June 2020 Dividend Investing Review

Welcome back to my monthly dividend Investing review where I will analyze my dividend Income and Investments for June 2020. I enjoy writing these post and I use them as a journal to help keep me motivated. Life as a dividend investor is not meant to be exciting. In fact, for me the less exciting the better. Iv tried to seek thrills and frills before but now I just prefer to let my money do the work for me.

When I buy a share of a company, I buy them with the future in mind. I am not buying to sell in 6 months or even a year, I am buying to hopefully never sell. I envisage each company I invest in, to be around and still paying me dividends in 10 to 20 years’ time.

Of course, I don’t have a crystal ball and I have made some terrible Acquisitions, (a bit like Altira’s acquisition of JUUL) but I make my best effort to understand a company and analyze how I believe a company will perform in the future.

DYOR

Notice, I mentioned ” My best Effort”. Recently on money twitter, I have become a little bit concerned about the number of accounts promoting/buying one single company that mainly stemmed from one of the larger accounts. I have nothing against someone selling courses and throwing out stock recommendations and they are a large account for a reason but I would encourage my connections and readers to not follow someone blindly and to do some research.

There are plenty of people who provide valuable resources for free such as

1. Dividend Growth Investor
2. The Sunday Investor
3. European DGI

Dividend Growth Investor was my main inspiration for starting and as mentioned before I follow his monthly newsletter. There are literally thousands of articles on his website ranging from company analysis to definitions. If you have a question about dividend growth Investing, the answer will be on this blog somewhere.

The Sunday Investor would not identify as a dividend growth investor but while DGI got me started on this journey, the Sunday Investor has opened up my curiosity and invited me to question everything I thought I knew about investing. His articles are always well written and thought-provoking and have helped me improve as an investor over the last 6 months.

European DGI is the creator of the noble 30, which is a list of dividend aristocrats in Europe. As a European, I know how hard it is to find good information about European companies, especially companies that pay dividends consistently. We are not really as spoiled for choice as our US friends and I know how much of a time commitment it was to first get all the data and analyze all that data. This is also a good time to point out that I have recently started a podcast with EDGI called Dividend talk where we talk about investing from a European point of view.

I could and probably should list some more. These guys are far more knowledgeable than me and started their investment journey earlier than I did but they all have one thing in common. They all want to help each investor without looking to sell you something. Not only have they got a ton of information on their sites, but if you reach out they are more than happy to help guide you in the right direction. I know this from experience 🙂

But that does not mean I should follow them blindly, It is important for me to make my own decisions and understand why I have put my hard-earned money into a company.

On to my monthly investing review!

Dividend Income

June has been a very good month for me and I am finally starting to constantly reach 3 figures every month in dividend income.

As you can see above 15 companies paid me dividends last month for a total of $109.37 before WHT. This an increase of 58% YoY growth compared to the same period last year. where I was paid $68.88.

Dividend Raises

There were 10 dividend increases compared to June 2019

The most disappointing increase was from IBM with a 0.61% however this increase has introduced them into the exclusive list of dividend aristocrats.

Giving their huge debt load and their recent acquisition of Red Hat I am not expecting any significant dividend increases any time soon.

Dividend Chart

The Chart below shows the Dividends I received in 2019 in Blue.

The Red is what I have received so far this year and the green is the projected dividend income. The projected income is assuming that there are no dividend cuts and I add no more cash to my investments.

In Reality, I will be continuing to add €1250 which will bring in roughly €37 in forward income each month.

June Dividend Investing

In June I added $81.8 in forward income to the freedom fund which brings my expected total dividend income for 2020 to $1250

AbbVie Inc

ABBV is a dividend challenger and has a seven year dividend history and a current dividend yield of 4.8%.

Over the last 7 years they have an average dividend growth rate of 15.72%.

Earning have grown 36.8% over the last 5 years and they have a FCF payout ratio of 48.27%

Last month I added 6 shares of ABBV which adds a total of $28.32 in forward income

Realty Income Corp

Realty Income don’t need much introduction. For many investors they are the gold standard for REITs and have an incredible dividend growth rate.

Look out for a future article where I analyse $O in more details

Automatic Data Processing

I added 7 shares of ADP at the end of June. This added over $25 to the freedom fund. You can find my review of ADP here.

FTSE Developed Europe UCITS ETF (EUR)

Those that have read my blog before mat be a little bit surprised to see that I have invested in an ETF. We also recorded a podcast on some of the challenges we have in Europe accessing some of the more popular funds which is worth listening to.

VWCG has a median market cap of about €35 billion and currently holds 615 companies. The top 10 companies make up 19.6% of the overall holdings. It has an estimated dividend yield of 3.6% but as this is an accumulating ETF this will be reinvested into automatically.

What I like about this Fund

This fund has a low expense ratio of 0.2% but I also like the sectors weighted exposure. It gives a nice spread across each of the sectors.

Also if you take a look at the top 10 holdings you might see a lot of these names appear on the Nobel 30 list.

Why I chose an ETF

Paying 41% tax in 8 years time will be a hard pill to swallow for sure but investing in this etf is about diversification. The S&P 500 has had an incredible decade of growth, but that does not mean the next 10 years will be as impressive. It is important to diversify your investments, by asset class, by sector and also by geography.

The ETF is a easy way for me to get exposure to the broader market for a low cost. In the future I do hope to invest in individual European companies but I am finding it hard to find companies that I believe are fairly valued at the moment. (from the few i analysed)

I am hoping to spread my portfolio to 60% US equities and 40% European. At the moment i am currently 90% in US equities.

MY Portfolio

Thanks for reading and happy investing!

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