Passive Income – Quarter 2, 2017

Well, Brexit negotiations have officially kicked off and the portfolio/ passive income slightly strengthened after Mark Carneys and Philip Hammonds’s initial speech. But everything seems so overvalued now. There was a time (before the US Presidential Election) that you could pick up stock on discount. It’s few and far between now…

passive income

I love a good scandal, not because I’m some sort of gossip or old fish wife. But because it presents buying opportunities.

From Flowers foods in their courtroom drama to Qualcomm with their dispute with Apple. You can buy great companies, with a long track record and shareholder friendly managements when they’re on the operating table.

That’s why I was able to pick up a stalwart in the telecoms industry…

So, the dividend stocks to buy this quarter were:

Q2 Dividend Growth Stock Purchases

BT Group (BT.A)

…that stalwart being BT Group. I purchased this at 34% discount.

And that scandal is a 530M (sterling) accounting fraud scandal in their Italian business. BT Italian chiefs had exaggerated their profits, to fake targets being met. Shareholders caught wind of this cover up and it inevitably sparked a wave of panic selling.

They were also fined by Ofcom for not installing high-speed internet connections in a timely manner and then avoiding paying compensation. Hence BT is going through some tough times and we can only ride out the storm by taking advantage of its generous 5.3% dividend and massive discount.

Enbridge (ENB)

Enbridge is an energy transportation business, based in Canada. It operates the largest crude oil and liquids pipeline system in the world and the company also operates Canada’s largest natural gas distribution company.

Enbridge has paid a dividend for around 63 years. What’s more, Enbridge has increased its dividend for 21 years in a row.

It closed a $43 Billion deal with Spectra Energy earlier in the year and has become a North American energy infrastructure stalwart in the making.

With the generous dividend yield of 4.7% and significant growth opportunities, I think it deserves a place in the portfolio.

Galliford Try (GFRD)

Galliford Try is a British house builder which carries out infrastructure work and regeneration schemes, where it’s profits and revenues have risen sharply over the past 5 years.

However, Galliford Try’s share price tumbled by more than 10pc in early May 2017, after it reappraised the costs of some of its old construction (legacy) contracts. Hence, I secured a 34% discount shortly after.

They’ve just picked up a 150 Million housing framework where they plan to build 1100 homes during 2017/18 and 10,000 homes over the next seven years.

Galliford Try’s dividend got cut during the banking crisis but has been soaring in value, year upon year since.

warren buffet quotes

Universal Corp (UVV)

Universal Corp is one of the oldest tobacco leaf companies in the world. They have grown dividends consecutively, for 45 years.

It’s a leaf tobacco supplier and acts as an intermediatory between farmers and the big players (major manufacturers) in the Industry, such as British American Tobacco and Philip Morris.

Sales have been dipping the last few years, due to a decline in global consumption of conventional tobacco products. Emphasis has been on other divisions, such as the liquid nicotine for vapor products. This is proving to be a lucrative market.

I feel Universal Corp is a bit of a punt, so we’ll keep a close eye on this one.

Dividend Income for Q2 2017

There’s an increase of 315.64gbp this quarter. And 911.08gbp (dividends from Q1 and Q2) has accumulated in my broker account.

DateTickerCompanyDividend (£)   
TOTAL740.12
27 June 2017FLOFlowers Foods Inc.24.44
26 June 2017RDSARoyal Dutch Shell A35.02
26 June 2017RDSBRoyal Dutch Shell B40.46
23 June 2017QCOMQualcomm Inc.20.70
23 June 2017BPBP Plc.45.53
22 June 2017SWKStanley Black & Decker Inc.12.63
14 June 2017UTXUnited Technologies Corp.14.72
14 June 2017CVXChevron Corporation18.42
14 June 2017TGTTarget Corp.18.50
06 June 2017ENBEnbridge Inc.21.68
06 June 2017BOEBoeing Co22.03
05 June 2017PFEPfizer Inc.23.67
23 May 2017AAPLApple Inc.13.11
22 May 2017APUAmerigas Partners29.89
19 May 2017BVSBovis Homes Group Plc101.40
15 May 2017SVSSavills Plc.104.06
05 May 2017OH3QDeutsche Post AG113.77
03 May 2017TAT&T Inc.28.20
02 May 2017NXTNext Plc.28.35
19 April 2017MDTMedtronic Plc.10.60
19 April 2017CAHCardinal Health Inc.12.94

Average Dividend Yield

TickerCompany Dividend Yield (%)
AVERAGE DIV YIELD4.5078571428571
APUAmerigas Partners Corp8.52
AAPLApple Inc1.74
TAT&T Inc5.15
BABoeing Co2.85
BVSBovis Homes Group Plc4.78
BPBP Plc6.85
BEPBrookfield Renewable Energy Partners5.73
BT.ABT Group5.34
CAHCardinal Health2.36
CVXChevron Corporation4.12
OH3QDeutsche Post3.20
ENBEnbridge4.72
FLOFlowers Foods Inc3.88
GFRDGalliford Try Plc7.06
MDTMedtronic Plc2.00
NXTNext Plc3.96
PFEPfizer Inc3.79
QCOMQualcomm Inc4.05
RDSARoyal Dutch Shell Plc A7.08
RDSBRoyal Dutch Shell Plc B7.08
SUSS&U Plc4.56
SVSSavills Plc3.31
SSESSE Plc6.16
SWKStanley Black & Decker Inc1.64
TGTTarget Corp4.82
UTX United Technologies Corp2.30
UVVUniversal Corp3.31
VODVodafone Group Plc5.86

Dividend Reinvestment

Next Plc (NXT) has been identified as the highest ranking stock, using my dividend ranking system.
This accumulated 911.08gbp will be used for dividend reinvestment in the next few days.

Dividend Funds Overview

The screen shot from my Hargreaves and Lansdowne (broker) account below shows the state of play after Q2,2017.

There’s been a loss of 2879.20gbp/ 6.04% re the dividend funds this quarter. There was a sudden dip more or less after Mark Carney’s other speech, re the possibility of interest rates spiking:

investment income - dividend funds

 

investment income - dividend funds

Investment ISA

There’s been a gain of 2084.31gbp/ 13.52% re the investment ISA/ trust this quarter.

investment income - investment isa

P2P Lending

Ratesetter

The Ratesetter account has increased 7.15gbp this quarter.
The ROI has decreased 0.4%.
I also received my 100gbp sign-up bonus after being a loyal customer for one year.

Ratesetter has been good to me, however, it doesn’t give me the return I desire.
I’ll most probably wind down this account and transfer the proceeds to my Twino account.

investment income

Mintos

The Mintos account has increased 29.58 Euros this quarter.
The ROI has decreased 0.04%.

investment income

Twinos

The Twinos account has increased 74gbp this quarter.
There’s also been a contribution of 2500gbp.
The ROI has increased 0.57%.

investment income

Rental Income

Total rental income this quarter is 1564.15gbp.

SIPP (Pension)

Now that the new tax year has officially commenced, I can top up the SIPP. Patience is everything though. I scan the SIPP most days to look for any changes and notice it’s in the red.

Why? The British Prime Minister had announced a snap election for June of this year (which has now passed) which created some uncertainty.

Perfect buying opportunity. I purchased 3600gbp of the Vanguard 60/40 Index fund.

The SIPP (pension) has gone down 0.84%, to 28.34% this quarter.

Takeaway

Dividend Funds: The average dividend yield is sitting at 4.5% and the dividend portfolio has capital worth 76,435.23gbp.
Hence, the dividend portfolio is on track to distribute 3439gbp per annum.

Investment ISA/ Trust: Scottish Mortgage Investment Trust (high growth fund) is on track to pay 1031gbp per annum, if using the 4% rule.

P2P Lending: Twinos is on track to pay out 263gbp per annum and Mintos is on track to pay 125 euros per annum.

Rental Income: Estimated annual rental income projected to be 4500gbp.

I also want to give a shout to Modest Money. They’re a one-stop shop in investment and retirement. They have some great writers contributing to their site. They’ve already ranked me in their league table of top finance blogs. Starting with a lowly 654th position. But you have to start somewhere! I plan on improving that ranking over time…

Actually, one of my goals is to increase that ranking, quarter by quarter. An enticement to improve my web presence, which is part of my 2017 goals.

Also, only 4 more dividend stocks required until I reach my core 30.

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