

These three investments in very different and unrelated industries (telecommunications, consumer staples, oil & gas) built the fundament of my stock portfolio at that time. Companies with very specific business models,  particular strengths and weaknesses and contrasting dividend policies.

I want to show you my returns (2009 – 2017) from Deutsche Telekom, Nestlé and Royal Dutch Shell and share my thoughts on investments in high yield stocks.

Holding Deutsche Telekom, Nestlé, Royal Dutch for 8 years – and much longer

When I made my stock acquisitions in 2009, the dividend yields of Deutsche Telekom and Royal Dutch Shell were well above 7 % whereas Nestlé’s was more modest, significantly below 3 %.

Including the projected dividends for 2017, Deutsche Telekom has paid me back around CHF 2’400 or almost 50 % of my initial investment . As of today, the stock price stands above EUR 16 which implies a book gain of more than 75 %. My engagement in Deutsche Telekom has been pretty rewarding so far, even more if you take into account the strong depreciation of the EUR against the CHF (in 2009 the CHF/EUR Exchange rate stood at 1.5, as of today it is 1.08). My total return (collected dividends & book gain) is almost 100 % of the initially invested amount of CHF 5’000.

Nestlé’s dividend returns were handsome as well. So far, I have received around CHF 1’500 in cash, representing 30 % of my initial investment. Nestle’s share price has more than doubled since 2009. My total return: almost 140 %.

Royal Dutch Shell has been my top dividend contributor from the beginning with a yield on cost of well above 7 %. I reinvest the quarterly dividends unless the stock price has risen too much (above EUR 30, I take the dividends in cash). My stock count increased from 200 to over 300 since 2009. Including the projected dividends for 2017, Royal Dutch Shell will have returned to me over 60 %  (roughly CHF 3’000) of the invested principal amount of CHF 5’000. Today, the stock price stands at around EUR 24.5 which represents more than 40 % book gain. My total return in CHF is around 80 %.

Dividend histories of Deutsche Telekom, Nestlé and Royal Dutch Shell

When you take  a look at the graph above, showing my yields on cost with regard to Deutsche Telekom and Nestlé, it is pretty clear, that both companies have completely different dividend policies- and patterns.

Nestlé has consistently increased its dividends for decades. From 2009 to 2017, my yield at cost slowly climbed from 2.33 % to 3.8 % (after witholding taxes, reimbursements not included!).

Deutsche Telekom in contrast shows a much less consistent dividend history, going back just to 1996. There were several dividend cuts in the past. From 2009 to 2015, my yield on cost fell quite significantly from 7 % to around 3.5 % in 2015 and has been climbing since then. Without the deprecation of the EUR against the CHF the decrease would have been less dramatic. But nevertheless, my yield on cost has been moving downwards compared to 2009. And yet, my investment has paid off quite nicely and the business outlook is promising. Since 2015, Deutsche Telekom has hiked it dividends by 10 %, in line with the development of the Free Cash Flow (FCF). Cash generation is robust and has been expanding in the last three years. But telecommunication businesses require huge capital expenditures (investments in networks etc.). Regulations (especially in the European telecommunication market) and tough competition put enormous pressure on margins.  FCF will certainly not be as predictable and stable as it is with consumer staples and I wouldn’t be too surprised if my yield on cost settled in a range between 3.5 and 4 % in the medium and long term.

Royal Dutch Shell has not cut its dividends since World War II and has been an extremely reliable cash machine, making generations of investors smile. Operating in a very volatile, cyclical business, the road to wealth by investing in Royal Dutch Shell has never been as smooth as with Nestlé. The dividend does not go up every year but nevertheless, Royal Dutch Shell has been very generous to shareholders for over 70 years.

Some considerations on high yield stocks

At the beginning of my path as a dividend growth investor I was particularily attracted by stocks with high dividend yields. Investing in Deutsche Telekom and Royal Dutch Shell seemed to me a no-brainer at that time providing nice (immediate and long term) returns and meanwhile showing a moderate risk profile.

Investing in high yield stocks can be very rewarding but only under the condition that

  • the purchase price makes sense and there is a sufficient margin of safety,
  • the company is particularily well positioned with a broad economic moat and
  • business fundamentals and cash generation remain intact for the foreseeable future.

If these criteria are not met, I would certainly not invest in that company as it poses the risk of tapping into a value trap.

High yield stocks are not “to invest and forget”. It’s not like participating in Johnson & Jonson, Hershey, Unilever, J.M. Smucker, Disney, Pepsico or Nestlé. These companies are extremely solid and provide such reliable and strong growth, that you can litterally count on being bailed out over the medium term even if you overpaid.

That’s almost certainly not the case with high yield stocks, even if you invested in the industry leader. Why is that?

Well, because more often than not there is a reason behind the fact that a stock has a high yield (let’s say over 5 %).

A high yield indicates pressure on the stock. There might be a near or medium term challenge e.g.

  • the market (over-) reacted to some legal issues
  • a transformation process is ongoing with some uncertainties with regard to the future earning power and risk profile of the company

or there might be some longer term headwinds such as

  • (new) regulatory requirements putting pressure on the profitability (just think of banks having to fulfill capital requirements)
  • dramatically changing business fundamentals (just think again of banks in an ultry low interest environment or just look at oil companies in a “lower oil price for longer environment”)
  • etc.

Most of the time, a high yield comes at a price for the investor (higher volatility of earnings, less predictable dividends, higher debt level etc.) and the stock has to be watched carefully.

You can see high yield stocks in sectors like oil and mining, telecommunication, insurances and banking. They are often operating in cyclical and capital intense businesses.

Some people say that a “particularily high yield” is an indication

  • for massive problems,
  • for low quality of the ompany and
  • that a dividend cut is just around the corner.

Well, I don’t think that these three worries are met cumulatively with high yield stocks most of the time and would suggest a more differentiated view on these businesses.

Firstly: There might be massive headwinds, but a strong company is able to adapt and to overcome problems.

Secondly: With regard to the quality of such a business, just think of Chevron, or Altria for instance. I’ve seen their dividend yields well above 4 % several times over the last decade. There are people that hesitated to buy Chevron when its stock price fell below USD 80 in early 2015 just to buy when the price shot up above USD 110. The same people first critized the negative FCF of the company and its massive debt load just to change their position a few months later in order to praise “the high quality of the company and brighter outlook“. Most of them were reluctant to buy because the stock price fell (and dividend yield shot up) and were eager to acquire some shares when the price recovered. Don’t get me wrong: the criticism is fair, Chevron is still funding a big portion of its dividends through debts, even after oil prices have recovered a bit. My point is: the stock price resp. the dividend yield alone is certainly no indicatation with regard to the quality of the company.

Thirdly: Some investors just can’t forgive dividend cuts and dump their stocks as soon as there are signs that payouts might be slashed in the near future. Fair enough. But just bear in mind, that a dividend reduction is by far not the end of the company. Just think of General Electrics, Bank of America, Rio Tinto, BHP Billiton. I am quite optimistic that these companies will still thrive twenty years from now.

Conclusion

Since 2009, Deutsche Telekom, Nestlé and Royal Dutch Shell have returned almost 100 % of the initially invested amounts. Nestlé’s yield on cost has been climbing smoothly to 3.8 % (after witholding taxes, reimbursement not included) whereas Royal Dutch Shell’s has been steady at around 7 % over the years. My yield on cost regarding Deutsche Telekom has been falling from 2009 to 2015 but has recovered quite a bit and currently sits above 4 %.

Investing in high yield stocks can be rewarding but it can be very tricky. It’s important to make sure that there is a sufficient margin of safety and not to rely too heavily on these companies.

I like to have a good mix between lower- and high yield stocks and always try to put rock-solid stocks at the core of my portfolio. These businesses offer me a much lower dividend yield in the near term but provide stability to my portfolio and reliable organic growth for the future. That’s one reason why I just love my positions in consumer staples (e.g. Nestlé, Unilever and Heineken) and pharma companies (Roche, Bayer, Novartis etc.). It’s great to see them grow. Slowly but steadily.

I am not in a hurry at all. I am enjoying my path as a dividend growth investor.

 

Do you have high yield stocks in your portfolio? Or do you avoid them?

 

Disclaimer

You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

USD 4’300 projected dividend income 2017

That’s exactly how I like it!

My dividend stock growth machine is gaining steam. 

Slowly and steadily. 

Compared to 2016, my projected dividend income will be 10.5 % higher, climbing from USD 3’800 to USD 4’200 largely due to dividend hikes and by adding two positions. 

I am pretty sure that by the end of 2017, my dividend income will be well above USD 4’500.

Strong and reliable dividend growth

My goal is simple:

increasing dividend income by at least 15% year over year through organic growth (dividend hikes), reinvestments and by adding new positions (see my Passive income review 2016 and outlook and my Stock Investments in 2016).

In my blogpost Dividend increases regarding my stock holdings I made a first overview regarding organic dividend growth of my stock investments. The list above shows you an update. As you can see, 26 of my stock holdings announced their 2017 dividends so far, 6 companies will report their 2016 results in a few weeks resp. have not yet published information on dividend increases for 2017.

Most of my holdings show nice dividend hikes. “High yielder” in my portfolio such as Royal Dutch Shell, HSBC and GlaxoSmithKline offer dividend reinvestment plans. My stock count will develop quite nicely over time. 

Slow dividend growth is nothing to lament about! Nestlé’s dividend hike for example was relatively small. But here’s the thing: my yield on cost less witholding taxes is 3,8 %. Taking into account the reimbursement on the basis of a double taxation treaty lowering the Swiss witholding from 35 % to 15 %, my yield will be substantially higher, being at around 4.5 %. Over the last 8 years, Nestlé has steadily increased its dividend payments and returned to me well over 30 % of my initial investment.

I love reliable and stable businesses.  Nestlé made generations of investors a fortune just by taking a long term view, sticking to their holding and by letting the company doing its work.

More dividend income increases expected

So far, I’ve added two new positions in 2017:

  • beer producer Heineken (see A refreshing investment) and
  • tobacco company Imperial Brands (Davidoff, Cohiba, Montecristo etc.).

My investment portfolio is getting more defensive and these two position will add USD 160 to my dividend income in 2017. I expect future growth to be at a high single digit rate.

And there is more growth to come during the year. As said, 6 companies of my investment portfolio have not yet announced their dividend increases. Among them oil supermajors ExxonMobil and Chevron. I am pretty sure that there will be dividend hikes albeit significantly lower than in the past years. Oil prices recovered quite a bit since the terrible drop in 2015 and of course these companies are streamlining at an amazing pace and ramping up huge projects which should show improved operative cash flow quite significantly.

Given the strong boost of our savings rate, now being well above 60 %, I expect my investments into new positions to be a bit higher than in the previous year (2016: USD 16’000).

I don’t mind market fluctuations and have been investing on a regular basis for almost a decade now. But with stock indices at record highs and mushroomed share price valuations, I am gettting a bit more cautious. In my view it’s sensible to be extremely selective and to keep additional cash just to take profit when there is a market retreat which makes it easier to identify suitable investment oportunities. Either way, my portfolio will be doing just fine over the long term. 

My journey as a dividend growth investor is becoming more and more fun.

 

Have you added new positions to your portfolio lately? Have there been some dividend hikes?

 

Disclaimer

You are responsible for your own investment and financial decisions. This article is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.