And the last but not least out Y2016 Dividend income. As mentioned in our Y2016 Budget we received in total 348 EUR of dividend or passive income. This made ~2% of our total income of 20 kEUR.
Main dividend generator was Olympic Entertainment – Estonian based Casino operator that has quite good geography diversification with main markets in Baltic states and some other Europe country’s. Company surprised me with increased dividends from 0,1 EUR to 0,15 EUR yielding to impressive – 7,9% on cost (avg. 1.89 EUR/share). In total we received 76,5 EUR of dividends from this position. This company also draw my attention due to very strong balance sheet with Equity ratio of 75% virtually No financial debts, 38 mEUR cash (0,25 EUR/share, x2,5 dividends), and P/E of 10,0 base on present market price of 1,81 EUR excluding one-off 17,8 mEUR income from sale of developed Hotel in Tallinn and one-off -9,6 mEUR loss from closed casino in Poland. Only problem with this company is flat dividend policy as they paid 0,1 EUR dividends since Y2013 and they announced that 0,1 EUR dividends will be paid on Y2017 as well. Still YOC (yield on cost) amounts to prity good 5,3%. Ok problems in Poland, but still with dividend payout ratio of 56%, zero debts and nice cash reserve some slight increase would be nice.
Next largest dividend income came from Tallinna Kaubamaja – also Estonia based retailer. I like this investment even more then my largest one due to its stable and impressive Net Income and with it dividend increase in the past few years Y2016 – 0,52 EUR Δ+30%/ Y2015 – 0,40 EUR Δ+14% / Y2014 – 0,35 EUR. Received dividends 58,2 EUR YOC is even more impressive – 8,2%. Company has quite good Balance sheet with Equity ratio around 50%, Financial leverage (NetDebt/EBITDA) of x1,4 (100-32/47) and Cash reserve of 32 mEUR (0,45 EUR/share, x0,9 dividends). Due to intense growth share price has also went up from 5 EUR back in Y2014 to ~9 EUR now. P/E with present share price of 8,8 EUR is at still reasonable level – 13,9. Company has announced and actual already paid again increased dividends of 0,63 EUR Δ+21% increasing my investments YOC to almost two digit zone of 9,9%. This is the best dividend growth stock example in Baltic states. Weak spot of the company that is payout almost 100% of its earnings.
Third largest dividend provided is one of my fist investments – Tallinna Vesi. Again Estonian utility company that supplies water to Tallinn city residents. Company pay stable dividends, sadly that are freezed in past few years on 0,9 EUR level with nice YOC 6,9%. Companies balance sheet looks a but heavy, but it is normal for utility company. Equity ratio of 42%, Financial leverage of x2,1 (96-34/30) and Cash reserve of 34 mEUR (1,6 EUR/share, x1,8 dividends). P/E according to present share market price of 13,9 EUR – 15,1 staring to look a bit overvalued. Company announced that it will pay same old 0,9 EUR dividends this year. As long as it has quite good yield i’m quite happy with this investment. Company dividend payout ratio is also very high – 98%.
Then there was my employers DRIP that generated me 46,5 EUR dividends. As this position is sold I will not comment further.
And the 5th position that earned me more then 1/10 of my dividends – Tallink. Again Estonian company engaged in cruises in Baltic sea. I have entered this company just last year right before they paid dividends, which they increased from 0,02 EUR to 0,08 EUR if included payments from Capital reduction, this had YOC – 7,8%. Against good yield company looks a bit flat on top (sales) and bottom (Net Income) lines with virtually no growth over past few years. What attracted my attention is improving Balance sheet with quite strong repayment of debts decreasing from 950 mEUR back in Y2013 to 725 mEUR at end of Y2016 proportionally increasing Equity from 771 mEUR to 814 mEUR with slight stop at Y2016 due to large payments to shareholders. Equity ratio has improved from 45% to 53%. Financial leverage remains a bit high x3,2.(559-79/150). Cash reserve 79 mEUR (0,12 EUR/share, 1,5x dividends). P/E on present share market value of 0,94 EUR – 14,5 looks to be nearing to overvaluation. Sadly this year company announced that it will pay only 0,03 EUR dividends with YOC only 3,1%. Good side is that payout ratio is only 46%, plenty of room for increase in the future when company is more deleveraged.
Other positions is considered as quite insignificant. I will have a better look at thouse companies during my quarterly dividend reviews.
|Olympic Entertainment||76,5 EUR|
|Tallinna Kaubamaja||58,2 EUR|
|Tallinna Vesi||47,7 EUR|
|Employers DRIP||46,5 EUR|
|Klaipėdos nafta||16,5 EUR|
|Harju Electrics||12,8 EUR|
|Merko Construction||10,7 EUR|
|Valmieras stikla skiedra||8,6 EUR|
So we wrap this section as well. Our dividend income 348 EUR that grew by +119% last year. So we will set 3rd goal for Y2017. Lets have it reachable and set +44% growth target to reach 500 EUR dividend income this year. This should increase dividend income to 3rd place and it should be ~3% of our Total income. So we have:
Goal #3: Get 500 EUR of dividend income.