Dutch Dividend Engineer. When I turned 40 I looked at my net worth and I was shocked. This motivated me to get my act together. I started rearranging my portfolio and started with dividend-growth-investing.
This week BBL announced a 28% increase in its semi-annual dividend. The dividend is raised from $0.86 to $1.10. The dividend pay date is March 27, 2018 to shareholders of record on March 9, 2018 (ex dividend March 7, 2018).
Andrew Mackenzie, CEO of BHP Billiton stated:
“We’ve had a good start to the year. Our plans to maximise cash flow, maintain capital discipline and increase value and returns are on track. We’ve benefited from higher commodity prices but most importantly delivered a solid operating performance. We’re on track to carry this momentum forward into the second half and beyond.”
The Board of BHP Billiton has determined to pay an interim dividend of 55 US cents per share, which is covered by free cash flow. Because BBL-ADR consists of two shares of BHP, the dividend for BBL will be 110 cents. This dividend represents a payout ratio of 72%.
The new dividend amount represents an annualized dividend amount of $2.20 per share, up from $1.72. The dividend yield on current price is 1.66 %. My Vrijheid Fonds consist of 30 shares of BBL, so my annual dividends will increase by €9.93 ($12.24) after taxes.
My projected annual total amount from my shares of BBL will be €46 after taxes.
Again a very nice increase from BHP Billiton. I love these kinds of increases!
Last week AFLAC Incorporated (AFL) board has approved a 2-for-1 stock split in the form of a 100% stock dividend. This marks 9th split of the company’s stock since listing on the NYSE in 1974, and the 1st in 17 years.
The stock split is payable March 16, 2018 to shareholders of record on March 2, 2018.
CEO Daniel P. Amos stated:
“I am pleased with the Board’s action to split Aflac Incorporated’s stock. As you’ll recall, this follows a year of strong share price performance and is on top of our announcement of the Board’s action to approve an increase in the first quarter cash dividend of 15.6%. This is the ninth split of the company’s common stock since listing on the NYSE in 1974 and the first in 17 years. This split enhances the liquidity of our shares, which is in addition to our efforts to increase shareholder value.”
What does a split means? AFLAC announced a 2 for 1 split, meaning for each share of AFLAC owned pre-split, the shareholder now owned 2 shares. When a company splits its shares, the market capitalization before and after the split takes place remains the same. In normal words, the shareholder now owns more shares but each are valued at a lower price per share.
Why does a company decide to split their shares, you ask. Well companies perform a stock split, to lower the stock price to attract a wider range of buyers. And here human psychology also play a roll, because most investors are more comfortable purchasing, say, 100 shares of €10 stock as opposed to 10 shares of €100 stock. In other words, a stock split makes a stock more attractive.
And if the demand increases, the share price will also increase Of course the underlying fundamentals has to be/remain good. By deterioration fundamentals, this effect will normally not take place.
A stock split is in my opinion a strong signal from the management, that the future looks bright.
Many companies enjoy big gains when they employ a stock split. Forbes calculated that Aflac after implementing a two-for-one split in 2001, experienced gains of 73 percent.
Lets look at AFLAC stock split history from start to finish.
October 18, 1976
June 4, 1985
March 3, 1986
February 3, 1987
June 15, 1993
March 18, 1996
June 9, 1998
March 19, 2001
March 16, 2018
We can calculate that an original position size of 100 shares would have turned into 7500 after the latest split. Well this is great, just by downing nothing!
Okay, AFLAC will split its shares on March 16. When the markets opens again on the following Monday, March 19, my number of shares will have doubled and the price will have been cut in half. If we take a look at my Vrijheid Fonds, we see that at this moment I own 24 shares, with a price of $88.92 (end price February, 20 2018). The total value of my AFLAC investment it thus $2,134.08
On Monday March 19 my Vrijheid Fonds will consist of 48 shares. And when the share price will not fluctuate till March 19, the share price will be $44.46. But hey, we all know this will not be the case. So we have to see what the stock price will be on that day (I can’t look into the future unfortunately).
My projected annual total amount (2018) from my shares of AFL will not be influenced by this split and will be €34 ($42) after taxes.
I’m happy with this split. What do you think about stock splits? Are you happy with the stock split of Aflac? I like to hear from you.
This week WMT announced a 2.0% increase in its quarterly dividend. This is the 44th consecutive year of dividend increases. The dividend is raised from $0.51 to $0.52. The dividend pay date is April 2, 2018 to shareholders of record on March 9, 2018 (ex dividend March 8, 2018).
Brett Biggs, executive vice president and chief financial officer:
“We’re proud of our track record of returning meaningful cash to shareholders and are pleased to be increasing our annual dividend for the 45th consecutive year.”
The new dividend amount represents an annualized dividend amount of $2.08 per share, up from $2.04. The dividend yield on current price is 1.99 %.
My Vrijheid Fonds consist of 45 shares of WMT, so my annual dividends in 2018 will increase by € 0.93 ($1.15) after taxes.
My projected annual total amount from my shares of WMT will be €64 after taxes.
While WMT’s dividend increase is small in size, I think it’s better than no increase!
Last week KO announced a 5.4% increase in its quarterly dividend. This is the 56th consecutive year of dividend increases. The dividend is raised from $0.37 to $0.39. The dividend pay date is April 2, 2018 to shareholders of record on March 15, 2018 (ex dividend March 14, 2018).
The new dividend amount represents an annualized dividend amount of $1.56 per share, up from $1.48. The dividend yield on current price is 3.51 %.
My Vrijheid Fonds consist of 80 shares of KO, so my annual dividends will increase by €4.35 ($5.44) after taxes.
My projected annual total amount from my shares of KO will be €84 ($106) after taxes.
This is the 9th dividend increase in 2018 in my Vrijheid Fonds. An extra (free) step in my journey to FI.
With this post I share my happiness! So let’s open a coke can.
International Business Machines (IBM) Stock Analysis Pollie Style.
Two weeks ago I was invited by my local bank to attend a meeting about Bit coins. No I don’t want to invest in Bit coins (In my humble opinion Bit coins aren’t an investment, it is gambling. This because there is no value underneath the coin) but I was curious about the speaker, Rutger van Zuidam (@rutgervz). Rutger is an entrepreneur and owner of DutchChain, one of the leading Blockchain businesses in The Netherlands.
He explained block chain in his own words. He has the gift of explaining difficult things in a very easy to understand way. If you ever have the opportunity to attend one of his meetings, do go! It is definitely worth your time.
On his website he has a very easy to understand YouTube movie “The real value of bitcoin and crypto currency technology – The Blockchain explained” This video is certainly worth watching! All credits to the DutchChain company.
The real value of bitcoin and crypto currency technology - The Blockchain explained - YouTube
After his presentation I saw the possibilities of Blockchain and I was curious if there were companies on the stock market, which already have incorporated the Blockchain in their products/programs. I’ll try to write a blog post on Blockchain later on.
After some research I found a well know companies that already is using the Blockchain. They have a whole website on their products and the Blockchain. And this company is IBM.
So this analysis is on International Business Machines (IBM).
From google finance: IBM is an American multinational technology company headquartered in Armonk, New York, United States, with operations in over 170 countries. The company originated in 1911 as the Computing-Tabulating-Recording Company (CTR) and was renamed “International Business Machines” in 1924.
IBM manufactures and markets computer hardware, middleware and software, and provides hosting and consulting services. IBM is also a major research organization, holding the record for most patents generated by a business (as of 2018) for 25 consecutive years. Inventions by IBM include the automated teller machine (ATM), the PC, the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the SQL programming language, the UPC barcode, and dynamic random-access memory (DRAM).
Nicknamed Big Blue, IBM is one of 30 companies included in the Dow Jones Industrial Average and one of the world’s largest employers, with (as of 2016) nearly 380,000 employees.
Can I explain this to a 10-year old? What Does This Company Do? This company makes computer hardware and software. It also invented a lot of machines that you are using every day, e.g. ATM and the PC.
Dividend Aristocrat: IBM has raised its dividend for 22 consecutive years. It is therefore a Dividend Contender on the CCC-list from David Fish! (No.144). They are a three star stock on Morningstar.com. Because it hasn’t raised its dividend for more than 25 years, it is a Fail!
Dividend Yield > 2.5%: The dividend Yield of IBM is 3.91%. This is above the industry average of 2.0%, and above its 5 years average (3.1%). The Yield is above the requirements of the Pollie-Code, and therefore it is a Pass.
Dividend payout <70%: The dividend payout is roughly 50%. This is below the maximum ratio, and that is what a DGI wants. IBM also a Pass on this point.
DGR 1 year > 0%: The dividend growth rate for 1, 3, 5 and 10 years are 7.3, 11.6, 12.3 and 14.7. With a 3-years average around 11% this looks very good! And it is above the requirements of the Pollie-code, so it is a Pass.
P/E-ratio < 15: This is an easy metric that is well documented. It can be used as a quick metric to identify stocks that may potentially be undervalued. I use this to identify stocks that may be discounted compared to the overall stock market. IBM has a current P/E ratio of 10.67. The industry average is 20.6. The P/E ratio is below the industry average. And it is slightly lower that its 5-years average (12.1). The P/E-ratio is below the requirement of the Pollie-Code. So this is a Pass.
EPS > 0: The EPS is 6.11 Therefore IBM passed the sixth Pollie-Code
ROE > 10%: Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. The current ROE is 60.60%. This is another Pass.
Market Cap. > 100M: No problem at this point. The Market cap. Is more than $ 136.640 Mil. You guested it already: Another pass.
Chowder Rule > 12: Named after “Seeking Alpha” member Chowder. This is a method of identifying candidates for purchase based on a combination of yield and (5-year) dividend growth rate. When the sum of these elements is above 12%, the company presents an attractive entry point (8% for utilities). When the figure is above 8%, an existing holding is still considered worthy of being retained. The current Chowder rule is 16.2. So it is another Pass for IBM.
Stock price 52wk high-25%: The 52 wk. high and low are: 182.79 and 139.13. This means that IBM will be in my buying zone when the stock price is below 171.88 ((182.79-139.13)*0.75 + 139.13). At this moment IBM is trading for $152.01. Therefore it is a Pass on the Pollie-Code.
Beta: I think it’s important to have low Beta stocks in my portfolio. This helps to have a stable income all the time, even when the market has a rapid decline. The Beta for IBM is 0.94.
Debt/Equity ratio: The Debt/Equity ratio of IBM is around 2. This is very high. But IBM generates over $13 billion in annual free cash flow, and it should not have problems repaying its debt obligations.
When I look at my analysis, IBM passed 9 out of 10 metrics of the Pollie-code!! The only metric it is failing is that IBM isn’t a Dividend Aristocrat yet, but is on its way.
If we take a look at the company, you can see a leading company (or one of the leaders) in Blokchain, AI and Cloud. This means that they have attracted the right people/professionals. Furthermore IBM is soon to become a Dividend Aristocrat. All in all this makes me very happy. And in my opinion is IBM a good buy for the long-term investor.
All this information together I certainly will put IBM on my watch list for my Vrijheid Fonds and probably will take action in the near future.
What are you – the readers, thoughts on IBM? Is it a buy, do you own it?
Please comment on my analysis and thanks for stopping by!
Disclaimer: I’m not a registered investment adviser, investment professional, brokerage firm or investment company. Readers are advised that information on the website is issued solely for information purposes and not to be construed as an offer or recommendation to buy, hold, or sell any securities. All information, opinions, and analyses included are based on sources believed to be reliable, but no representation or warranty is made concerning accuracy, correctness, timeliness, or appropriateness. Please consult with an investment professional before investing any of your money.
As you already know I keep track of my extra income and hopefully I can use this extra income in the future to fuel further growth of my Vrijheid Fonds!
Not all side hustles pay immediately, therefore the numbers I present here are the accumulated revenues that hasn’t been paid out yet, but are in my various accounts. When I actually get paid, it is explicitly stated.
Since October 2017 I published my side hustle income. I got a lot of reactions and suggestions from you reader. I’m thankful for that. Keep these reactions and suggestions coming.
Okay lets look at some number for the month of January. As my frequent readers know, I now have five side-hustles going to help me generate cash for my Vrijheid Fonds. In this post I will report my accumulated revenues for all five side-hustles.
My Google AdSense income is creeping up slowly. The payout threshold is € 70, so I have a long way to go to receive my first payment. But I’m confident that I will reach this threshold this year.
Most of the money is earned by visitors that clicked on ads on my site.
I had a lot of visitors tell me, that it isn’t allowed by Google to publish any financial data. That scared me a bit, so I dove into the small print and found out it is allowed. I found no restriction about publishing my net gross income. So I will keep publishing these data.
Bol.com & Amazon.com
In January I had no revenues from Bol.com And Amazon.com. This is also due to the fact that I haven’t written a book review in a long time.
As I wrote in January, I was tipped by a reader to earn some extra money by filling in some surveys.
Euroclix is the longest running savings program in The Netherlands. I have read a lot of positive things about them. With this program you can earn money by reading emails and participating in surveys. Euroclix gives 150 clix (€1.95) bonus when you bring on a new member, but you also receive a 10% commission of the earnings of the new members. Naturally, the applied members do not notice this. The more members you bring on, the higher your earnings are. A very interesting construction.
Okay let’s be real, I don’t expect to earn a full income with this. I see it as a nice extra cash I can earn with a little bit of effort. I estimate that I can earn around 50 euros in the first year. By recruiting more members, I hope my income will grow. If you’re Dutch and also want to earn a little bit of extra cash, sign up with Euroclix, it is free. You will receive a registration bonus of 2 euros immediately upon registration. Have fun and success with earning some extra cash!
Euroclix gives you points (clix) for every survey you fill in, furthermore you earn clixs by ordering stuff (books, electronics, hotels bookings , etc.) on the internet.
In the table below I will show the number of clix I earned in a month. I had some clix from 2017, that I letn’t paid out. These are included also in the table.
Clix from 2017
When I reach the threshold of 5.000 clix, I will order Euroclix to pay out. At that moment I will receive € 70. I’m confident that I will reach this threshold in 2018.
If you also want to earn some extra cash, just try Euroclix and sign in.
There wasn’t a member board meeting in January.
January was a quiet month, I made a total of € 4.17! I’m confident that this amount will be paid out to me in 2018, for no it is still in my Google AdSense account.
I appreciate all of you who take the time to read my updates and follow along my slow and steady journey to financial freedom.
Do you have suggestions on how to improve my online income? Do you have any book suggestions about this topic?
The post you are reading now is the summary of this series. Every time a new addition to the series is posted, I will also update this post.
In august of 2015 I started this series about the wonderful world of investing. By writing these blog posts I try to educate my kids. And I hope my kids at the age of say 18, have all the financial knowledge I’m having right now. This would be a huge advantage for them!
I think when you educate kids about money, they will benefit from it for the rest of their lives. Or as the saying goes: “What is learned in the cradle is carried to the tomb”. And to educate your kid is your responsibility as a parent. And I do not take this responsibility lightly!
In this series I write blog posts about all kinds of different investment and financial topics.
I hope you like reading these posts. Feel free to share this knowledge. Together we can keep the “snowball of knowledge” rolling.
Another post in my Teaching my kids series – Bonds
As frequent reader of my blog you know that I’m writing some posts to try to financially educate my kids. I know they are still very young (6 and 9) but it is never too early to start. And they can read these blog posts later on in life (This is probably the case, because they don’t speak or read English very well at this moment – You got to love an understatement!).
This is another blog post to keep the “snowball of knowledge” rolling.
I think when you educate kids about money, they will benefit from it for the rest of their lives. Or as the saying goes: “What is learned in the cradle is carried to the tomb”. And to educate your kid is your responsibility as a parent.
This blog post is a post for my kids when they are a little bit older. I did not talk to my kids about this subject (yet).
This week we saw a decline of the markets world-wide. That got me thinking about diversification (see also my Goals 2018), the beta-factor of my Vrijheid Fonds and other ways to reduce risks.
In this post I will look at one of the other ways to reduce risks in my Vrijheid Fonds. I will try to explain to my daughters what bonds are. Bonds are an important part of my Vrijheid Fonds. I have corporate bonds (Rabobank Certificates) and government bonds (in my mutual funds).
In general, investors see bonds as more stable and less risky than equities. However, interest rates have a direct impact on this investment category. Lets explore bonds some more.
What is a bond?
A bond is a loan issued by a company or government. The buyer of a bond lends money to a government or a company for a certain period and receives a fixed annual fee for this: the coupon rate. Bonds can be bought and sold (traded) on the financial markets. The price of a bond is subject to the laws of supply and demand. When you look on the internet for the price of a bond, you see a yield and price written behind the name of the bond.
Yield is the expected return at the end of the term. If the price of a bond goes up, the yield falls and vice versa. The yield (and therefore also the price) can change if the general interest rate level goes up or down. The yield / price can also change if doubts arise about the creditworthiness of the issuer of the bond. If investors are more at risk, they want a higher compensation: the yield goes up, but the price goes down.
Bonds and interest rates
If the general interest rate level falls, the price of existing bonds will rise. New buyers want to pay more for a bond because it yields more than a bond that is newly issued with a lower coupon rate. If the general level of interest rates rises, the price of an existing bond will fall: new investors can get bonds that pay more coupon interest and therefore want to pay less for a bond with a lower coupon rate. At this moment we have very low interest rates and thus expenses bonds. In the US the interest rates are slowly rising, so we will see lower prices for bonds in the near future.
The interest rate sensitivity a bond is expressed in “Duration”
The duration is a measure of the interest rate sensitivity of a bond. The duration indicates how much the price of a bond changes with a given change in the yield of the bond. The duration is calculated on the basis of the (remaining) maturity of the bond, the coupon rate and the yield. The higher the duration, the greater the influence of an interest rate movement on the value of a loan. The lower the duration, the smaller the response of a bond to an interest increase or decrease.
In my opinion bonds provide important diversification in every investment portfolio. Because of their interest rate sensitivity bonds often respond differently than equities on economic scenarios. And by have both assets, your portfolio can handle all economic scenarios better (never bet all your money on one horse).
This is my sixteenth blog post about teaching my kids. I hope my kids at the age of say 18, have all the financial knowledge I’m having right now. This would be a huge advantage for them! And that’s why I started these blog post series.
What do you tell your kids about money and investing? I like to hear from you!
Help me get the “snowball of knowledge” rolling and share this post.
Last week CVX announced a 3.7% increase in its quarterly dividend. The dividend is raised from $1.08 to $1.12. The dividend pay date is March 12, 2018 to shareholders of record on February 16, 2018 (ex dividend February 15, 2018).
The new dividend amount represents an annualized dividend amount of $4.48 per share, up from $4.32. The dividend yield on current price is 3.57%.
My Vrijheid Fonds consist of 36 shares of CVX, so my annual dividends will increase by €3.93 ($4.90) after taxes.
My projected annual (2018) total amount from my shares of CVX will be €110.05 ($137.09) after taxes.
This is my 8th dividend increase already in 2018 for my Vrijheid Fonds!!!
DGI at work! I love it!
Due to the drop in oil prices CVX had a really hard time. Last week they announced their first dividend increase in a year and a half. By increasing the dividend, they extended their dividend growth streak to 31 years. With this raise the management shows its dedication to their shareholders. Great!