Happy Easter from the Dividend Talk Podcast! Episode 290 is our Q1 2026 portfolio review, and despite tariff noise, market volatility, and the occasional rant about copy-paste annual reports, both Derek and EDGI had a quietly impressive quarter.
Market News
Evolution AB & the Equity Swap Trick Billionaire Kenneth Dart has increased his stake in Evolution AB past 30% – but not through direct ownership. He’s using equity swaps, a mechanism where a bank holds the shares while the investor receives all the economic upside (and downside), without triggering the mandatory takeover rules that normally apply above 30% ownership in Sweden. EDGI explains this clearly and also calls out Evolution’s annual report for containing copy-paste errors from the prior year – a red flag that management aren’t taking capital allocation communication seriously.
Nike: Dividend Under Pressure Nike’s Q3 earnings showed EPS of 35 cents against a dividend of 41 cents – the dividend is underwater. New CEO Elliot Hill is doing the right things (reversing the direct-to-consumer pivot, reducing China exposure), but the path is painful. Derek and EDGI flag the risk that activist investors – who don’t care about the dividend – could pressure management to cut it and redirect capital to buybacks. The balance sheet is strong enough to weather this, but conviction is low.
Dividend Announcements TJX Companies hiked its dividend by 13% this week – the only announcement in a quiet week for hikes.
Q1 Portfolio Reviews
Derek’s Q1 2026
- Portfolio value: ~€130K (fluctuating between €129K–€131K)
- Projected annual dividend income: €25,200
- Average income per working day: €9.87
- Portfolio yield: 4.78% | Yield on cost: 6.20%
- Payout risk (companies above 65% payout ratio): 13.6%
- Holding 47 companies
Buys this quarter: Brookfield Infrastructure (BIPC), BAM, Texas Instruments, HP Inc. (via put assignment at ~$19), Iberdrola Sales: Tiro Price, Enegas, Hornbach (sold Hornbach due to German withholding tax inefficiency – 9% unrecoverable leak) Gross dividends received: €907 | After withholding tax: ~€200/month net Currency split: 34% EUR, 33% USD, remainder GBP
Derek is actively restructuring toward tax efficiency, consolidating into US and UK holdings on Degiro, and keeping European/French stocks on Interactive Brokers. He’s also keeping an eye on potential Irish CGT reform modelled on the Swedish flat-rate system.
EDGI’s Q1 2026
- Dividend income growth: +18.7% vs Q1 2025
- Portfolio yield: 3.65%
- Portfolio value growth vs Dec 31st: +7.3% (was +10% before tariff volatility)
- Expense coverage ratio: 86% (close to the 100% target)
- Largest holding: Shell | Largest sector: Consumer Staples (after General Mills acquisition)
Buys: Euronext, Walters Kluwer, ADP (these two made up ~70% of new capital), General Mills (closing the position), Shell dividend reinvested. No sales this quarter.
EDGI’s portfolio doubled in size in three and a half years. Since 2014, he’s had only three down quarters – COVID, a brief dip in 2017/18, and one quarter last year. The defensive, dividend-focused approach quietly outperformed when tech rotated lower in the first two months of the year.
Listener Q&A
GM – Do you trade value stocks (e.g. buy beaten-down names to sell later)? Not really their approach. EDGI uses a small “value pocket” in the portfolio (e.g. bought Meta at $150, sold at $500), but the core strategy is buy-and-hold until a company disappoints. The “dividends don’t lie” framework (buy when yield is historically high, sell when it’s historically low) is something EDGI finds interesting, but warns about value traps.
Rocketbump – Thoughts on Carrefour? Derek ran the numbers: revenue flat for three years, EPS down over 3/5/10 years, 6% dividend yield, 70% payout ratio, debt-to-EBITDA at 3x. EDGI notes that high leverage is normal for grocery chains given predictable revenues, and flags a price-to-earnings of ~11 and price-to-free-cash-flow of 4.6 as potentially interesting – but more digging is needed. Both hosts are cautious but open to hearing from listeners with on-the-ground knowledge of Carrefour stores.
Streetpeacher – DRIP on Interactive Brokers always buys at the recent high. Worth going manual? Not worth the effort for small positions. Transaction costs and time spent manually buying usually cancel out any pricing advantage unless the delta is significant (10%+).
MB657 – Easter Bunny stock pick at a discount? EDGI: Schneider Electric. Derek: Texas Instruments.
Waste Management? EDGI: Great business, but 35x earnings is too rich for a trash collector. Allergic to that multiple.
Bella Dividends – Iberdrola’s engagement dividend for AGM attendees. Will you go? EDGI: The flight cost to Spain far exceeds what the dividend would pay. Unless they’re offering tapas, he’s not making the trip.
Ryan – Are covered call ETFs more interesting near FIRE for diversification? The opposite, says EDGI. As you get closer to financial independence, you want safer, lower-yielding, higher-quality income – not to chase yield with higher-risk instruments. Covered call ETFs are “wolves in sheep’s clothing” – the income is option premium, not organic dividend growth. Derek adds that share price erosion in these products often undermines the income advantage over time.
Hugo – Unilever selling food business to McCormick. Special dividend incoming? EDGI wants optionality: ideally a reinvestment option (like Chesnara offered) so shareholders can choose to redeploy proceeds back into Unilever and maintain their position size and dividend income. He does not want a buyback. Unilever has decades of uncut dividends – any capital action should protect that income.
Todd – How do Europeans view Canadian stocks vs. US stocks? EDGI: Canada isn’t currently in his circle of competence, but the current US political environment is nudging him to start learning. If Canadian companies pay good dividends and are well understood, he’s open. Derek is already in Brookfield (Infrastructure and Asset Management) and sees Canada as a logical complement to European and US holdings. He invites Todd to share a top 10 Canadian company list on Discord.
Jonas – Thoughts on UK investment trusts? Derek holds several: JP Morgan Growth & Income, Aberdeen Equity Income, UK Wind (UKW), and others. He likes them for tax efficiency (relevant for Irish investors), access to assets he wouldn’t buy directly (Nvidia, Google, Microsoft via JPM), and decent yields. Recommends the Money Matters podcast for deep dives on individual trusts.
Final question – Interesting dividend stocks in Australia or New Zealand? Both hosts: too far outside their circle of competence. BHP (Australian-listed) is in EDGI’s portfolio. ETFs would be the preferred route if going there at all.
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