October 2018 dividend growth update – a negative growth rate

“Compared to October 2017, our October 2018 dividend growth rate is negative. But it’s a marathon and not a sprint, we will not change course!”

After a great monthly run of beating last year’s dividend payout, this month we have only achieved 59% of last years dividend payout (€323.68 in 2018 vs €548.41 in 2017). How does this make us feel? Not much different to be honest, it’s not really a blunder. If we dig into the numbers, we can explain the why and get less concerned as it doesn’t change any of the fundamentals. We would have lover a high positive October 2018 dividend growth number and we will keep that aspiration for October 2019.

Your Diagram Title2018 October → 2018: 323.68GAW → 2017: 191.612018 → EQN: 125.06EQN → 2017: 120.262018 → PCCW: 87.09BNS → 2017: 79.82VHYL → 2017: 70.672018 → O: 48.762018 → SK3: 31.25SK3 → 2017: 28.75DRG.UN → 2017: 25.902018 → DRG.UN: 25.85O → 2017: 16.29VWRL → 2017: 15.112018 → VHYL: 4.902018 → BNS: 1.652018 October: 323.682018 October: 323.682018: 324.562018: 324.56SK3: 31.25SK3: 31.252017: 548.412017: 548.41EQN: 125.06EQN: 125.06BNS: 79.82BNS: 79.82VHYL: 70.67VHYL: 70.67O: 48.76O: 48.76DRG.UN: 25.90DRG.UN: 25.90PCCW: 87.09PCCW: 87.09GAW: 191.61GAW: 191.61VWRL: 15.11VWRL: 15.11

Dividend already owned in October 2017

Smurfit Kappa (SK3)

Smurfit Kappa is a global paper and cardboard leader. We bought the shares with the hypothesis that an increase in web-purchasing will require an increase in shipping material. As we make blunders and learn from them, we now believe that more fundemantel research is required to invest in a company, and not base it on a hunch. Smurfit Kappa was a hunch and this will be the last dividend that we receive. We sold the shares and reinvested the money in other companies. Not a significant difference (€31.25) and the other shares should be able to make up the difference.

Equiniti (EQN)

We have owned Equiniti since it’s IPO, based on the assumption that it has a significant moat in the UK finance market. It has also extended that moat in other markets, such as the US, through acquisitions. Unfortunately the company has not skyrocketed yet with regards to it’s dividend payout. The dividend payout shows a decent 3.9% increase compared with last year (€125.06 in 2018 vs €120.26 in 2017), which leaves us wondering what the payout will be next year. Fingers crossed that we see this share taking off.

Realty Income (O)

No dividend increase in October and no decrease either. We are very happy with this monthly dividend payout.

Dream Global REIT (DRG.UN)

The benefit of having a consistent monthly dividend payout, is that you know what you are getting. Very much appreciated Dream Global REIT!.

Bank of Nova Scotia (BNS)

This is where the big gap with 2017 starts to show and can be explained. Bank of Nova Scotia was seen by us a company we felt could represent the banking sector in our portfolio. Why did we want the banking sector in our portfolio? Mainly due to diversification, as it also allowed us to gain more exposure to the Canadian market.
Now why is the October 2018 payout lower than 2017 (€1.65 in 2018 vs €79.82 in 2017)? A very simple reason, change of brokerage account and slowly ramping up our position again, as we explain in a post soon. So we sold our existing position and have only bought a very minimal number of shares up until now.

vanguard All-World High Dividend (VHYL)

Another share that had a significant decline (€4.90 in 2018 vs €70.67 in 2017), with the same reason as BNS. Sold of the shares and slowly building up a position again.

Dividend new for October 2018

PCCT Ltd (00008)

A new share to our portfolio and that fills 3 of our diversity gaps. Our exposure in Asia Pacific was very low, as was our coverage in the global ICT field. PCCW fills both gaps and we are looking forward to reporting more on this share. The October 2018 dividend payout of €87.09 promises a good future.

Dividend payout timing changes for October 2018

Games Workshop (GAW)

A new category has been created due to Games Workshop this month, which is a big contributor to our dividend portfolio and it contributed €191.61 in October 2017. In 2018 it was 0.
We didn’t sell any shares and the company did not stop their dividend payout program. They just do not have a consistent dividend payout rhythm and timing differences will happen over the year. At the end of the year we will compare the full-year payout.

Dividend discontinued before October 2018

Vanguard FTSE All-World (VWRL)

As we saw with BNS and VHYL, the change in brokerage account made an impact on our October 2018 dividend growth rate. For VWRL, we have not purchased any shares in our new brokerage account and this we have no shares. The October 2017 dividend payout of €15.11 is not significant this month.

Total October 2018: €323.68 vs €548.41 October 2017

It would have been great to write a post about how our October 2018 dividend growth rate hit the >60% numbers as we have seen in other months. It would have been easy to fabricate a story that shows that we are growing every month and no one would have known any better.
But we would and we do not want to make that blunder. We embrace our blunders and feel that this month was not a blunder. It was more a rebalancing of our portfolio as many experienced investor advice people should do. Will October 2019 show that we made the right decisions?

How did your October go and are you satisfied?

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