9 dividend-paying stocks buy-worthy

Aedifica is a Real Estate Investment Trust (REIT) or in Belgian legislation terms, a Geregelementeerd VastgoedVenootschap (GVV). Thanks to this they have to adhere to certain regulations when it comes to structure and dividend payment.

• Accounting: a REIT may not invest more than 20% of its consolidated assets in the real estate that forms a single real estate entity.
• Appreciation: real estate is valued quarterly at fair value by a valuation expert; it is recorded in the balance sheet at this valuation. The buildings are not depreciated.
• Results: at least 80% of the profit must be turned over to the shareholders.
• Specifically for Aedifica in terms of taxes: the withholding tax on dividends is 15%.

The main benefit of AED is that it focusses on healthcare real estate. With an evergrowing elder population, more retirement homes are needed. There is a risk in the future that there might come an oversupply but it’s not so easy to build new homes. Maybe the biggest concern is the surplus on the intrinsic value, this is a hefty 42% and the dividend yield is a bit lower than normal for REITs at 3.30% but as mentioned earlier the taxes on it are only half.

Just like WDP further down in the list, I’ll start out small at first and add on every dip.

SPYW is a very strong dividend ETF and would be my first dividend paying stock purchase if weren’t for the fact that trackers are excluded from the tax benefit. Morningstar Analysis gave it a bronze analyst rating. In the analyst report, we can read they believe it’s a competitively priced income ETF with a solid track record will continue beating its Morningstar Category peers over the long term.

SPDR S&P Euro Dividend Aristocrats represents a portfolio of 40 high-yielding eurozone companies that have raised or maintained their dividends for a period of at least 10 years. Holdings are then weighted by dividend yield. While there is a lack of profitability and solvency screens ensuring the sustainability of the dividend payments going forward, we view positively the diversification mechanisms put in place. Constituent and sector weightings are capped at 5% and 30%, respectively.

It also has a decent running cost of 0.30%, which is lower than it’s direct competitor IDVY who sits at 0.40%. SPYW only pays out half-yearly which is good since it limits the withholding tax of 30% I have to pay.

There really isn’t a whole lot to fault this fund and with the recent sell-off, now would be the perfect opportunity to buy some shares.

Warehouse De Pauw is, like Aedifica, a  REIT and has the same rules and regulations applied to it. Of course, the way they handle their estate is different as WDP focuses on the industrial warehouse market.
However, thanks to these regulations this REIT is a very good dividend payer at a solid 4.2%. The biggest downside this stock has at the moment is the premium you pay. While it currently dropped a bit, WDP sits -7,58% below it’s high of 2018, at this high it was 54% above intrinsic value (the buildings they own), the so-called EPRA-value.

There really isn’t much to fault WDP except for its high cost to purchase. I’ll probably enter a smaller first position soon and see how it goes from there.

Gimv is a Belgian investment company with experience in private equity and venture capital. The company was founded on February 25, 1980, by The Flemish government at the time, and is lead by CEO Koen Dejonckheere. It’s main four investment platforms are: Connected Consumer, Health & Care, Smart Industries and Sustainable Cities.

Gimv is listed on Euronext Brussels and manages around 1.6 billion EUR invested in about 50 portfolio companies. Gimv is a major player in the Belgian and northwest European eco-system. The additional benefit is that the majority of these 50-ish companies are unlisted. By getting Gimv I’m able to invest in companies I normally can’t invest in.

The company is my top pick because the gross yield is a healthy (estimated) 4.88% for 2019. On top of that, the P/E ratio is decent at 11.00. It also retraced 19.79% from its most recent top of 56.48 EUR this makes that it can be bought 4.7% below it’s intrinsic value.

Source: https://en.wikipedia.org/wiki/Gimv

The IPRP tracker provides exposure to continental European REITs. Despite the word “European” in its name, the fund excludes UK listed equities. Though this will actually be correct very soon (normally as of 29/03/2019).
While the exclusion of UK holdings means that fund performance may deviate from other similar trackers (i.e., XDER). Morningstar awarded this fund an analyst rating of bronze.
I might consider the alternative that also invests in the UK given it’s lower expense ratio. Their performance is almost equal.

Just like Gimv or WDP, Solvay is another Belgian company. They are a chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels.

VHYL is a fund that seeks to track the performance of the FTSE All-World High Dividend Yield Index, an index of common stocks of companies, excluding real estate trusts, in developed and emerging markets that pay dividends that are generally higher than average.
With an expense ratio of 0,29%, it’s a cheap tracker which puts it higher on my to purchase list.

Another GVV! Makes sense I guess since they offer a nice dividend yield. Lease Invest sits at a solid 5.80% and like most Belgian companies pay it in May.

UPVLD is one of the lower priority purchases that I have planned due to various reasons:

• Short track-record: it’s only been around since August 2015.
• Small fund size: at 18 million it’s not very big and thus might face liquidation in the (near) future.
• Small dividend yield: Its most recent dividend was 0.22 USD which at current valuation is just 1.17%.

It does offer some diversification in my dividend portfolio because it mainly invests in US large and mid-cap stocks which are contained in the MSCI USA Prime Value index. Its expense ratio is also low at just 0.25%.