August 2021 portfolio update

Although it signals the end of the summer, August is always one of my favourite months. This year more than any other year we decided to try and make the most of it with the kids before they go back to school. With Covid restrictions easing ever so slightly here in Ireland we can now do more activities even when the weather outside is not so pleasant. 

While the focus has been on family time, the downside is that I paid very little attention to what is happening in my portfolio. 

Actually, that is a good sign and is one of the reasons I love being a dividend growth investor. I don’t have to check my account each day/week or month. I am not concerned about the daily fluctuation of the market. 

Rather I’m confident that I have invested in companies with growing revenue/cash flow and earnings to at least sustain their dividends.

It helps me sleep easy at night!

Portfolio Overview

By constantly adding cash to my account every month I am slowly edging towards my goal of being able to live off my dividend income. My PADI is 7.80% towards my goal after tax which was helped by the recent 4.7%divided hike from Altria.

Speaking of $MO, my Yield on Cost is currently 7.2% and they currently make up 7.07% of my dividend income. This is more than my long term goal where a company will contribute no more than 5% of my dividend income. However I am still in the early stages of my accumulation phase and every €1000 makes a big difference.

My Portfolio – USA Companies

There has been one addition to my US portfolio which happens to be a European company. This month I bought 50 shares of Orange which is a french telecommunication company. Usually I would buy companies like this on the local exchange however this is a company that I write about for Sure Dividend.  

As they have a largely American based audience, it makes sense to write about the ADR and it is easier for me to follow when I am writing my analysis. 

While I can’t share my full analysis, what I can say is that this is not a long term hold for me and I expect my thesis to play out over the next 5 years and even if it doesn’t, I get decent yield while I wait.

Moon Shot

This month I have done something that I have not really done before and bought shares in a non dividend paying chinese company called Alibaba. 

I think I finally gave in to FOMO and bought 20 shares on this extremely large dip. We all know there are risks surrounding Chinese stocks. These fears have seen the share price cut in half. Right now I believe the risk to reward is worth the gamble

The company looks to be oversold on nearly all timeframes and is hovering around a key support area.  If it fails to bounce next week, it could actually drop to $110 before rebounding. I would even consider increasing my share count to 40 if the price drops to this level.

My target price to sell is $245 but this will depend on what happens around the $210 resistance range.

Is it time to be greedy when everyone is fearful? Who knows? All I know is that I am well aware of the risks here and I am willing to hold this company for the short term and see what happens. 

My Portfolio – European Companies

Last month I added more shares of Ahold to my portfolio. Those who follow Dividend talk will know that we are huge fans of Ahold and Bol.com.

This company has been covered in depth by a few members of the community so I would encourage you to read/watch these excellent pieces.

1. https://europeandgi.com/stock-analysis/why-i-like-to-own-ahold-delhaize-stock-so-much/
2. https://dekleinekapitalist.nl/koninklijke-ahold-delhaize-gekocht/ (use google Translate)

Dividends

In August I received a total of €104.68 after tax in dividends from 6 different companies. 

1. Verizon €5.29
2. British American Tobacco €21.59
3. Abbvie €22.07
4. Realty Income €10.18
5. AT&T €43.81
6. Texas Instruments €174

This brings my total amount of dividends received this year to €1400 exactly with still 4 months of the year left to go. 

Usually I track my portfolio in a gsheet that I copied from the measure of a plan and amended to suit my own needs. The spreadsheet is fantastic and the author clearly did alot of work to produce such a high quality tracker. However, for those looking for something a little more simplistic, than check out https://app.divitrack.io/ 

This is one of my favourite trackers to date. The dashboard is nice and clean and has some nice features such as Future projections and upcoming dividends.

Recommended Read

How To Start Investing in Dividends Stocks

Option Trading

I mentioned last month about options trading and it generated quite some feedback from the community.  I always value feedback as it is how you learn and grow as an investor

Closed trades for August

• 3 x SOLO,   $5 CALL expiring  21 JAN 22 for €356 -> Exit Price 0.3, Profit $265.69
• 1 x WSH, $13 PUT expiring 18 AUG 21 for $351 ->  Assigned, Premium collected $160.67
•  2  x NCLH, $25 PUT expiring 20 AUG 21 for $145-> Exit Price 0.35, Profit $73.7
•  1 x  CCL, $25.5 PUT expiring 27 AUG 21 for $160 ->  Exit Price 1.24, Profit $32.5
•  1 x  UAL,  $50 PUT expiring 20 AUG 21 for $205 -> Assigned, Premium collected $204.52
• One x INTC, $51 PUT expiring 09 SEPT 21 for $115 -> Exit Price 0.5, Profit $63.2
• 1 x CCL, $22 PUT expiring 27 AUG 21 for $76 -> Exit Price 0.35, Profit $39.25
• 1 x AD, $23 PUT expiring 20 AUG 21 for €27 -> expired worthless, Profit €25
• Onex REE, 17 PUT expiring 20 AUG 21 for €25 -> expired worthless, Profit €23
• 1 x NIO 37 PUT expiring  09 SEPT 21 for $109 -> Exit Price 0.54, Profit 53.95

In total I collected $893.43 in premium from my IBRK and €48 from Degiro. However I was assigned to two companies. The first one was WSH, which I could have actually got out before earnings with a profit. However I held the company and it backfired massively with the company taking a nose dive to under $7.  My breakeven price is $11.40 which is miles away.

At the moment I am undecided what to do with this. I could sell now for a loss of $440 and still have a decent month or I could hold on and see if it will come closer to the revised analyst target of $9.83

I was also assigned $UAL but I am much happier to hold this company and sell covered calls. TIf I sold now, I would pretty much break even but with an analyst target of $6 and lockdowns almost ending, I am happy to hold and use covered calls to extract more premium. 

Below are my Open Trades for September 

Covered Calls 

• 1 x BME: REE,  €16 CALL  expiring 17 SEPT 21  for  €35 
•  1 x T, $30 CALL expiring 17 June 22 for $164
•  One x MO, $50 CALL expiring 17 SEPT 21 for $50 
•  1 x AD, €28 CALL expiring 10 OCT 21 for €35
• 1  x UAL, $50 CALL expiring 1 OCT 21 for $97

Cash Secured Puts 

•  4 x SOLO, $3 PUT expiring 21 JAN 22 for $277 
•  1 x RIDE, $7.5 PUT expiring 21 JAN 22 for $200
•  1 x AD, €25 PUT expiring 17 SEPT 21 for €27
• 4 X ENDP, $2.5 PUT expiring 3 SEPT 21 for $80
• 1 x CCL, $23 PUT expiring 17 SEPT 21 for $80
• 1 x INTC, $52.50 PUT expiring 17 SEPT for $52 

As always, these trades are not recommendations and I am still very much a novice at this so don’t follow my lead on any of these trades. 

Summary

Overall, it has been a really positive month in terms of Income that is outside my 9 to 5 job. Dividend payments now have a floor of around €100 after tax but I am expecting September to close to double this amount as I have quite a few companies to distribute dividends.  My options trading is coming along nicely but I still have a lot to learn including to not hold a company through earnings.

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