Saturday, May 18, 2019

Dividend Portfolio

Inspired by posts like this and this, I've decided to slowly start a dividend portfolio.  I'm looking for stocks with a 6% yield -  the hard part is to judge if its sustainable.

I aim to buy SGD 8K worth of stocks per month for the next 3 years.  Plus a little more when I get my bonus.   This should give me a 300K portfolio in 3 years, with an income of 18K per year.  I expect a serious downturn in the next few years, which would make me buy faster.

I've started with:

  • Cromwell Reit (10,000 shares) - not great, but had an 8% yield which is probably sustainable.
  • Netlink Trust (12,000 shares) - low yield, under 6%, but very stable.  I can't see any threat from 5G, and NBAP revenue may grow from IOT.
  • Manulife REIT (6,800 shares) - 6% yield, US economy still looks strong, the main risk is taxation (resolved for now, but always in the background).  Impressive Management.  [Update 21st May: Bought another 7000 shares]
Should give me enough dividends for kopi everyday.

Some REITS I've looked at but haven't bought:
  • IREIT Global main tenant seems to be in long term downsizing.  Too bad, its good otherwise.
  • CapitalMalls Malaysia Trust has reasonable 7% yield, as the Malaysian Retail market is currently oversupplied - could I buy for a cyclical upswing?  I decided not to as 1) The only players that seem to maintain their advantage are the 5 premier malls with 1m+ square feet.  Although CMMT's Penang's Gurney Plaza is good, it is not unbeatable.  2) Small, mixed use malls and individual strata malls are disadvantaged.  So why did CMMT buy Tropicana (mixed use) and Sungei Wang (strata)?  As mall operators they should know these problems, especially as they've seen it play out in SG before.  Why such stupid acquisitions?
  • Singapore Industrial REITS have high yields, but are paying out 100% of their distributable income, even as they have short leases.  So you need to deduct 1 to 3 percent from the yield to get the 'true' long term yield.

I'll look at Frasers Logistics and Industrial Trust next.  Maybe Malaysia later - there may be some lower priced REITS there, as their industrial, office and retail property sectors are in a property glut.


Kyith said...

HI BlackCat, I honestly am looking forward to your acquirers multiple and trend following results for guidance. I would have thought they would have given better results over time.

I think you shared your thoughts on IREIT. Thanks. I will reply you on the FLT part later.

I think you can look at Manulife US REIT to be around 6.04 cents. At 86 cents that should give you 7%.

Best Regards

BlackCat said...

Hi Kyith, Thanks for dropping by. Saw your reply on FLT.

My Acquirers Multiple and Momentum portfolios are down about 2-3% since starting in Feb. Can't win em all. I'm in them to balance out holding a pile of cash - in case the market melts up, like in 1999. Try to be happy no matter what the market does :)

Yes, I have a position in Manulife. Their last acquisition was impressive!

Can't see much out there with a *sustainable* 6% yield now.

All the best

Kyith said...

We can wait. It is usually when I rush around, being forced to make a move that the decision ins more terrible. not a lot locally. expand to HK might have some blue chip that is around 5%.