Another week has past! I don’t how it was for you, but the four-day work week was really tough. 4 days working from home and continuously being in virtual meetings is simply just exhausting.
Having said that, the weather is great and yesterday I had the opportunity to spend quite some time outside on our land. Actually, this is what I am going to do now as well.
Have a great remainder of the Sunday and enjoy this week’s 5-bullet Sunday 😎
#COVID-19 #BackToNormal #DividendAnnouncements #EuropeanUpcomingEarnings #RecommendedReads #RecommendedVideo
🌟 Covid-19 – Reopening economies
Last week was all about opening up the economy again. Countries, i.e. Poland, are now proposing a three/four-stage approach to get somehow back to normal again.
Call me a skeptical, but if more people are like me, then I just can’t see how we’re going back to normal again until we truly have a vaccine. A cure is great for people that are infected and if you will be on time with applying it.
But who will feel comfortable standing in line for a rollercoaster knowing that in the evening you will visit your grandparents?
Or just imagine how we would behave in our office? I work in a busy office where a lot is going on. 1.5 meter social distancing might be really hard, especially during town halls and lunch breaks.
Besides that, the WHO mentioned this week that it’s not proven yet that antibody tests to the virus can be considered as immunity. Hence why group immunology is a very risky strategy until we get scientific evidence in support for it.
All of this will in my opinion still have a strong economic impact. Maybe we know after the upcoming earnings reports which companies will do pretty well during this pandemic and therefore their share price will be fine. Others clearly won’t and I believe that those will keep the economy down for a longer amount of time.
I simply don’t expect a (new) normal until at least 2022.
Will we get over it? Off course!
The homo sapiens is very intelligent and will keep doing what it has been doing for over the last few million of years: evolving. For the better and the worst….
🌟 Dividend Announcements
☝ Johnson & Johnson reported first quarter earnings and their adjusted EPS grew by 9.5% (incl. COVID-19 impact). Their numbers were really strong!
What did this resulted in?
Ka-Ching! Another 6.3% dividend increase 💪
At current prices, the stock yields 2.66% with a payout ratio of 63%. Annual dividend will be $4.04.
$JNJ is probably the highest quality company in the world and their dividend increase was like clock-work again. I simply don’t know any other company in the world that fits better to a dividend growth investor than JNJ.
☝ Procter & Gamble also reported their earnings, but in this case their fiscal third quarterly earnings. Their core EPS increased 10% versus the prior year.
This is a huge number for a relatively slow-growing company like $PG.
They also announced a 6% increase in their quarterly dividend. The stock yields 2.54% at current prices and their annual dividend will be $3.1628.
👇 Unfortunately there’s also some bad news on the European front. Louis Vuitton Moët Hennessy announced that they will be cutting their dividend by 20% compared to last year and 30% from what was proposed.
This will end an era in dividend growth for LVMH. At least 26 yrs of dividend growth or sustain is quite an accomplishment for an European company. Over the last two decades they grew their dividend with an average of slightly above 8%.
Unfortunately, COVID-19 doesn’t care about such dividend growth history.
I also fully understand that the board of directors is prudent towards their cash flow, knowing the market that they operate in. Something tells me though that they will quite quickly return to existing dividend levels again.
🌟 European Upcoming Earnings
It’s popcorn 🍿 time!
Look at the list of upcoming earnings this week from European companies! Literally a few hundred years of dividend growth is reporting out this week.
Just pick your conference call and get your pencils ready, because this week we will truly learn about how hard COVID-19 is impacting companies bottom-lines.
The hyperlinks will bring you to their conference call / webcast pages. If I couldn’t find it, then it links you to the page where you should be able to find the press releases.
- Monday 20 April: Philips NV
- Tuesday 21 April: Danone SA, Chubb LMTD, SAP SE, Stora Enso OYJ
- Wednesday 22 April: Roche Holding, Glanbia plc, Kone Oyj, Investor AB Class B
- Thursday 23 April: Unilever NV, Hermes International SCA
- Friday 24 April: Nestle SA, Sanofi SA, AAK AB
These are a lot and I will not be able to follow all of them. Especially because most are during the day when I’m working. Hence, I’m counting a bit on you here as well 😉
The majority of stocks in my portfolio are still from US origin, so therefore also few US stocks that are reporting earnings this week:
- 20 Apr: United Airlines 😱
- 21 Apr: Lockheed Martin, Coca Cola, Emerson Electric, Texas Instruments
- 22 Apr: AT&T
- 23 Apr: Eli Lilly & Co, Hershey, Intel Corp
- 24 Apr: American Express
🌟 Recommended Reads/Listens
Early Retirement Now wrote a great post about COVID-19 and it’s impact based on empirical data. I’m a fact-based person, so obviously it resonated a lot with me. So far I’ve been mostly wrong with the impact of COVID-19 on the stock market and we’ll see how it plays out. Definitely the post contains a lot of visuals for the #GraphLovers among us!
ChooseFI published an interesting podcast about the role of bonds in a portfolio. I never have spoken so far about bonds, because at the moment I don’t see a need for it. I treat half of my portfolio already as bond equivalents due to its steady nature of dividend cash flows. Nevertheless, it was a great reminder to me for consideration and for some of you this might actually be a good idea.
🌟 Recommended Video
Who doesn’t love a good old Shark Tank / Dragon’s Den pitch?
This week I really enjoyed watching the below pitch. Spoiler alert: with a Norwegian flavor 👌
This was it for the week!
I hope that you enjoyed this week’s 5-Bullet Sunday. If so, feel free to hit the like button or leave a comment 🙏.
I wish you a lovely remainder the Sunday.
— European Dividend Growth Investor