It has been a while since I did a monthly review over on my old blog. Actually, looking back at last year, I feel I was a bit distracted with options trading, dividend captures, and even trying to read charts. Sometimes you have to scratch an itch, but honestly, when I look at my portfolio and see companies like $SOLO and $WISH, I realize that greed and chasing “easy” money is some time that I need to control.
Luckily I was still Investing the same amount each month automatically into Dividend Growth Portfolio. The only issue was that I was starting to focus on Options more than my Dividend Growth Portfolio. Writing Monthly reviews help keep me accountable to myself. Am I sticking to the plan, or am I drifting
Having a diversified portfolio is essential, and I will always be open to other investments, but not at the expense of my core strategy. If I think about my strategy, it is called dividend GROWTH Investing. Growth is important here if I want to reach my FI goals in 10 Years. I will write a separate post explaining my strategy and what growth means to me, but I think it is something I will give more attention to this year.
Purchases this Month
January has been a busy year in terms of purchases, where I invested in 10 companies in total. God Bless low Fees. 5 of these new positions are for me. In total, I added over €580 (before tax) in forward annual dividend income and increased my PADI to 11.27%.
NN Group N.V (NN.AS)
NN Group N.V. is a multinational financial services company headquartered in the Netherlands. The company provides a range of insurance and pension products and services, including life insurance, general insurance, and pensions. NN Group was formed in 2014 as a spin-off from ING Group and is now an independent company listed on the Euronext Amsterdam stock exchange. NN Group has a strong presence in Europe, with operations in the Netherlands, Belgium, Luxembourg, and Central and Eastern Europe, as well as in Japan. The company is known for its innovative and customer-centric approach to financial services, with a focus on delivering high-quality products and services to meet the evolving needs of its clients. With a strong track record of stability and growth, NN Group is a well-established player in the financial services industry and is poised for continued success in the future.
Why Did I Invest in them?
NN Group has a strong history (albeit short) of delivering consistent and reliable dividend income to its shareholders. The company has a well-established dividend policy, which aims to provide a stable and growing dividend stream to its investors. Over the past few years, NN Group has shown a strong rate of dividend growth, with year-over-year increases in its dividend payouts. Its five-year Annualised dividend growth rate is 10.56% which is not bad for a company with a ~6% starting yield.
This consistent growth in the dividend payouts reflects the company’s strong financial performance and commitment to delivering value to its shareholders. With a solid financial foundation, a strong market position, and a commitment to delivering value to its shareholders, NN Group is well-positioned to continue its dividend growth trajectory in the years to come.
Sonoco Products Company (SON)
Sonoco is a global provider of diversified consumer packaging, industrial products, and packaging supply chain services. Founded in 1899, the company has a long history of delivering innovative packaging solutions to its customers. Today, Sonoco operates in over 100 countries and has over 20,000 employees worldwide. The company’s product portfolio includes a wide range of packaging solutions for consumer goods, including rigid packaging, flexible packaging, and paper and pulp-based packaging. Sonoco also offers packaging supply chain services, such as design, prototyping, testing, and logistics support, to help customers optimize their packaging operations and reduce costs. With a strong focus on sustainability, Sonoco is committed to reducing its environmental impact and creating packaging solutions that are sustainable, recyclable, and biodegradable. The company’s financial stability and strong dividend history make it an attractive investment opportunity for income-seeking investors.
Why Did I Invest in them?
Originally I was looking at Smurfit Kappa, which is an Irish packaging company, but Sonoco has a long and established history of paying dividends to its shareholders. The company states that it has consistently paid dividends for over 100 years and has increased them over the last 40 years. It’s the kind of record that reflects its strong financial performance and commitment to delivering value to its investors. With a 3% dividend yield and ~5% dividend growth, I plan on adding more if the company drops under $55
VICI Properties (VICI)
Vici Properties is a leading real estate investment trust (REIT) focused on the gaming, hospitality, and entertainment industries. The company was formed in 2017 as a spin-off from Caesars Entertainment and is now an independent company listed on the New York Stock Exchange. Vici Properties owns a diversified portfolio of properties, including gaming facilities, hotels, and other entertainment venues. The company’s portfolio includes some of the most iconic and well-known gaming properties in the United States, such as the Harrah’s and Caesars brands. Vici Properties is committed to delivering value to its shareholders through a combination of rental income and capital appreciation.
Why Did I Invest in them?
The only REIT I had in my portfolio was Realty Income, and I was looking for some extra diversification. I was impressed with the company’s portfolio, particularly it’s las vegas properties What happens in Vegas stays in Vegas!. REITS are not really in my circle of competence, but owning more REITS, gives me an opportunity to read and research REITS more. Also, a 4% yield and an 8% growth rate is a decent return while I am sharpening my tools.
Ares Capital Corporation (ARCC)
Ares Capital Corporation is a leading provider of financing solutions to middle-market companies in the United States. The company is a publicly traded business development company (BDC) and is listed on the NASDAQ stock exchange. Ares Capital provides a range of debt and equity financing solutions, including senior secured loans, mezzanine debt, and equity co-investments. The company is focused on investing in companies across a variety of industries, including technology, healthcare, and business services.
Why Did I Invest in them?
ARCC has constantly distributed dividends since 2005. While the dividends are not continually growing, I don’t need too much growth with a 9% yield to make a decent return. I mentioned before that I had a portion of my portfolio in CEFS, but IBRK has closed that loophole to International investors as these funds do not distribute a KIID. I closed all of my CEF positions and put them into two BDCs instead.
Capital Southwest Corporation (CSWC)
Capital Southwest Corporation is a publicly traded investment company based in Dallas, Texas. The company was founded in 1961 and is focused on providing growth capital to middle-market companies in a variety of industries, including technology, healthcare, and industrial services. Capital Southwest invests primarily in the form of debt and equity securities, and its investment portfolio is diversified across several different companies and industries. The company is committed to delivering value to its shareholders through a combination of capital appreciation and dividend income.
Why Did I Invest in them?
It’s a similar story to ARCC. Although they are not as consistent with their dividends, Dividend Radar has the company growing their dividend for the last eight years. It is a relatively small position, and with a 10% starting yield, I don’t need much growth to make a decent return.
Companies already In my portfolio
On top of the five new companies, I also added to five positions that I already had in my portfolio.
- Blackstone (BX)- > I am Slowly building my position in Blackstone, and they now account for 3% of my portfolio
- Siemens (ETR: SIE) -> A company I don’t own enough of, I think the valuation is quite high at the minute, but I am buying one or two shares a month to build my position.
- British American Tobacco (BTI) – I just realized that tobacco stocks make up nearly 9% of my portfolio. BTI is worth 2.1%, and Altria is worth 6.6%. I am thinking of trimming my position in Altria at the moment as I am unsure of where growth will come from other than price hikes. BTI seems to be a little bit more of a rounded company, and they have had a lot more success with non-combustibles.
- Viatris (VTRS) – Pretty much a full position for me with VTRS at 4% of my portfolio.
- T row Price (TROW) -> Now up to 3% of my portfolio. TROW was my last purchase of the month, but it was European DGIs First. Check out his excellent article here
Dividend Received this month.
In January, I received €130.78 in dividends from a total of 8 companies and CEFs. Altria ($MO), Calamos Convertible & Hi Income Fund ($CHY), HP Inc ($HPQ), WP Carey ($WPC) Clough Global Opportunities Fund ($GLO) ,
Eaton Vance Enhanced Equity Income Fund II ($EOS), Flaherty & Crumrine Pref and Income Fd Inc (EOS), and Comcast ($CMCSA)
As you can see, My dividend Income started at €23.48 in Jan 2019 and has grown to €130.78 in 2023. Year on Year, my dividend income in January grew 51.65%, but only ~6% of this is due to actual dividend growth. My portfolio has gone through a lot of changes since I started in 2019, where I have sold companies like Red Electrica, Omnicom Group, and Disney.
Looking back, it looks like I have done too much selling over the last five years, Particularly for a buy and hold investor. However, I think it takes a couple of years to begin to understand what you want as an investor, as there is a lot to learn in the beginning. I would like to hope selling companies is an activity I will do less and less as I mature as an investor.
One thing that keeps me focused is reflecting on the dividends I have received over the last five years, and I love the staircase effect of my total dividends received over the last five years.
Last year I earned just over €3200, and my current PADI is €3600, which is 11.26% of my goal to make €32000 after-tax a year in dividends. I actually increased my target goal from €23000 due to inflation and lifestyle creep. In 2023, I am aiming to try and reach an average dividend of €400 per month by the end of the year, which is a pretty lofty goal, but we will see what happens.
Nice post – keep them coming!