Today I bought two dividend stocks

The first one is Wells Fargo & Co. I have that company on my watchlist for more than one year and during that time, the performance was just great. As my holdings in the financial sector was pretty low, I grabbed 54 shares @ € 37,60. I’m generally not too keen on banks but I think that WFC is one of just few companies in that sector I’m confident they’ll still exist in 30 years or so. A nice side effect: WFC distributes a dividend for almost 20 years (even during the crisis in 2008/2009) and was also able to increase the dividends. Currently, the annual dividend of $1,40 is covered by an EPS of $4,02 — the payout ratio is on a comfortable 35 % level.

The second one is McDonald’s. MCD is a dividend aristocrat, paying dividends for almost 40 consecutive years. I extremely like that simple business, combined with a strong brand and the ability to recognize and react on trends and each generation’s lifestyle (compare a menu of the 1980s with one of the 2010s). Although in a more healthy society and even if it’s en vogue to live vegan and “healthy” – I believe that McDonald’s and that idea of eating will also exist in 30 or even 50 years. For sure in another way, but still in a profitable way. I bought 30 shares of MCD @ € 73,00.

With that two stocks in my portfolio, my dividends for 2014 increase by approx. 45 Euros as I qualified for the next two payments in September and December.

Recent Buy: AbbVie

Well, I have a kind of buying spree recent weeks as I bought 50 (at € 40,93) shares of biopharmaceutical company AbbVie Inc.

AbbVie is a separated company of Abbott Laborities, which was founded in 1888. The idea behind this split was to separate two divisions in biopharmaceutical research (AbbVie) and in medical products (Abbot Laboratories). As AbbVie is listed just for 1,5 years, there are no informative historical data available. But the original company Abbott Laborities has a strong track record and is paying dividends for more than 30 years! And as my Healthcare share in my portfolio is pretty low at the moment, I think that is a nice long term investment for sure.

Income and Expenses June 2014

My income and expenses in June were as follows:

Rent (incl. groceries): -€ 800,00
Gym membership: -€ 109,00
Garage: € 0,00
Health-insurance: -€ 74,89
LC insurance: -€ 16,00
Food @ work: -€ 7,00
Restaurants: -€ 197,00
Entertainment: -€ 50,00
Food: -€ 24,00
Holidays: -€ 114,00
Church rates: € -167,00
Presents: -€ 10,00

Total expenses: -€ 1.568,89

Total Income: € 4.868,20

Saved Money: € 3.160,00

Saving-rate: 65 %

I think I have to recap this month again in detail and go through the figures for a third time because my expenses were THAT low in June, I cannot believe it. You can see a huge decrease in my expenses for food at my office as I had one week off and I had some business lunches and had nothing to pay. I also had to pay my annually church rates – hopefully for the last time in my life as I intend to step out of that society – equivalent to € 170 which are not neglectable. If I really could live below 1.600 Euros, it would be just great; let’s see how July progresses as I also have a couple of days off and no expenses like my holidays and church expenses in June.

I saved € 3.160 which results in a saving-rate of 65 % – I’m very pleased with that result and looking forward to July.

Recent Buy: Kinder Morgan Inc.

Today I bought 100 shares of US-based pipeline and oil-storage company Kinder Morgan Inc. (KMI). KMI has been very popular amongst fellow dividend investment bloggers recent weeks, as this nice chart made by Captain Dividend shows. In Europe, neither Rich Kinder nor Kinder Morgan are very well known. I honestly heard the first time about Kinder Morgan when I was reading one of the blogs you can see in my blogroll (probably it was DividendMantra’s blog…). So what is Kinder Morgan Inc.? KMI is a so-called midstream infrastructure company, that means they own and operate a network of pipelines, oil wells and terminals (and some tankers as well). One third of the transported natural gas in the US moves through Kinder Morgan’s 60.000 km pipeline network.

The whole Kinder Morgan group consists of four companies: Kinder Morgan Inc. (KMI), Kinder Morgan Management LLC (KMR), Kinder Morgan Energy Partners LP (KMP) and El Paso Pipeline Partners LP (EPB) which was bought in 2011 for not less than $21 billion. I bought shares of KMI which is the general partner of two MLPs KMP and EPB, which earn the money actually. Kinder Morgan’s network of companies is not easy to see through, but KMI is a kind of “mother company” for all other Kinder Morgan-companies (see this overview).

My thoughts are, that operating pipelines is a safe thing as long as regulatory authorities and market circumstances play along. The US have a huge advantage compared to Europe as they are in the position to export oil and natural gas (in form of LNG) in near future. I hope Kinder Morgan will profit enormously as a result of the current energy boom in the United States. Currently, KMI pays a $0,42 quarterly dividend which is approximately € 90 per year (after tax) – that’s the highest figure so far in my portfolio.

Dividend Income June 2014

First six months of the year are gone, days getting shorter as we already had midsummer, but the months I like most are still ahead. I like July and August as I traditionally have some weeks off these two months — this year not less than 19 working days. Time to recharge my batteries, time to sleep a little bit longer and go to bed later, time to read and think about what stock to buy next!

But before I do all that funny things, I’ll do something, I also really appreciate and is kind of fun: counting my incoming monthly dividends. And the last month was just great. Even if it wasn’t as high as in May and of course it’s not comparable with so many other monthly dividend payments like DividendMantra’s, DividenHawk’s or Dividenden-sammler.de’s — in June I received € 72, which means from now on, I’ll receive not less than that amount of money every three months. For the rest of my life (assuming these companies continue paying dividends; if not I’m going to reallocate my portfolio anyway). That’s my health insurance cost quite accurate. And as I still want to save money and invest it, that 72 Euros are going to increase definitely! The cool thing is, that amount is already “noticeable” for me. Receiving € 9 or € 12 per month is nice, but not a figure that gives you the feeling of making a big difference to your financials. I don’t feel richer because of that 72 Euros, but I can imagine a little bit better now, that I’ll receive the equivalent of a pair of new adidas shoes at the end of each quarter.

The detailed overview for June’s dividends:

Total SA – € 18,21
IBM – € 9,04
Unilever – € 17,03
Chevron – € 14,68
Coach Inc. – € 13,74
Total: € 72,21

In June 2013, I received € 17,61 in dividends (that’s an increase of more than 400 %), showing very well that continuing investing does make sense! :-)

One additional Buy in June: DuPont

As I noticed that DuPonts (Ticker: DD) Q2 earnings fell and the stock price did also decrease by more than -3 %, I took the opportunity and bought 50 shares of that company. DuPont is on my watchlist for months, but for whatever reasons I didn’t buy it back then. Now, the price quotes around $65 (or € 50) and I made the decision to be one shareholder of that company.

DuPont’s a chemical company, founded in 1802 – that company is more than 200 years old, as old as the White House in Washington DC and almost as old as the United States itself. It was founded as a gunpowder company and had a big commercial success during that years as people were fighting each other all the time and the need for gunpowder was pretty high. In the last century, DuPont invented many polymers like nylon, neoprene, lycra, teflon and kevlar. Today, DuPont is active in not less than fifteen different industries: agriculutre, automotive, building & construction, chemicals, electronics, energy, food & beverages, government & public sector, health care & medical, marine, mining, packaging & printing, plastics, rail and safety & protection. I like the whole setup of that company. DuPont’s competitors are, for example, Dow Chemical or german based and well known company BASF.

And as far as I can analyse the fundamentals, also these figures seem pretty good. EPS increased from $0,96 in 2003 to $3,14 in 2013, book value increased from $9,81 to $17,51 in that 10-year period and dividends also increased constantly from $1,40 in 2003 to $1,78 per share in 2013.

Recent Buy: adidas

June isn’t a pretty exciting month from a financials point of view, but I did a second transaction this month. I bought 30 shares of well-known sporting goods producer adidas. That’s a buy I feel much more confident as I did when buying Coach Inc. (which didn’t perform well the last couple of days… btw) – adidas is a brand that accompanies me through my whole life. Even as a toddler I wore tiny adidas boots with three stripes on it, my mother has some photos when I was a school kid, wearing shirts of my favourite football teams (and they were and still are sponsored by adidas – FC Bayern olé). When I was that age, adidas produced sport equipment only. But in the last years, adidas was developing more and more to a “not sporting goods only” company. Today it’s very common to wear adidas sneakers in your leisure time, me personally, I even go to work with them and I think that’s a very good strategy. Together with Nike (which is also on my watchlist) it seems that 90 % of all people wearing sneakers and sporty-wear, do wear one of adidas’ or Nike’s products. And I think that also from a fundamental point of view, adidas is a promising buy. Book value per share is increasing steadily, EPS did also increase beside one dip in 2009 as well as the annually paid dividend, which is currently  € 1,50 per share (dividend yield: 2 %) and has been increased each year since 2010.

I’m glad I could pick up some shares somewhere at the 52 weeks low at € 74,96. Now watching the world cup makes even more fun. :)

Income & Expenses May

May is always a nice month regarding my income. But also my expenses are usually higher than rest of the year, as I mostly have to make some deposits on summer holidays and the last month I spent more money on “entertainment” (i.e. partying) and other stuff (Fitness) than the months before. My income and expenses overview:

Rent (incl. groceries): -€ 800,00
Gym membership: -€ 109,00
Garage: € 0,00 – STRIKE
Health-insurance: -€ 74,89
LC insurance: -€ 19,00
Food @ work: -€ 102,55
Restaurants: -€ 114,00
Café: -€ 10,00
Fitness Supplements: -€ 108,35
Entertainment: -€ 68,50
Food: -€ 7,00
VISA: -€ 500,00
Total expenses: -€ 1.913,29

Total Income: € 8.770,81

Saved from Income: € 3.576,00 (saving rate: 41 %)
Saved from car sell (April): € 4.000,00
Total saving rate May: 86 %

Recent Buy: Coach Inc.

As already mentioned a few days ago, I bought some shares of Coach Inc. (COH). COH is a luxury goods company, manufacturing handbags, wallets, suitcases and other leather accessoires. At a price level of ca. $ 40,00 COH is performing on a 52 weeks low – I grabbed 75 shares at € 29,91 ($40,50). Current dividend is $ 0,3375 per share, i.e. that buy adds something around € 55 Euros per year to my dividend-income. I’m also qualified for the next dividend payment on 30 June.

Investing and Ethics

Eeach time I’m going to buy some shares, I ask myself a question. Is investing in stocks and companies like Total, Chevron, Unilever, etc. ethical? It’s crystal clear that Chevron and Total are partially destroying our planet, it is very well known, that McDonald’s doesn’t remunerate its own employees in a sufficient way, Nestlé hast the opinion, that access to water should not be a fundamental right of every single human being. Nike, Zara & Co. manufacture its stuff in China, Bangladesh, India or anywhere else in Asia, depending on where costs of production are few cents cheaper. None to say, that women and children are working there for hours under dire conditions and little wage.

Some years ago, I read “Black Book On Brand Companies” — if you want to see it from another point of view, that book is like a handbook for blue-chip investing. Almost every rocksolid company is mentioned there for doing not so good things. Nestlé, Unilever, Chevron, ExxonMobil, Total, Coca Cola, H&M, Zara, Nike, Adidas, Bayer… all of them.

The question I ask myself almost everytime: Is investing in one of these companies a good thing, the rigth thing? Does my 25-shares-investment in Chevron influence anything? Chevron has nearly 2 billion shares outstanding — does my investment matter? Yes, it does. But it’s still capable for me to live with that burden. I also think it makes me a little bit more attentive, meaning I try to be a social and caring guy in general. I try to do “one random act of kindness” every day – be it helping an old woman out of the bus or buying chocolate for my colleagues at work. That’s probably influencing my life and that of the people around me more than not being invested in Chevron.

 

But I still want to invest based on a kind of “personal investing guideline”. Last year I read something about the Norwegian statens pensjonsfund utland which is the govermental pension fund. It’s one of the biggest investment funds in the world, managing more than € 500 billion. That fund has very strict principles – for example, they avoid to invest in tobacco companies, arms factories, companies which are in violation of human rights and companies causing essential ecological damages. The list of excluded companies also contains very well known enterprises (just a selection):

- Lockheed Martin Corp (21 August 2013)
- Boeing Co. (31 December 2005)
- Altria Group Inc. (31 December 2009)
- British American Tobacco Plc. (31 December 2009)
- Japan Tobacco Inc. (31 December 2009)
- Lorillard Inc. (31 December 2009)
- Philip Morris International Inc. (31 December 2009)
- Wal-Mart Stores Inc. (31 May 2006)
- Barrick Gold Corp (30 November 2008)
- Rio Tinto Plc. (30 June 2008)

You can see, they do not really care about market cap, history or dividend yield. I think that investing principles should also apply to my investment guidelines, i.e. I won’t invest in companies, listed in this “black list”.

 

Below two links with information about the statens pensjonsfond utland:

http://www.nbim.no/en/Investments/holdings-/

http://www.regjeringen.no/en/dep/fin/Selected-topics/the-government-pension-fund/responsible-investments/companies-excluded-from-the-investment-u.html?id=447122