15H·

Sell LVMH?

Greetings,

I have been in the red for several months now. Now I am back at my EK & have always gladly accepted the dividends... :)

Now I'm thinking about selling LVMH & putting the money into another dividend stock. I have stocks in mind like $O (+0,02%) or $WM (-0,38%) What do you think? The investment amount is around €10,000.

Best regards

5Posições

€ 118.360,39

7,20%

23 Comentários

Christian@Investor-College

11H

I don't know how well diversified you already are. If that's not the case, I would take the opportunity to start with exactly that. 10k is a good place to start.
If you - like me 70% - are building a dividend portfolio (rest growth 10% and ETF 20%), here is my approach in brief:

Personally, sustainable quality is important to me. That's why I apply the following criteria to every value. Please don't focus on dividend yields!

1. payout ratio (POR) --> <75% (über drei Jahre hinweg; 1 Punkt)
2. Verschuldungsgrad --> <200% (über drei Jahre hinweg; 1 Punkt)
3. Dividendenwachstumsrate (Dividend Growth Rate DGR) -->>6% ideally over 1,3,5,10 years (up to 4 points)
4. return on sales --> >5% (over 3 years; 1 point)
5. equity ratio --> >=30% (over 3 years; 1 point)
6. return on equity (RoE) --> >=15% (over 3 years; 1 point)
7. free cash flow margin (FCM) --> between 5% and 30% (over 3 years; 1 point))
8. Annual earnings growth --> 8%-12% (over 5 years; 1 point)
Makes a maximum of 11 possible points.
9. add the total return (price gain + dividend), it should be >10% for 1, 3, 5 and 10 years, we want to beat the inflation rate properly (maximum 4 points).

This makes a maximum total of 15 points.

Note: The criteria values differ slightly depending on the sector; for example, REITS are legally obliged to distribute up to 100% of their profits. Or in the capital-intensive Materials sector, the maximum pay-out ratio should be low (these companies need a lot of capital for their investments).

Let me give you my favorites per sector (score is calculated with the adjusted criteria of the sector).

Materials (4%)
$CRH (14/15)
$LIN (14/15)
$HILS (14/15)

Communication (10%)
$DTE (12/15)
$KPN (12/15)

Consumer Discretionary/Cyclical (6%)
$WSM (15/15)
$HD (12/15)
$9956 (12/15)
$TXRH (14/15)

Consumer Staples (5%)
$CCEP (15/15)
$MDLZ (13/15)

Energy (5%)
$MPC (14/15)
$CNQ (13/15)
$DR0 (13/15)

Financial / Insurance (23%)
$HSBA (13/15)
$ALV (14/15)
$MUV2 (13/15)
$NN (13/15)
$TLX (13/15)

Healthcare (10%)
$ABBV (10/15)
$DGX (13/15)
$UNH (10/15)

Industrial (15%)
$6301 (15/15)
$FAST (13/15)
$SNA (14/15)
$WSO (13/15)

Technology (8%)
$MSFT (15/15)
$AVGO (13/15)
$QCOM (13/15)
$APH (14/15)

REIT (6%)
$VICI (13/15)
$PLD (13/15)
$O (7/15) ---> I would never buy

Utilities (8%)
$NEE (14/15)
$WM (14/15)
$WEC (15/15)
$LNT (14/15)

Hope it helps.

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wasi@wasi

15H

How about $BATS or $PM?

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Mav83!@Maverick4831

14H

$PG with just under 3%?

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SteelDiv@FinSteel

13H

If you don't have to buy, you could leave it for the time being or invest little by little. I guess they could be a good fit and I think they are solid in the long term: $HNR1 $MUV2 $CSCO $DTE or $TMUS $BMY (currently cheap, speculation on rebound, also take profits if the stock is doing well) or $BATS but I would also want to get back in 5-10% lower.

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Thomas@Thomas_1963

15H

In terms of price, they wouldn't appeal to me. How about $RIO?

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Radballer@Radballer

15H

I had my eye on them too, but they are close to the ATH right now..🤔

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SteelDiv@FinSteel

13H

@Thomas_1963 That would not appeal to me in terms of price. Cyclical, volatile and just had a good run.

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RW@SeidoPacero

15H

$O is also just getting back to the starting point. Why not put the 10k in the main pot $VWRL?

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Radballer@Radballer

15H

@SeidoPacero Of course, the dividend yield is not so exhilarating..🤔

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RW@SeidoPacero

15H

@Radballer but if $O loses 4-6% and hovers around €48, you don't gain anything.

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Radballer@Radballer

14H

@SeidoPacero Also true again. However, the original aim was to generate a regular cash flow through dividends..😕

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wasi@wasi

14H

@Radballer Cash flow is cool, but certainly not the most important thing. Your ETF has better performance than your portfolio, and you are already above the tax-free amount with your dividends alone and have to pay tax...

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Radballer@Radballer

14H

@wasi But surely I have to do this at some point anyway when I withdraw and sell units from the ETF?

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wasi@wasi

14H

@Radballer at some point, but it's called tax optimization. you can run your specific example through chatgpt - here's an example with your approx. 100k at the beginning + 10k:
110,000 € initial capital,
6 % return p.a., 20-year holding period,
no interim taxation (accumulating),
and 26.375 % tax on the profit at the end.

Here are your results:

📊 1st development & final values
Category Amount
Initial capital € 110,000
Gross value after 20 years (before tax) ≈ € 352,000
Total profit € 242,000
Withholding tax + solidarity surcharge (26.375%) on profit -€ 63,800
Net final value (after tax) ≈ € 288,000
💡 2nd return after tax

Your effective after-tax return is around 5.1 % p.a.
This means that the tax deferral means you retain almost the full return.

⚖️ 3. Tax deferral advantage (for comparison)

If you were to pay tax on the profits every year (e.g. through distributions), the final value would only be around € 270,000.
👉 Tax deferral advantage: around €18,000 more final assets!

🪄 Conclusion

Accumulating ETFs are clearly advantageous for long-term investments.
You benefit from the compound interest effect on the deferred tax.

--- with 7% expected return (only 1% more) you will have 53k more instead of 18k surplus compared to the dividends

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Radballer@Radballer

14H

@wasi I currently "only" save the distributing variant with Scalable. Otherwise, your calculation definitely makes sense... 😉

So maybe I'll just invest in my ETF after all... 🤔

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wasi@wasi

14H

@Radballer ah, the $VWRL is distributing... i didn't know that. according to getquin, your total dividends are €1,909.45, i.e. you already have to pay tax on over €900 (more every year). how old are you that you need regular cash flow? if you still have a few years or even decades left, i personally would definitely go into an accumulating ETF or something more risky (growth stocks). maybe also think about bitcoin and gold $EWG2

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Radballer@Radballer

14H

@wasi 37 years. I still have the ETF in accumulating form. However, with TR and only about 7k in it.

I'll probably go back into Bitcoin when the price has "calmed down" a bit...🫣

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wasi@wasi

13H

@Radballer I'm also 37 😊
as i said, go through the taxes. i also went for dividends at the beginning, in the meantime i still hold a few that have also performed well on the side, but some have already flown again against growth stocks. the mix makes the difference.

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Ver todas as 4 restantes respostas

Ruben Schoff@Sand

I would rather add to lvmh if it falls back into the 540-480 range.
T.rowe Price or Franklin resources could be worth a look as solid divi alternatives.

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