Quick weeks summery:
Portfolio value: £283.89 Gain/Loss: -£21.47(-7.04%)
Stock picked: Unilever Ticker: ULVR
Shares added: 0.11 Total shared: 0.43
Dividend yield: 3.5% Payout ratio: 75%
Dividends received this week: £0.17
This weeks stock
For this weeks stock pick, I decided to go with Unilever ticker ULVR. This stock is currently down 4.74% in the portfolio and offers a great time to grab more shares as the ex dividend date is the 14th of May. I wouldn’t normally invest to capture a dividend but we are also able to average down on the average share price of this stock.
What does ULVR do?
Unilever is a fast-moving consumer good company which comes under the Consumer/Non-Cyclical sector. Unilever is made up of three main parts which are personal care, foods and home care. They own brands such as: Dove, Hellmann’s, Magnum, Ben & Jerrys, Lipton and Surf. They operate in more than 100 countries and selling products in more than 190 countries, with the company operating roughly 310 factories over 70 countries. This is one of the reasons why I enjoy this stock so much as they have so many recognisable which is familiar to every household and they operate all over the world.
Dividend Yield: 3.54% Payout ratio: 75.82%
Profit margin: 10.82%
Return on assets: 9.85%
Return on equity: 46.35%
P/E ratio (price to earnings): 19.5
Adjusted EPS: 255
EPS (Earning per share) Growth: 8%
When looking at these fundamentals I first look to see if the stock can support their dividend yield. With a Payout ratio of 75% makes ULVRs fairly high in terms of safety, to me this indicates Unilever is more of a dividend income than a dividend growth stock as having such a high payout ratio means they won’t have much room to grow their dividend. Looking at the P/E ratio makes the stock looked over valued, but taking into account going back to 2015, this stock has had their P/E ratio hovering around 20, I believe because this stock has so many well known brands this stock will always be at a slight premium. Unilever is known as a defensive stock and you can tell why with a BETA of 0.44. BETA measures the stocks volatility compared to the market, using a beta can help us work out how volatile a stock is (risk). A BETA of 1 means a stocks price is strongly correlated with the market, so its nice knowing ULVR is a less volatile more ‘safe’ stock.
Dividends received: £0.17
Total dividend (Month): £0.20
Total dividend (6 month): £1.82
Amount for charity (6 month): £0.46
With 1 month till the end of the first 6 months we have almost made £0.50, this is 25% of the dividends received from this account. It is a small start and a small donation, but we all have to start somewhere. I love the idea of an investment portfolio, helping others and trying to better the world in some way. Its going to be thrilling donating the first amount, and by the end of the year we would have more to donate as the account grows.
General account summery:
Even though the portfolio is currently at a loss we have much to celebrate. This portfolio started off with just £5 and every week another £5 has been added. We are now at the point where there is £300 invested into this account. This is a great first milestone and will be great to watch grow with every dividend payment. I am still working towards the goal of every stock to have at least £20 invested and with a portfolio with 30 stocks it may take a while. With these dividends the compounding effect will soon happen. It has been volatile in the market as of late but as a hole has been moving up. The portfolio at one point -25% and has been very interesting watching it move -7.5% which is a huge difference. When it comes to investing remember it's time in the market not timing the market.