Recent buy

I was sitting on few kEUR for some time now as one of my Y2019 goal was to accumulate 5 kEUR of cash. Now that I have changed job and my III pension fund with 8 kEUR is ready for a cash out I decided to expand my share investments:

XOM

Since oil stocks was taking some serious hit I decided to establish a position in this sector and what is better then the largest player ExxonMobile. Bought 15 shares for 70.33 USD / share or 1.065 USD (incl. fee). With dividends of 0,87 USD/quarter YOC is quite nice 3,5% after tax (-30%) bringing additional +36,5 USD or +33 EUR annual dividend income. XOM historicaly had quite low dividend yield very stable dividend growth and low dividend payout. With latest volatility in oil price lead to volatility of their earnings as well. Although current P/E stands around 20 and payout ratio close to 100% results should be better in L/T perspective. What I like about this company is their very solid balance sheet. Solid equity ratio of 57% and low leverage of ~1x with Net debt (34,8 bn$ = 37,8 bn$ fin. debt – 3 bn$ cash) / EBITDA (34,2 bn$). Yes their financial figures look weak, but I think with such strong balance and huge presence in the market company should ride trough. On top they are investing a lot in future energy solutions, so I thinks they should be here and paying growing dividends for another 10-20 years.

Baltic_horizon_logo

Now that I have established a position in high dividend yield oil sector and have extra heavy possition in high dividend paying telecom sector as well there is only one high dividend paying sector missing – REIT. I looked at some of US REIT, but found one quite solid REIT here in Baltics as well – Baltic horizon fund. Fund has a strategy to payout 80% of their free cash flow, so this looks to be a stable investment. Fund looks to be well diversified with 15 prime RE objects 5 in each Baltic country Capital city and spread in different type of RE – Office, Retail and leisure. What I also like about the fund is their clear 50% leverage strategy, which means that fund capital ratio is around 50%. Debt/EBITDA is hard to calculate as some of assets are bought within last 12 months, but it should be around x11 as NetDebt is 191 mEUR (197 mEUR fin.debts – 6 mEUR cash) and EBITDA according to last quarter result should be around 18 mEUR (4.5 mEUR x 4). Looks a bit high, but that’s the way REIT operates. Dividends are paid quarterly (!) last payment 0,027 EUR/unit with unit price of 1,33 EUR dividend yield stands at super nice 6,9% after tax (-15%). So I decided to invest big here and bought 1.500 units of the fund paying 1,33 EUR / unit or 2.000 EUR incl. fee. This investment is estimated to bring us +138 EUR annual dividend income.

Both of these investment bought us whooping +171 EUR of forward post tax dividend income elevating our passive income to new heights of 529 EUR or 44 EUR / mo. and crossing one big milestone and L/T goals of 500 EUR forward dividend income. Next stop 1 kEUR mark πŸ™‚

2 thoughts on “Recent buy

Add yours

  1. Nice to see you back in action P2035! I own a few stocks of XOM as well.
    You went pretty big with Baltic Horizon, so it’s a huge boost to your dividend income! I am thinking about adding a new REIT to my portfolio as well but haven’t decided which one yet. Maybe I should look closer to Baltic Horizon.
    Congrats on a job move (if I understood correctly)! Hoping to hear more about that πŸ™‚

    Like

    1. Thanks BI. Yes i have moved to new job with bigger salary πŸ™‚ I think Baltic horizon is the best cash flow generating REIT in baltics. 2 other exist Invalda and Eften but they have smaller dividend, holever much less leveraged.

      Liked by 1 person

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