5-Bullet Sunday – #27

Same shit, different week ๐Ÿ˜œ

Work keeps me busy, nothing new there!

The good thing is that I got to spend some time on this blog, so I created an infographic about the Noble 30 Index , added two gSheet templates and we published our latest Podcast yesterday.

Having said that, enjoy this weekโ€™s 5-Bullet Sunday!

5-Bullet Sunday is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of earlier posts can be found here

๐ŸŒŸ New Portfolio Position

Surprise! I’ve bought some AT&T ($T) this week at $29.78 per share. This is a new position for me and something that I didn’t expect myself if you would’ve asked me few weeks ago.

The reason for that thinking was their enormous debt load in combination with their Time Warner acquisition. I personally thought that it was wrong to go so much in debt and I didn’t believe that the board of directors would have a lot of focus paying it of quickly.

So what has changed? Well, just the numbers!

Dividend Wave shared a one-slider about the company including a link to their latest earnings report. I decided to have a look at it again and I found a lot of positive aspects in it which effectively made me rethink my thesis about the company.

As an example, the company is really focused on paying down their debt while at the same time ensure a healthy and growing dividend.

AT&T Q4 2019 Earnings Report

I also like that they want to keep their dividend payout ratio under 50%. This should give it ample room for dividend increases while they’re focused on paying down the debt.

The same Q4 report as above.

More recently they have also decided to suspend their buyback program. Off course, this is due to covid-19 and the financial uncertainty related to it, but I do like that they have the right priorities: 1. Debt, 2. Dividend

A cautionary note though: I still don’t believe that Time Warner was a great acquisition. Time will tell if HBO MAX will make the impact that they are envisioning. I think it’s just hard to beat Netflix and Disney+ so the question will rather be if there’s enough money left in the wallets of consumers to pay additionally for AT&T’s streaming service. First subscriber sign-ups seem to be underwhelming.

Having said all of that, I find AT&T an interesting high-yield stock as long as the board of directors keeps having a strong capital allocation discipline. The company currently yields 6,91% and has grown their dividends for 36 years.

I purchased 50 shares and I aim to keep it a small tier-4 position.

๐ŸŒŸ Unemployment numbers EU vs US

I touched upon this as well in our most recent podcast, because I had this very interesting observation about the unemployment numbers.

Did you know that the European Unemployment numbers are far more better than the US unemployment numbers?

I honestly didn’t realise that until it occured to me last Friday. Somewhere mid-week I read that the unemployment numbers in Europe came in at 7.4%. Just look at the chart below and you can see that this doesn’t even come close by the peak we had back in 2013 in the aftermath of the Great Recession and the Greek Debt crisis.

Relatively good isn’t it? Especially knowing that we have seen an enormous contraction in GDP numbers since the start of the pandemic which even beats the Great Recession.

And then last Friday came the US numbers with a whopping 11.1% unemployment rate. Down from 14% just two months ago, but have a look at the spike below. It’s really incredible this spike and something never seen before in our lifetimes.

Now what does this tell me?

It’s actually just a realization to me that in the US companies can much easier let go of people compared to Europe. This is not something new to me, but for the first time I can clearly see the impact of it when comparing the US and the EU with each other.

I know from experience that my colleagues often look at the EU as a region driven by socialism and some would even say communism (wrongly so and for that we have dictionaries and history books ;-)). But in these times I am just proud to live in a European society where we generally prioritize people over companies.

Yes, this comes at a cost in the form of higher taxes and less flexibility for companies in difficult times, but in the end I believe that this system is an essential part of why European Countries and cities rank the highest in the global happiness index.

It’s not the stock market that matters, it’s quality of life.

Income security in case of unemployment plays a strong role in determining life satisfaction, as both unemployment and fear of unemployment strongly affect quality of life.

Frank Martela – World Happiness Report

๐ŸŒŸ Vacation vs Covid-19

Vacation is starting in most of our countries and the EU has opened its borders again for each other.

This is good news for us, especially for the people that really need to escape their environment to get a mental break from work and recharge their batteries again.

My recommendation:

  • Chose a destination which is considered “covid-19 safe” ๐Ÿ‘‡
  • Avoid crowded places like parks and tourist hot-spots
  • Keep social distance
  • Wear a mask when you can’t keep social distance

How would you know if a destination is safe enough to consider?

I would just recommend to check out the World Health Organization’s Covid-19 dashboard and visit the country-specific page.

As an example: I just love visiting Croatia. It’s a great place with a beautiful coast line and very child-friendly beaches. The below chart gives me confidence that the virus is under control there, but that I need to to keep an eye on it at the same time. More recently there has been a small uptick in cases.

Good luck with your vacation plans.:-)

Personally we will visit some family during our vacation, because we hadn’t had this opportunity earlier in the year. Hence a “staycation”.

๐ŸŒŸ Recommended Reads

This week I’m recommending as inspiration some stock analysis from fellow bloggers.

๐Ÿ‘‰ Engineer My Freedom did an analysis on Omnicom Group.
๐Ÿ‘‰ Dividends4Life wrote an analysis about the Clorox Company
๐Ÿ‘‰ Just-Dividends published an analysis about Canadian National Railway

These are three companies which you wouldn’t really see me writing about, so I thought that it would be worth sharing with you.

๐ŸŒŸ Recommended Video

I think we’ve all seen those “guru’s” on YouTube and other social media channels. My thoughts about them: Don’t fall for their traps. In the end their trying to make money of you in a not always so ethical way.

Having said that, I believe that the below video explains their tactics very well.

This was it for the week and I hope that you enjoy these posts just as much as I like writing them ๐Ÿค—

Have a good remainder of the Sunday!

Yours Truly,

European Dividend Growth Investor


Iโ€™m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. Iโ€™m not a finance professional through formal education. Iโ€™m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I canโ€™t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

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