July Update: How I Received 170 Percent More Dividends And Why I Bought Facebook

Is there anything better in the financial world than more and more dividends? Well, I guess not. And so in July, I was again pleased to see a substantial increase in my dividends.

With this little intro, I welcome you to a new episode of my Dividend Diary on the TEV blog, in which I document my monthly dividend income and the changes in my broadly diversified retirement portfolio. Here you can find out which companies have generated juicy cash flow for me each month and which stocks went into my basket. Besides, I analyze how the month has performed compared to the previous year. In the best case, my dividend income has increased.


As you know, I take care of my wealth management. To keep things simple, I have built three pillars:

  • Active income.
  • Passive income.
  • Conversion.

Dividends fall into the last two categories. They are passive because I no longer have to work to receive the payments. Furthermore, they also contribute to the conversion because I reinvest the dividends and thus increase my passive income through dividends for the future.


My monthly dividend income in July:

This month I have received payments (before taxes) from the following companies:

  • Kimberly-Clark (9.17 EUR)
  • Iron Mountain (13.50 EUR)
  • GlaxoSmithKline PLC (10.48 EUR)
  • Altria (17.66 EUR)
  • Realty Income (3.21 EUR)
  • Leggett & Platt (10.22 EUR)
  • Cisco (6.28 EUR)
  • Simon Property Group (5.01 EUR)
  • Vonovia (31.40 EUR)

The total dividend income in July was: 107.46 EUR.

Dividend Check

Now let’s see how the performance was compared to the previous year. Last year, I received only EUR 39.85 in dividends in July, which represents an increase of 170 percent. In total, I have received more than EUR 1000 in dividends this year. With Leggett & Platt, Cisco, Iron Mountain, and Realty Income, I have now also received cash from companies I bought in March and April during the COVID-19 crash. July benefited from the Vonovia dividend. In the previous years, I already received the dividend in June. But even if we exclude Vonovia, the month was excellent. The overall development is as follows:

Dividends per month July
Dividends per month in July ’20

Stock purchases in July

In July, I bought more shares of great companies so that the dividends will continue to rise in the future:

  • General Dynamics (8)
  • IBM (3)
  • Facebook (5)
  • GlaxoSmithKline (18)

TEV, why do you have a watchlist if you never buy any stocks of it?

If you look at my report from last month, you will see that none of the companies were on my watchlist. Why is that? Is the watchlist nonsense, and in the end, I only do what I want anyway? To be honest, yeah, a little bit. I don’t have a fixed system for my stock purchases, and that’s one thing I have to consider changing.

However, I have an extensive overview of many companies that I look at from time to time. The companies on the watchlist are mostly companies that I have currently examined particularly carefully, where substantial changes are imminent or which are currently in my focus for other reasons.

They are present to me in some form, which is why I put them on the list and perhaps monitor them a little more closely than other companies. But it often happens that I invest in other companies, after all. Bayer, for example, is very much in my focus, but I already have too many shares in the company. As it concerns Taiwan Semiconductor, I am still deterred by the tax problems.  And so it happens that I buy other companies because it seems convenient at that moment.

Why I bought General Dynamics and GlaxoSmithKline

Before I say a little more about IBM and Facebook, I’ll briefly talk about my other two purchases. Firstly, I bought 8 shares of General Dynamics. After I already wrote somewhat about this dividend aristocrat with a current yield of 3 percent and  a pre-COVID-19 payout ratio below 40 percent in my ex-dividend calendar, I continued my due diligence. And yes, I have decided that now is a good time for a first investment.

Fair value calculation General Dynamics
Fair value calculation General Dynamics (Source: DividendStocks.Cash)

As for GlaxoSmithKline, I have long wanted to increase my shares in this UK-based company. I also wanted to buy a non-US company after having invested heavily in US stocks lately. And thanks to the strong € the share prices fell a little bit, so I took the opportunity to buy 18 shares.

Why I bought IBM

I increased my stake in IBM and bought three more shares of the company. The company has published good quarterly figures for its cloud business. It seems that the merger thesis of the RedHat acquisition is working out. Besides, the company is somewhat undervalued in fundamental terms.

Fair value calculation IBM
Fair value calculation IBM (Source: DividendStocks.Cash)

Why I bought Facebook

I also bought Facebook shares for the first time. 5 A-shares have entered my portfolio, where I want to keep them as long as possible. It is the first tranche, and it may well be that I strike again and buy more shares. With that investment, I deviate somewhat from my cash-flow-oriented strategy. But that’s not too bad, because I also want to have some growth stocks in my portfolio. For example, I have invested in Tencent and TeamViewer. I also bought Apple a few years ago as a growth stock.

You can read the reasons for my purchase in my Facebook analysis. For me, the company offers an excellent investment story and yes, it took me quite some time to understand it. When people criticize that Facebook depends on advertising, I think that’s too short-sighted. Advertising and advertising by Facebook are not necessarily the same. I think Facebook is going to revolutionize the way businesses find customers. The reason for this is the sheer number of people that Facebook reaches.

The following quote from my analysis is the decisive point for me:

I suspect that Facebook is increasingly developing its ecosystem in the direction of a digital “mall” or digital “shopping center” where people meet for social reasons and, at the same time, buy products alone or together. The advantages over Amazon and the Amazon Marketplace are apparent. At Amazon, customers have to navigate to Amazon; at Facebook, customers are already there in the form of active users and only need to be picked up by the company present there. And who picks up the customers? Facebook, of course, using personalized advertising.

Although the company is currently slightly overvalued, I still think it is a good time to make an initial investment. If the price drops, I’ll just buy more.

Fair value calculation of Facebook powered by DividendStocks.Cash
Fair value calculation of Facebook (Source: DividendStocks.Cash)

Watchlist for August

In August, there will be some additional purchases of shares. I am relatively flexible here. Either I buy new positions, or I increase my shares in existing investments. The following companies are on my watchlist in particular:

  • Microsoft (MSFT)
  • Taiwan Semiconductor (TSM)
  • Cisco (CSCO)
  • Bayer
  • Diageo (DEO)
  • Sysco (SYY)
  • AT&T (T)

Have you received dividends this month? What’s on your watchlist? Let me know and just write it in the comments.



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Vic
Vic
1 month ago

Thanks for the update. Slow and steady is the path of choice I guess 🙂 Looking forward to your Bayer update after its Q numbers.

SharePro
SharePro
1 month ago

Hello,

Thank you for posting great articles.

Why are you acutally tracing on ex-divident basis. Is your strategy to buy low on ex-dividend or just before dividend will be paid. The latter would make more sense to me. What is your reasoning.

I’m following your articles on SA. SA is a great platform. Unfornutaley its focus is on the US market. Thus my depot has an overweight in US shares. To split the risk I’d be interested in buying more European shares. I’m interested in learning how I could identify more European quality shares.

Thanks for your feedback.

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