1D·

My dividend strategy

Dear Community,

Last week I switched from an exclusively accumulating investment strategy to an investment strategy based exclusively on dividends.

I would like to share this with you and am very happy to receive your feedback - however critical it may be. The main thing is that it is constructive and understandable. :)

My portfolio consists of 25 positions.

Almost 54% of the portfolio is made up of ETFs. The remaining 46% is therefore divided between 22 shares.

ETFs

VanEck Developed Markets Div Lead ETF $TDIV (-0.46%) (24.5%) - Very good dividend (4%); Strong dividend growth (3Y) (⌀ 11%)
HSBC MSCI World ETF $HMWO (-0.7%) (24.5%) - Moderate dividend (1.5%); Strong dividend growth (3Y) (⌀ 11.5%)
WisdomTree Em Mkts SmallCap Dividend ETF (5%) - Good dividend (3.9%); Very strong dividend growth (3Y) (⌀ 20.1%)

Equities

Financial service providers

Allianz $ALV (+1.54%) (insurer) - Good dividend (3.7%); Strong dividend growth (3Y) (⌀ 12.8%)
Mutares $MUX (-3.78%) (investment manager) - Very strong dividend (6.5%); Strong dividend growth (3Y) (⌀ 14.5%)
Realty Income $O (-0.45%) (real estate investment trust) - Strong dividend (5.8%); Good dividend growth (3Y) (⌀ 6.5%)
Aflac $AFL (+0.05%) (insurer) - Moderate dividend (2.1%); Very strong dividend growth (3Y) (⌀ 18.4% )
Prologis $PLD (-0.09%) (real estate investment trust) - Good dividend (3.9%); very strong dividend growth (3Y) (⌀ 18.1%)
Main Street Capital $MAIN (-1.27%) (investment trust) - Very strong dividend (8.1%); Very strong dividend growth (3Y) (⌀ 20.1%)
HSBC $HSBA (+0.3%) (major bank) - Very strong dividend (7.9%); Very strong dividend growth (3Y) (⌀ 60.7%)
Pub Strg Oprtng $PSA (+0.17%) (real estate investment trust) - Strong dividend (4.2%); Very strong dividend growth (3Y) (⌀ 17.5%)
Progressive $PGR (-0.01%) (insurer) - Moderate dividend (1.9%); Negative dividend growth (3Y) (⌀ -41.8%)

Energy

Greencoat UK Wind $UKW (+1.08%) (infrastructure fund) - Very strong dividend (8.6%); Strong dividend growth (3Y) (⌀ 15.7%)
Shell $SHEL (-2.58%) (oil company) - Strong dividend (4.4%); Very strong dividend growth (3Y) (⌀ 22%)
NextEra Energy $NEE (-1.27%) (energy supplier) - Good dividend (3.3%); Strong dividend growth (3Y) (⌀ 13.4%)
OMV $OMV (-0.22%) (oil company) - Very strong dividend (11.1%); Very strong dividend growth (3Y) (⌀ 40%)

Healthcare

Novo Nordisk $NOVO B (-0.12%) (pharmaceutical company) - Moderate dividend (2.5%); very strong dividend growth (3Y) (⌀ 28.3%)
Zoetis $ZTS (+0.3%) (pharmaceutical group) - Weak yield (1.2%); very strong dividend growth (3Y) (⌀ 23.7%)

Industry

DHL $DHL (-3.32%) (air freight/courier service) - Strong dividend (4.8%); Strong dividend growth (3Y) (⌀ 11.1%)
Palfinger $PAL (-1.01%) (Mechanical Engineering) - Good dividend (3%); Very strong dividend growth (3Y) (⌀ 32.6%)

Consumer goods

Ferrari $RACE (+0.59%) (Automotive) - Low dividend (0.8%); very strong dividend growth (3Y) (⌀ 41.2%)
Volkswagen $VOW (-0.56%) (Automobiles) - Very strong dividend (9.1%); Very strong dividend growth (3Y) (⌀ 23.3%)

Materials

Rio Tinto $RIO (+0.19%) (metals and mining group) - Strong dividend (5.4%); Negative dividend growth (3Y) (⌀ -21%)
Vidrala $VID (-0.26%) (glass packaging) - Strong dividend (5.8%); very strong dividend growth (3Y) (⌀ 75.2%)

Information Technology

Amphenol $APH (-0.54%) (electrical engineering) - Low dividend (0.8%); very strong dividend growth (3Y) (⌀ 23.3%)

29 Comments

DevlishTomato@risk_taker_1816

Hi, you might want to take another look at British American tobacco shares, $BATS, which is also mega in terms of dividends and the share price isn't bad either

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Kreon@Kreon

I am always ambivalent about dividend strategies and don't understand the focus on young people, to say the least.

You also always have to factor in the share price performance. I'd rather have an 8% increase in value than 2% + 4% dividends. I've also been layering up on dividend stocks recently, but only for diversification (I'm older :-)).

High dividends can also be a sign of a stagnating business model, e.g. tobacco companies.

But I like your selection and it seems well thought out to me.

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GMK_VII@GMK_VII

@Kreon Thank you for your feedback.
The reasons for the distributing portfolio are
- on the one hand, the automated realization of profits in the form of dividends, whereby the tax-free saver's lump sum of € 1000 is automatically used without having to actively realize it in the form of active sales of shares
- on the other hand, almost 50% of the investments are in ETFs (which also include the Magnificent 7, for example), while 50% are in shares, some of which have a high growth rate.

Examples: (The price of the MSCI World has risen by 86% in the last 5 years)
$NOVO B by 112%
$APH by 272%
$MUX by 220%
$PGR by 260%
$RACE by 183%

etc.

Of course, there are accumulating shares that have shown a higher return in recent years ( $NVDA + 1435%, $RHM + 2536% and many more), but I find it difficult to forecast the future based on this. In addition, I have the MSCI World in my portfolio and therefore do not rely exclusively on individual dividend-paying positions.

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Walter S.@Roots

23H

Hello
What you have described sounds convincing to me...
Your list seems very well thought out.
I can't find any stocks that have a major flaw.
The focus on etfs as the core is top.
Have fun investing.
Best regards.

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GMK_VII@GMK_VII

22H

@Roots Thank you!

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ThomasHH@ThomasHH

13H

One very interesting dividend share is OPAP, the Greek dividend king. Very few people have it on their radar.

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GMK_VII@GMK_VII

12H

@ThomasHH I will have a look, thank you very much!

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Wout@HooiFork

11H

Happy holder of shell, but their dividend growth will be 4 ish% the next 5 years. Even though the share buyback machine is great! Just so u know what to expect

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Wout@HooiFork

11H

@HooiFork CEO said so last report

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Christian@Investor-College

10H

I would like to add my approach and the criteria I apply to a "good quality" dividend share for my dividend portfolio:

- Payout ratio (POR) --> <75% (über drei Jahre hinweg)
- Verschuldungsgrad --> <200% (über drei Jahre hinweg)
- Dividendenwachstumsrate (Dividend Growth Rate DGR) --> 6% ideally over 1,3,5,10 years; I want to at least beat inflation
- Yield on cost (YoC) --> >2% or 1.5x-2- x YoC S&P 500
- Return on sales --> >5%
- Equity ratio --> >=30%
- Return on equity (RoE) --> >=15%
- Free cash flow margin (FCM) --> between 5% and 30% (over three years)
- Annual earnings growth --> 8%-12% (over the last 5 years)

And finally, of course, the share price should have developed positively over the last 1,3,5 and 10 years (+10% p.a.)

In the actual analysis, the stated target values for the criteria are adjusted on a sector-specific basis (according to GICS). But that would be going too far. I have automated the selection process with WiseSheet.io and Google Sheet. Just let me know if you are interested.

Possible selection (excerpt)

Materials:
$CRH (CRH Group)
$APD (Air Products & Chemicals)
$1378 (China Hongqiao)

Communication:
$762 (China Unicom)
$DTE (Deutsche Telekom)
$MTELEKOM (Magyar Telekom)
$KPN (KPN)

Consumer Discretionary:
$NKE (Nike)
$2020 (Anta Sports Products)
$HD (Home Depot)
$EVO (Evolution)

Consumer Staples:
$HSY (Hershey)
$288 (WH Group)
$CALM (Cal-Main Foods)

Energy:
$CNQ (Canadian Natural Resources)
$1378 (China Hongqiao)
$STNG (Scorpio Tankers)
$MPC (Marathon Petroleum)
$ETG (Envitec Biogas)

Finance:
$ALV (Allianz)
$MUV2 (Munich Re)
$TLX (Talanx)
$INGA (ING Groep)
$NN (NN Groep)
$2388 (BOC Hong Kong)

Healthcare:
$ABBV (Abbvie)
$GILD (Gilead)
$4540 (Tsamura)

Industrial:
$FAST (Fastenal)
$SNA (Snap-on)
$8001 (Itochu)
$6301 (Komatsu)

Technology:
$MSFT (Microsoft)
$QCOM (Qualcomm)
$APH (Amphenol)

REITS:
$VICI (Vici)
$PLD (Prologis)

Utilities:
$NEE (Nextera)
$WM (Waste Management)
$6508 (Meidensha)

The biggest challenge for me is the weighting of the individual sectors. Finance has done very, very well and there is a tendency to overweight here.
How would you approach this and break it down by sector in percentage terms?

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Tom@Tom_laeuft

Looks good🍻

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Tenbagger2024@Tenbagger2024

$LIGHT has a very good dividend yield. Perhaps interesting for you

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KonradM@KonradM

A very interesting portfolio. I also have some positions in my dividend portfolio.
Have you already looked into $MAIN? If so, what was your reason for not taking up this position?

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GMK_VII@GMK_VII

@KonradM Thanks for the feedback. I'm sure you missed it: $MAIN has a place in my portfolio. :)

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KonradM@KonradM

23H

@GMK_VII ah okay, then I just missed it 😅 But as I said, very interesting companies. Maybe I'll have a look at some of them too 😉
What actually made you choose Volkswagen over BMW or Mercedes? The news situation has been rather semi-optimal in recent weeks/months, hasn't it?

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GMK_VII@GMK_VII

22H

@KonradM In addition to an emotional interest in VW (I have always driven it, I did my apprenticeship there), it is the forecast by Deutsche Bank, which says that $VOW will be one of the top 5 shares in Germany in terms of the billions invested in infrastructure. VW is said to have a share price potential of +39%. More specifically, the truck business is likely to benefit from the second-round effects of rising demand for transportation as a result of economic activity, according to Deutsche Bank.

Source: https://www.boersenbrief.at/blog/aktien-koalitionspakt-deutsche-bank-kurspotenzial/

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KonradM@KonradM

22H

@GMK_VII ah good, how nice that you always learn something new here 👌

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Kai@Dividenden-Sammler

23H

The only thing I'm wondering about is your consumer sector. 2 automobile manufacturers ... actually more at home in the industrial sector and not in the consumer sector and then also automobile twice where they are doing so well and if I would bet at least the German colleague will have a hard time in the future.

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KonradM@KonradM

23H

@Dividenden-Sammler Well, I think the classification was based on the "categorization" of getquin. Because automotive companies are generally classified as consumer goods. I am currently invested in BMW and getquin also shows me the consumer goods sector.

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GMK_VII@GMK_VII

22H

@Dividenden-Sammler According to Deutsche Bank, VW should benefit from the billion-euro infrastructure package. Share price forecast according to Deutsche Bank: +39%/€125.

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