7 shares UL, 3.74% yield, ~$10.29 annual income (depending on exchange rates)
My portfolio gained additional Unilever shares today pushing my expected annual dividend income over $5,800. I'm closing in on the $6,000 mark which would mean an average of $500 per month! HCP is likely to raise payouts in a few weeks, plus OHI & KMI might also follow suit (or maybe not). However February tends to be my best month as far as dividend increases, perhaps I might reach $6,000 sometime in March? I can choose companies extremely likely to raise dividends, but I cannot control the amounts. We'll see.
Most investors base success on the size of their portfolios and probably don't care about this sort of thing. I'm a rehabilitated total return junkie. It took a few years to break the habit so trust me I understand why income investing isn't popular. My new drug is dividends, so yeah passive income is exciting for me. Dividends are equally addicting! Anyways on a serious note, I realize other investing strategies work (like indexing), it's just that I don't trust the 4% rule.
I have many free trades available and did not pay commissions today. I plan to continue small weekly purchases until my supply of free trades run out (probably July).
Symbol: UL
Core Position: No
Speculative Position: No
Expectations: Steady income; 6% annual dividend growth in € (not $)
Automatic Sell: Frozen dividend; dividend cut
Consider Selling: Business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations.
I like the UL purchase, and have been looking at Target as well given the recent weakness. Things to think about for sure!
ReplyDeleteYep I almost went with TGT. If it stays at current levels I'll probably buy it next week. Who knows, maybe TGT will get cheaper? Not the sexiest stock right now...
DeleteAwesome! I also love free trades. I rarely pay commissions.
ReplyDeleteGreat blog!
Thanks! I have 33 free trades left...
DeleteHaha, I think we're all rehabilitated from one thing or another CI. UL is as blue chip as they come in Europe. Good work
ReplyDelete-Bryan
Ha, I need to work on rehabbing some other habits like caffeine...
DeleteI agree I think UL has a lot of products that people use everyday and don't know it. Those are some of the company's that I love to invest in as they make products that are essential to hygiene. I'm going to be looking at UL as well.
ReplyDeleteDo you know what the distinction is between UN and UL is?
Yip UL has a ridiculous amount of brands that people buy everyday. I listed a few last week, but it's pointless trying to name each product.
DeleteUN & UL are both Unilever shares that can be bought on the New York Stock Exchange. UL is an ADR headquartered in London, England. UN is from the Netherlands. They are both part of the same company. However, Unilever dividends are paid in euros then converted to dollars or pounds. I chose UL over UN because the United States and the United Kingdom have a tax treaty allowing investors to receive the full dividend amount. UN shares are typically cheaper (with a better yield), but will be subject to a dividend withholding tax. I want the full dividend.
Here is an article that explains Unilever in detail: http://seekingalpha.com/article/1312951-choosing-which-unilever-share-class-is-right-for-you
If you are interested in UN shares, I'd highly recommend placing them in a taxable account. That way you can claim the dividend withholding tax when you settle with Uncle Sam.
Best wishes!
CI,
DeleteThank you for explaining that to me. I tried to figure it out real quick in the past, but never was really able to figure it all out. Thanks to your explanation its a lot more clear to me now.
Sorry my response to you was out of order over on my blog I just noticed. I hope you have enjoyed seeing all those dividends that come in during the first half of January.
UL is a great complement to the US based consumer staple companies like PG, CLX... Shifting your mindset to focusing on the income is difficult and while it's my ultimate goal, I still lose track of that sometimes.
ReplyDeleteYes it is a difficult transition. Many strategies work though, my method is not inherently better by any means. One could focus on building the largest portfolio possible with growth stocks or index funds, then switch to an income based strategy before retirement (to avoid the 4% rule). I suppose one could even use dividend growth stocks to achieve total return. I don't think dividend growth is the optimal way to build portfolio value (it's too limiting), but hey I'm just some dude with a crappy blog.
DeleteI invest the way I do for two reasons:
#1 I experienced the great recession and it scarred me for life. I discovered total return investing is simply not for me. I cannot handle the psychology of it. Man it's rough basing success on price gains only to watch your portfolio tank 40%. Nightmare. The great recession mangled quite a few dividend streaks, yet an income stream was much more secure than the portfolio value itself.
#2 I have plans that include transitioning from a full time career to part time work/less work in the next 5-10 years. I'm a person in his 30's investing like a person in his 50's. I do this on purpose this because I might start drawing on that income stream soon.
Really though it all comes down to me not wanting to sell assets to fund a sustainable (perhaps semi) retirement. That is why I'm an income investor. Psychological benefits, while nice, are secondary.
Take care!
CI -
ReplyDeleteNice purchase! UL is on my list. I think it's one of the few consumer goods stocks that is not wildly overvalued right now (look at KMB, PG, CL, etc.).
I agree with you on the 4% rule. Once I started reading about investing, dividend growth made sense. Why would I want to liquidate positions? It's like destroying a fruit-bearing plant. How do you replace that income?
Anyway, looks like you are doing great and coming along pretty far already in your journey. With those dividends, you must be at a place where dividend growth alone is able to contribute some decent increases in income.
Keep it up!
DW
Thanks Warrior. I just hope I can maintain a high savings rate this year. There are so many things I want to do, it might be difficult.
DeleteCI, didn't UL just cut the dividend recently?
ReplyDeleteThe march 2014 dividend will be the fourth consecutive payment of €.2690. Prior to that it paid €.2430 for 4 quarters. Prior to that €.2250.
DeleteThey haven't cut the dividend, though exchanges rates might make it seem like they have. I think if an investor wants to own foreign stocks, they need to be prepared for currency fluctuations.
Unilever has at least a 13 year streak (that's as far back as it goes on it's webpage by the way). Though they did switch from semi annual to quarterly payments in 2010. The downfall of the CCC lists is foreign stocks. I'm very happy Mr. Fish takes the time to publish the list, but it falls short for companies that don't pay dividends in US dollars.
That's how I approach dividend growth stocks based in other countries. I feel they need to satisfy investors in local currency, not people in the United States. Kind of silly to expect otherwise (in my opinion of course).
Best wishes!