#108 Dividend Portfolio Updates

Aim is to have a portfolio of at least 15 companies, therefore reducing the weighting/risk on any individual company to below 10% of value of portfolio.

Therefore, given the size of my portfolio I will not be looking at topping up existing holdings, even though some prices look very tempting, but instead will add in 7 more holdings with the £1,400.

Let's rattle through what I've reviewed so far, and the shortlist...

First off, those big or often touted companies I am not currently going to invest in...

Why not? Average Payout Ratio Too High over last 5 years;
BAE Systems BA.
Vodafone VOD

Standard Life Aberdeen SLA

Centrica CNA

Imperal Brands IMB

Royal Dutsh Shell RDSB

BP BP.

GlaxoSmithKlein GSK

Why not? Broken Dividend Payments in previous years;
Persimmon PSN

So who am I considering..

Have looked into in detail and almost happy to proceed...
AHT - if yield is above 2.5%
JMAT
DCC
BATS - if I can get over investing in Tobacco and am happy with debt (current ratio)
HLMA - if yield is above 2.5% (unlikely)

Appear promising but haven't gone into enough detail...

BRBY
RMV - if yield is above 2.5% (unlikely)
SMIN
MGGT - if I am happy with EPS history
NXT
VCT
RB.
WPP
BT.A

Today I'll only focus on the one's I've looked into in detail, and so max I'll do is 5 investments out of the 7.

However, on todays prices both AHT (2.4%) and HLMA (0.89%) are below my minimum target yield of 2.5% and so the max is 3 out of 7 purchases.

BATS - yield of ~8.4%

High yield, great dividend history (20 years+ increasing dividends), low PE ratio, good Payout ratio, good EPS growth history, great operating margins... 2 fly's in the ointment 1) Tobacco is surely dying out and 2) current ratio debt is high.

However, I'm going to be a bit more risky than normal and proceed with this based on the fact that if it wasn't Tobacco this would be a sure-thing and I'll put faith in the size and scale of the business being able to adapt.

Purchased 8 shares for a cost (inc fees) price of £25.89 per share producing a yield on cost of 8.11% and adding £16.80 to my expected annual dividend, taking the total too £82.61.

DCC - yield of ~2.9%

Whilst it looks very good it is within the Support Services sector, of which I already own BNZL. I am not too precious about over-weighting this way, but I think it makes sense to spend more time reviewing this before proceeding.

No purchase.


JMAT - yield of ~4.5%

Operating in Chemicals sector. They break themselves down into 4 global areas; clean air, efficient natural resources, health and new markets.

Great dividend history (20 years+ increasing dividends), nice low payout ratio and PE, operating margins are lower than I'd like, but the have good dividend cover and low debt.

No real concerns about these guys, will purchase.

Purchased 11 shares for a cost (inc fees) price of £19.18 per share producing a yield on cost of 4.46% and adding £9.41 expected annual income to my portfolio, taking the total to £92.01.

Not far from £100 expected annual income. However, we'll see how Covid-19 decimates the dividends. Have to remember I am investing for the long game.

Getting closer to the 15> portfolio and have made great strides in March.