The most important and also the most exciting part of building a solid dividend growth portfolio is to consistently add new positions to the portfolio, or to reinforce existing positions.
Every time I am adding a new position in my dividend growth portfolio, I am posting this short report. Inside this report, you will find what I actually bought, an overview of the financials of the investment, and finally what this new purchase added to my annual investment income.
These reports are here to show you how I reason before making an investment, but also to give you the motivation to do the same and start building your online empire.
Today, I added 12 shares of BMW to my portfolio, at 84.86 € per share.
BMW is a very well-known car making company, building high-end cars that are sold all around the world. I love their cars myself, so I am definitely a user and that's a sector I know very well (which is one of my criteria to invest in dividend-growing stocks: understand the product the company is selling).
The company was founded in 1916, and is still innovating today with the release of several electric cars like the i3 and i8. They are also quite active in self-driving cars, so I definitely believe they will keep on going strong in the future.
The current valuation of the stock is at 84.86 € with a P/E ratio around 8.05 according to several estimates. This is really excellent (I like P/E ratios below 20), and the stock was definitely a bargain when I bought it.
The current dividend, which is distributed yearly, is at 3.64 €. This makes the stock yield at 4.13%. I like to buy dividend paying stocks that have a yield of at least 3%, so I was satisfied with the yield of my purchase.
The stock also has a good dividend history, with a solid 5 years dividend growth of 6.83%, which is good for a dividend paying stock. They also have a very low payout ratio of 30.37%, which leaves a lot of margin for the company to grow the dividend in the future. They also have been growing their dividend for the past 7 years, which is a really good indicator for the future as well.
This purchase will add 43.68 € to my yearly investment income, based on the current dividend distribution. Thanks for reading this purchase report, and if you have any comment please leave it below!