Dividend Income – April 2017

Dividend Income

Well lads, if you’ve been with me this time around last year, you’d know that April is usually a slow month for me. Dividends last month totaled RM277.20, compared to last year’s RM230.40. Don’t let the small amount fool you, that’s a 20.3% increase in dividends y-o-y. So far, we’ve been seeing big increases (more than 20%) in dividends every month except for March. A very positive and promising sign.

The RM277.20 last month was split between Sunway Berhad (RM268.20) and Sunway Construction Group (RM9.00).

Sunway Berhad

Sunway did something different this time around. They distributed a part of April’s dividends as cold hard cash. The remainder was distributed in the form of shares – 1 share for every 100 shares owned to be precise.

This is a new experience for me and a good one. Let me give a brief explanation why. Education time!

The dividends I received in the form of shares are called treasury shares, which are shares held by Sunway. Companies often repurchase their own shares via the market if they deem the share prices to be undervalued. Share buybacks are really good for shareholders like you and me because essentially, it increases our ownership in the company.

Sunway Berhad 2017 Dividend
Dividends via Treasury Shares

Sunway Berhad 2017 Dividend

Sunway Construction Group

Sunway Construction Group

Acquisitions and Disposals

On 14 April, I made a decision to part with all 33,700 units of my BONIA shares. Including dividends received as well as fees, I made a loss of RM3,811.67 (-14.12%). Painful but it had to be done. BONIA had been hit by GST but looking at other retailers, it doesn’t look like the company has a good handle on the problem. I’ll, of course, be keeping an eye on them should their earnings show signs of improvement.

With BONIA disposed of,  I had about RM22,000 in reserves. Scientex took a tumble recently due to a private placement (priced at RM7.80 if my memory serves). At the time of the placement, Scientex’s shares were at an all-time high of more than RM9 per share. It has since dropped to around RM8.20 – RM8.30 today. I snapped up 1,600 shares at RM8.26 on 2 May 2017. My latest valuation of the company – even after stripping the company, it is still worth RM220 million easily.

Conclusion

Summing it all up – I brought home a total of RM277.20 in dividends (both in the form of shares and cash). Dividend yield for my Freedom Fund increased to 1.23% from 1.19% a month ago.

I should be attending AirAsia’s AGM later this month on the 25th. If any of you are going, drop me a message or comment, maybe we can carpool! Come back in a few days for my article on Nestle’s doorgift. Hint: It was a disaster.

As always, thank you all for reading. Hope you liked the all-new Iron Man.

14 thoughts on “Dividend Income – April 2017

  1. Hi Divvy,

    I’m interested to know how does your valuation of RM220mil for Scientex correlates with the share price i.e what makes you think it is a worthy buy at RM8.26? Sincerely wanting to know more on valuating companies, thanks!

    • Hey Numan,

      RM220m would be their cash left, not the value of the company. As per my usual rule, I don’t intend to teach or tell everyone how to value their companies. There are a 101 ways to do that and you’ll have to figure out which one works for you. =D

      Scientex has gone up to RM8.50 btw yesterday!

  2. Hi there, first of all thank you for sharing your knowledge. Im a newbie and i’ve just started investing not too long ago. I have been following nestle stock recently and i am quite keen to buy but do u think it is too late to buy now since the price is so high?

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