It’s already the 3rd week of February. Think about that, we were JUST talking about new years plans and now we are already almost done with the first 2 months of this new year.
For the US, Dutch and some UK investors this doesn’t play a big role, but for everyone else, things are getting exciting. We are about to enter the main dividend season, and investors looking for some great dividend-plays have still plenty of opportunities to consider. On my part over the last 2 months, I have bought shares in Daimler, BASF, Royal Dutch Shell (RDSB), and AT&T.
For AT&T I have increased an existing position, to cost-average-down my original purchasing price. This company is not only a great dividend stock, but I believe also that it’s about to reach a turning point this year. The acquisition of Time Warner will ensure a steady cash-flow to pay for the dividends, and the CEO promised to start focusing on paying down the companies debts. So these are 2 great reasons. Some people talk about the 5G roll-out and the potential benefits of this development, but I remain skeptical for now and don’t think it will have any significant contribution to the company’s bottom line for this or even next year. New technologies usually require stronger investments and it takes some time until those start turning into profits. Nevertheless, this may be anticipated by the market ahead, thus there is a chance for the stock to start moving up once those 5G plans become substantial. But no matter what you think, with a well covered 6,5 % yielding dividend payer on this scale, I don’t really see any downside at this point.
RDSB, the Royal Dutch Shell shares which are registered through the UK and have therefore no withholding tax, is probably one of the best dividends stocks you can buy right now. 5,9 % with quarterly payments and exposure to not only one of the most profitable industry sectors in the world (oil), but also to a great company that is continuously shifting towards renewables and has a clear vision on where energy needs to go from here. Shell is not only investing on a large-scale in solar-energy but has also recently acquired the German company Sonnen, which is producing home-energy storage units. For me, Shell is just the right company for the conscious investor. It makes money with the energy of the past and sets itself up to become an energy leader with the energy of the future.
BASF is a German giant in the chemistry sector. The German withholding tax is terrible so this sweet 5,2 % yield on dividend (as of the time of writing this article) will shrink down to something around 3,4 %. But it’s still better than any savings account and the stock trades at lows that we have seen last time around 2016. I am not sure whether I will keep it as a dividend stock or trade it out of my portfolio when it gets back on track. Let’s see.
Daimler is, of course, considered a risky play at the moment. President Trump could impose tariffs, Tesla could keep eating up market share, CATL could increase prices for the new batteries that Daimler needs for their new electric cars (cause they forgot to do some research & development on that front over the recent years)… there are many question marks and it sure is a risky investment. But as far as I see it, all these uncertainties are priced into the stock already and any good news might propel the company back to its highs. And the dividend yield of 6,45 % (or something around 4,6 % after tax) is pretty solid.
Disclosure: There are obviously many more dividend plays to think about and since I am not a professional advisor, please ensure to do your own due diligence before making any financial decisions that may include the purchase of stocks. As I wrote above, I owe stocks of all the companies mentioned in this article.
The great but also annoying thing about the stock market is, that it’s always moving up and down. There are always opportunities – and disappointments – but trying to time the market is wasted time. The most reliable way to profit from stocks is simply to keep investing and to buy stocks which present a great value to us.
In my opinion, one of the most reliable factors is the dividend, because if a company can pay and cover its dividends in bad times, then there is a great chance that the company will do even better in good times. And don’t be fooled. Those good times always come back, we just don’t know exactly when.