Hi folks, again, sorry for the lack of update on the portfolio. I was extremely busy with work the last few months. Still fighting hard to be consistent.
Let’s get straight into the portfolio update.
- Overall investment for this portfolio is RM 250,000. Currently its fully invested @ RM 248,199. The slight difference is due to transaction costs, and short term trading gains/losses.
- The portfolio is at an UNREALISED loss of RM 7,534, which is a 3% reduction. Again, UNREALISED loss is also known as “Paper loss”. I am less concerned about this as my intention is to hold the stocks for the long term.
- Currently, “REALISED” capital gain stands at a modest RM 4,260, and this is somewhat slightly similar to my remaining cash balance in my trading account.
- Now, the interesting part, I have collected total dividends of RM 8,609 since March. This, together with my realised capital gain of RM 4,260, gives me a total of RM 12,869 in gains, which have not been reinvested yet.
- I am happy with the progress so far, but I am still aiming for a pure dividend amount of RM 12,500. Realised capital gain is a bonus.
- UOA development is currently the stock that gives me the highest dividend yield at 7.6%. This company (in the property sector) declared a 14 cent dividend (per share) on 9th July 2020, went EX on 22nd July and the cash was fully received on 21st August. Currently it is at a capital loss of (-RM 2,350.)
- On 28th September 2020, UOA Development decided to sell its corporate tower in Bangsar South to UOA Reit for RM 700 million. RM 21.24 million from the proceeds will be used to pay shareholders a special dividend. This actually translates to 0.01 cents per share, so there is nothing to shout about, as majority of the proceeds will be used to fund its future projects and for working capital. (I will probably get another RM 100 In dividends.)
- Received my dividends from Mahsing and Panasonic which exceeded the RM 1,000 mark each, in addition to UOA development and CSC steel.
- I am also slightly disappointed that both Public bank and Maybank decided not to pay any dividends recently, perhaps for cash conservation purpose (banking sector has been affected badly by Covid 19 and Moratorium issues).
Top ups (Since July 2020)
- Nothing much happened. I managed to buy 1000 shares of Petronas Gas, and managed to collect RM 660 in dividends, translating to a yield of 3.9%. In addition, I purchased 1000 shares in Public bank at RM 16.02 per share, with no dividends collected so far.
Future (Remaining 3 months)
- My dividend target remains at RM 12,500 (5% of RM 250,000). There is no target in terms of capital gain, (I take this as a bonus).
- This portfolio tracks Fixed deposit rates. So, as long as the yield exceeds 2 to 3%, I am satisfied. (Although my goal is slightly higher at 5%).
- Capital gains or losses will not matter much as I am prepared to hold the stocks for the long term.
- I am considering to liquidate my holdings in Pecca and Mahsing to make my total realised capital gain around RM 10,000. (inclusive of my current RM 4,260 realised gains)
- I may also liquidate some of the other shares to free up some capital to invest in other fundamentally sound companies that declare dividends at year end. (Subject to not incurring too much capital loss)
- I have concerns about how the US election (to be held on 3rd Nov) will affect this portfolio. In addition, Covid-19 is wracking havoc in many countries, with wave 2 or 3 happening everywhere. (Malaysia has not been sparred due to the election in Sabah).
- My personal opinion is that November 2020 will be a crucial month for share markets worldwide including Malaysia.
- Currently, I am reading up on two companies that have either declared or proposed healthy dividends. They are Apollo Food Holdings Bhd (food) and Jaycorp Berhad (furniture biz). Both companies seem to be fundamentally strong, and defensive.
- I am also waiting to see the performance and dividends to be declared by Syarikat Takaful Malaysia and Bank Islam Malaysia berhad (BIMB), at year end, before deciding whether to invest in these companies.
- To address the comments from some of my readers, for this portfolio, I am not looking at growth stocks like glove or technology sectors. I have a private portfolio for this and the performance has been encouraging so far.
Some readers requested me to share how I analyse the stocks. Frankly speaking, I am not a person who is particularly good at paying attention to details, so I did no detailed analysis on any of the stocks.
Generally, I do not spend more that 1 hour in analyzing these companies.
As an ex- accountant and auditor, I will just roughly go through their latest annual or quarterly financial statements, making sure they are profitable, have a good amount of tangible non current assets, have strong cash position, and the current assets are always more than the current liability.
On the business side of things, I will just read their annual report and see if there are any news about these companies. (Economic moat i.e a strong competitive advantage is not something that I am paying attention too currently, for this portfolio)
I am also quite concerned about the dividend payment history and the yields, and will take a quick look at Price to Earnings ratio to see that its not overly valued. This is a rough framework of what I do in making my decisions.
Finally, some readers did ask me to consider sales and profit GROWTH, and earnings per share growth. While this is ideal for a growth portfolio, I will not be too concerned about these criteria’s for Dividend2030 portfolio. (Although it would be nice to have this as well)
Finally, its also my intention to keep my blog as simple as possible for beginners, so I would prefer not make the articles too technical, and will slowly bring the concepts in from time to time.
Thank you so much for reading.