5-Bullet Sunday

5-Bullet Sunday #62

Earnings season finally came to an end for me. It was quite a rush with lot’s of company updates and including some dividend cuts. I will now use the upcoming week to digest some of them a bit deeper before I will do my annual portfolio spring cleaning.

At the same time the stock market keeps dominating the news and this week was no different in that. As an example: I think that growth investors had quite a tough week with lot’s of volatility. It’s not my thing, because I would never know when to sell such stocks.

Hence, I don’t mind missing out on super gains, because my circle of competence is dividend growth investing.

Having said that, enjoy today’s 5 Bullet Sunday ๐Ÿ‘


Content created this week:


5-Bullet Sundayย is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of earlier posts can be foundย here


๐ŸŒŸ Am I outperforming the market?

The 10 Year bond yields are rising which many believe is the main trigger for a sell-off in high growth stocks. In fact, the Nasdaq declined about 7% this week and about 10% in the last 3 weeks. And remember that these are averages, because some of the really high-growth stocks have lost even more (30% is not uncommon).

Nasdaq price chart

What I personally find interesting is that my dividend growth portfolio went up during the last week and the last few weeks. It’s on average 9% up since the start of the year while the Nasdaq is 0,5% down and the S&P500 is “only” 4% up.

This is mainly because there is also a rotation going on from growth-stocks into value stocks. My dividend investing strategy is a combination of dividend growth and value investing so this is quite a tailwind for me.

At the same time I’m also invested in several of the oil majors that are benefiting from a rapid increase in oil prices. As an example, ExxonMobil is already up 47% since the start of this year and Royal Dutch Shell 24%. These numbers have a large impact on my portfolio.

Actually, I’m glad that I didn’t sell Exxon yet and I will let it ride for now. Maybe I get a good opportunity to start selling some of my position later this year.

Having said all of this: I couldn’t care that much about the the intra-week price fluctuations in my portfolio, because I believe that it will do well over time. But I must also confess that it feels good to be one time outperforming the market.

Last year I had almost zero net return due to the energy stocks in my portfolio. You can read more about it in my 2020 annual report.

๐ŸŒŸ Never a dull moment at Danone

Not that long ago Danone has cut their dividend with a meager 8%. I’m still flabbergasted about this news, because all their metrics look good enough to have at least maintained their dividend. I mean, they hadn’t cut their dividend in the preceding 3 decades which saw a dot-com bubble bursting, few airplanes attacking the world’s capital and one of the greatest recessions in the last decade.

Hence, I was quite pissed off about Emmanuel Faber and especially after his BS comments in the Q4 2020 press release.

Danone Q4 2020 press release

If he’s fully aware of it, then why not keep the dividend flat?

Anyway, that was then. I have cooled down since then and especially after this week’s news in which the CEO has decided to resign.

Danone Press Release

Seemingly he was not only under pressure from me, but also under pressure from active investor Blue Bell Capital Partners that were demanding changes in governance and a return to growth.

This was really good news for me, because I find the stock pretty undervalued and it should do well once the economy reopens. I decided to not sell my shares after to the miniscule dividend cut, because I believe that the company has the right strategy in place.

Personally I feel pity for Emmanuel Faber, because he really cares about the world around him. This is also why we have such great brands like Alpro. I also appreciated very much that he was leading by example when they announced to forego most of their bonus compensations at the midst of the COVID-19 crisis. His ethics are at the forefront of his decision making and this is something we don’t see a lot in the CEO-suite.

On the other hand, he’s a CEO and get’s compensated enough to consider the shareholders as well. It’s part of the expectations to the job.

Hence, I’m now eagerly waiting to learn more about the next CEO to evaluate if this person will be committed to Danone’s dividend going forward.

๐ŸŒŸ Chart of the Week

I found the below chart very interesting and especially when looking at Poland and the Netherlands. The Polish economy is indeed quite open and traffic jams in Warsaw have already returned for some time. At the same time we’re hearing in our surroundings about new COVID-19 cases almost on a daily basis.

I really hope that we’ll get access to the vaccine anytime soon, but for now I have no clue if it will happen before the summer or even still this year.

๐ŸŒŸ Recommended Reads

Engineer My Freedom wrote a quick article evaluating Coca-Cola as a dividend stock. It’s a stock that hasn’t gone really anywhere over the last 5 years and I’m not sure whether it has any catalyst. Hence, it was good to read EMF’s post and opinion about the stock.

Jody Chudley wrote a short article about the American Debt problem. I’m keeping an eye on this from the sidelines, because as the proverb goes: when the US sneezes, Europe catches a cold.

Tawcan wrote a post about the best Canadian dividend stocks. If you’re into investing in Canada then definitely check this out.

๐ŸŒŸ Recommended Video

Nothing about investing this time, but I’m just sharing a podcast from Lex Fridman with Avi Loeb which I really enjoyed listening to.


Thatโ€™s it for the this week! I hope that you enjoyed this weekโ€™s 5-Bullet Sundayย ๐Ÿ™

As always, have a lovely week ahead!

Yours Truly,

European Dividend Growth Investor


Access my Dividend Growth Portfolio by joining more than 1300 of others and never miss an article.

PS: I hate spam just as much as you do.
You will receive only blog updates and you can unsubscribe whenever you want.


Disclaimer

Iโ€™m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. Iโ€™m not a finance professional through formal education. Iโ€™m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I canโ€™t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

4 2 votes
Article Rating

It's my desire to retire early via Dividend Growth Investing as a passive income stream. This is not easy and especially when living in Europe. That's why I started this blog and share my journey: to give you a European perspective.

Subscribe
Notify of
guest
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Piotr
Piotr
4 months ago

Hi, reading 5 bullet is getting to be my routine ๐Ÿ™‚ Thanks for good work. Nevertheless following more you and others I.e. blogs, Twitter I am concerned why do you focus so often on the portfolio value and its changes, the same with KO case, thatโ€™s going nowhere (so what). My understanding of dividend investing is that we buy such stocks to keep them forever unless the dividend is cut or suspended. Therefore donโ€™t bother ourselves about valuations. I do not even maintain regularly this part in my spreadsheet. Cheers

Daniel
Daniel
4 months ago

Enjoyed it as always. Thanks for sharing your thoughts.

4
0
Would love your thoughts, please comment.x
()
x
%d bloggers like this: