February Portfolio Update - Banks And Cars

by: Wolf Report

An update on my private and corporate portfolio dividend incomes.

During February 2019, I collected 33.60% more dividends from my private holdings compared to 2018.

I present my monthly investments, primarily in banks, healthcare, and telecommunications and talk about what we can expect in terms of investments in the coming months.

An international dividend investor's portfolio

As a value-oriented dividend investor, I believe that investing in a diversified portfolio of dividend stocks in the long term is a better option than investing in index funds or ETFs. In addition to receiving growth in stock/portfolio value, I also receive annual, quarterly, and monthly dividend payments.

In addition, in adopting a Dividend Investors mindset, I've stopped caring about short-term stock movements, and in so doing, avoid the principle of loss aversion. I recognize that my own and all human emotion is the biggest danger to long-time market success and achieving my investment goals.

I consider my investment portfolio a functioning business, and the business's goal is simple - to ensure my financial independence.

Some of the inspiration for my portfolio comes from the Government Pension fund of Norway, with regards to company and country diversity when it comes to stocks. I have no "maximum number of companies", and I don't mind having very small positions next to positions of tens of thousands of dollars.

To me, only one thing really matters in the companies in which I invest - cash flow. A company may disappoint on earnings, a company may slash or freeze its dividend for a time. If a company is in my portfolio, however, it signifies a long-term belief in the company's core business. I never act upon short-term sentiment. I won't talk about Warren Buffett much, but I'll keep it to the following quote to remind us that just because someone chatters, does not mean we should listen.

"Owners of stocks, however, too often let the capricious and often irrational behavior of their fellow owners cause them to behave irrationally as well. Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits - and, worse yet, important to consider acting upon their comments." (Source: SimplySafeDividends)

My prerequisites

I'm a young (33-year old) Swedish dividend investor who holds a large variety of international stocks. I reached financial independence in 2018 when my average monthly dividends for the first time exceeded my average monthly costs + savings goal.

I work independently and run my own limited company. These days, I work as a consultant and take contracts at leisure and as I like. Living in Sweden means that my economic requirements may be (very likely are) different from what someone in the US would require to comfortably retire. Due to a government-financed healthcare system and extensive state minimum pensions, many of the concerns and considerations investors in other nations must make don't apply to me. I believe if I were an American dividend investor, I would still be working for a few more years and save up more money (although I would also have access to a number of appealing options that are currently closed off to me).

February 2019 news

February 2019 was the month I decided to give being a contributor a try. The response so far has been overwhelming and beyond my wildest expectations. I've posted a number of articles, and each of them has been, I feel, very well received. I've received several private messages in response to each, and I hope that I will be able to provide you, the readers, with interesting options for investing and insight into why I invest as I do.

February was a very interesting month because of what happened to the Swedish bank Swedbank (OTCPK:SWDBF). Their sudden drop due to accusations of money-laundering created what I believe to be the first, real purchase opportunity in this bank for a very long time. The drop is currently sentiment-related (no real facts have been presented to/by the Swedish SEC at this point), and as such, we're probably in for another drop when this happens. Secondly, I've enjoyed the opportunity created by long-term negative sentiment against French car manufacturer Renault (OTCPK:RNLSY). I bought the stock at €59 and intend to load up further. An article to this company and the undervaluation opportunity will be published as well. In addition, there were numerous undervaluation opportunities in the NA market that I took the time to write about and to invest in.

If there are any companies you'd like to read about, be sure and let me know. I try to be an event-driven author who alerts readers to opportunities I consider worth considering, but I'm happy to write more general articles on native and European stocks as well.

Reviewing February 2018 dividends and income

(Source: Google Sheets)

I, unfortunately, don't have accurate data from prior to 2015, as I didn't start recording and tracking things until then.

Dividends during the month of February 2018 came in from the following companies in my private portfolio.

  • CVS Health (NYSE:CVS)
  • JPMorgan (NYSE:JPM)
  • Vodafone (NASDAQ:VOD)
  • AT&T (NYSE:T)
  • General Mills (NYSE:GIS)
  • Siemens (OTCPK:SIEGY)
  • Texas Instruments (NASDAQ:TXN)
  • AbbVie (NYSE:ABBV)
  • A.O. Smith (NYSE:AOS)
  • Starbucks (NASDAQ:SBUX)

The total amount of dividends paid out from my private portfolio is $352.43. As with other months, this cash is moved to my savings account.

The current average monthly dividend income from my private portfolio, based on the calculation of annual dividends/12 is $1,950.32.

Transactions during February 2018

I only purchase stocks I consider fairly valued or undervalued. I don't mind sitting with a large cash reserve on hand, as my goal of financial independence from dividend stocks is reached, and I am in no position where I feel I "have" to invest in anything or keep any certain amount of money in, or outside of the market. Nowadays, I invest solely based on valuation opportunities, and I don't tend to buy in "big bites" anymore (in relation to my available capital).

This month, the following transactions were made in my private investment account (ISK/KF).

This month, the following transactions were made in my corporate investment account (KF).

  • Purchased stock/increased exposure to Swedbank. This purchase was in response to the undervaluation opportunity I wrote about in my article, Swedbank - A Valuation Opportunity.
  • Purchased stock/increased exposure to CVS Health. This purchase was in response to the undervaluation opportunity I wrote about in my article, Fill A Prescription For CVS Today
  • Purchased stock/increased exposure to Kraft Heinz. This purchase was in response to the undervaluation opportunity I wrote about in my article, Kraft Heinz Spilled Ketchup On My Portfolio
  • Initiated a position in AbbVie. This purchase was in response to the undervaluation opportunity you can read about in the following article by Dividend Sensei.
  • Purchased stock/increased exposure to AT&T. This purchase was in response to the undervaluation opportunity I wrote about in my article, Calling On AT&T Is Worth Your Money.
  • Purchased stock/increased exposure to Pizza Pizza Royalty Corp (OTC:PZRIF). This purchase was in response to the undervaluation opportunity you can read about in Trapping Value's article.

Looking forward

In my investment decisions, I always try to put my money where my mouth - or my keyboard is. That means that I won't make any purchase decisions unless I write an article about, or an investor I trust writes an article about/argues for, the company I invest in. This makes it easy for you, my readers, to follow my decision-making process as I continue to learn, grow my dividend income, and grow as an investor.

(Source: Portfolio data, based on the cash value of my investment positions)

My portfolio composition is still heavily Scandinavian-centric. This is something I intend to change. Currently, about 50% of my total holdings are Swedish/Finnish/Norwegian (excluding cash), and about 20% of my holdings are USA/Canada. I intend to bring this balance to 50%, in the long run, to better reflect the international profile I seek to bring to the table.

Being financially independent, however, means for me that I am in no position to be stressed or made to invest in companies where I don't consider the valuation appealing.

My goal for 2019, however, is to increase NA concentration another 7-10% of total portfolio value.

Looking forward, we are entering the months of March, April, and May, during which 90%+ of all Swedish, Finnish, Norwegian, Danish, and central-European companies distribute their dividends. That means that if investment opportunities exist during these months, the coming weeks and months will represent investment-heavy periods of time.

My goal is also to, while I continue to invest in NA companies, to expose you, the reader, to investment opportunities in Sweden and in Europe, with the hope of igniting a bit of interest for many of our capable corporations over here.

I hope this article provided a bit of insight into how I invest and how I think. I'm hoping that this monthly review can give you some ideas, some advice and perhaps spark some interest or questions for me. Please message me with any inquiries you may have.

Thank you for reading.

Disclosure: I am/we are long ALL STOCKS MENTIONED. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.