Monthly Review October 2019

In this blog post I will go through the dividends I collected in October of 2019.

I will also go through changes in my portfolio.

Current events:

I decided that I would a chapter on my Monthly Review series if something special would occur.

In October both Sampo and Nordea announced their plans to cut their annual dividend for the next year.

For international readers who might not have heard of these two companies: Nordea is one of the leading Nordic banks and Sampo is a financial group which is Nordea's largest shareholder with a 19,87% stake.

Sampo: "Change in Sampo’s view on expected dividends. Management expects to propose to the Board a dividend of EUR 2.10 - 2.30 a share for 2019"

If the dividend is €2.10 the decrease will be about -26% since the previous dividend was €2.85 per share.

Nordea:"Our new capital policy stipulates a management buffer of 150-200 bps above the regulatory CET1 requirement and a dividend pay-out ratio of 60-70%, both starting from 2020. We will continuously assess the opportunity to use share buy-backs as a tool to distribute excess capital. For 2019, Nordea targets a dividend of EUR 0.4 per share."

If the dividend is €0.40 the decrease will be about -44% since the previous dividend was €0.69 per share.

To be clear: neither of these companies declared any dividends but gave their projections and I have updated my projected annual net dividends with these guidances.

I have experienced a couple of dividend cuts in the past. For example Skanska AB cut it's dividend this year and so did some of my other smaller Finnish OMX Helsinki positions.

In the year 2019 after Q3 the percentage of my received dividends have been Sampo 26,25% and Nordea 11,38%. More than third of my dividends I have received from these two companies.

This will obviously have an effect on my annual forward net dividends. (see graphs below)

So these future dividend cuts lead to following thoughts:

These companies will most probably cut their dividend so what do I do?

I will continue to diversify my portfolio and try to do my best to find the right companies that would distribute dividends and grow their dividends into foreseeable future.

Also, what to do if more (most certainly this will be the case in the following decades to come) dividend cuts occur in the future?

I haven't really made up my mind.
I don't have a specific Investment Strategy (at least yet) or a set of rules that would tell me what to do under specific circumstances.
Maybe selling the position and opening a new one could be a viable option.
I need to look into this and research what to do with these and future dividend cuts. It will be interesting to see what kind of rules I end up with.

What I know and have decided in the past is that I will monthly add to my ETF's and Low-cost Index Funds.

Dividends received:

In October of 2019 I collected dividends from 4 companies. The total amount received in net dividends was 8,56€.

Last year I collected 5,16€ in October from 2 companies (Neste and Altria).

Year on year growth in net dividends for October was 65,77%.

The reason for the increase is mostly because I have opened positions in Iron Mountain Inc, AT&T and Genuine Parts.
I have also added to my Altria position earlier of this year and Altria has raised it's dividend.

List of the companies that paid me dividends:
Altria
Iron Mountain Inc
AT&T Inc
Genuine Parts

List of the companies that raised their dividends:
Antero Midstream

Buys:
Monthly investments in ETF's and Low-cost Index Funds.

Projected forward annual net dividends:
579,04€

Portfolios Yield on Cost net:
3,18%

I have also updated the Dividends, Goals and Portfolio pages!

I hope you enjoyed reading my blog post.

Have a great week!

Best Regards

D.G.E.