Looking for EURO companies with increasing dividend paying stocks

irishnh

Hello, apologies for the beginner post

I am interesting in researching the best EURO stocks, with historically increasing dividend payments over minimum the last 10 years. (I'm stick to euros so I don't have to deal with changing exchange rates)

I found the S&P "Dividend Aristocrats" info, but can't seem to track down an actual list of companies in it.

From a quick check on ISE, I can just see the Kerry Group & Diageo are the only ones with long term increasing dividends over the last 10 years.

Any pointers on where to look for this info would be gratefully appreciated!

Thanks!

robp

irishnh wrote: »

Hello, apologies for the beginner post

I am interesting in researching the best EURO stocks, with historically increasing dividend payments over minimum the last 10 years. (I'm stick to euros so I don't have to deal with changing exchange rates)

I found the S&P "Dividend Aristocrats" info, but can't seem to track down an actual list of companies in it.

From a quick check on ISE, I can just see the Kerry Group & Diageo are the only ones with long term increasing dividends over the last 10 years.

Any pointers on where to look for this info would be gratefully appreciated!

Thanks!

Its straightforward to find this info for the US but not so much for Europe so this blog page should help a lot


Euro Dividend All-Stars - No More Waffles

irishnh

Hi Rob, thanks for that its a great website. Looks like to avoid the extra Euro dividend tax the best options are Ireland (but very few comps in the historically increasing dividend payments over minimum the last 10 years) and the UK which has 0 dividend withholding, but then you're into the currency XE rates.

Easy question for anyone but I'd be hugely indebted Trying to work out the figures on the ISE regarding dividends whcih are making no mathematical sense to me

For example:

GREEN REIT share price now 1.5740 on ISE

GREEN REIT gross dividend paid earlier this year according to ISE: € 0.92

Just wondering whats the correct way to work out dividend yield on this, as I'm pretty sure they didn't pay out over 50% of share price in a dividend payment.


Thanks a TON

robp

irishnh wrote: »

Hi Rob, thanks for that its a great website. Looks like to avoid the extra Euro dividend tax the best options are Ireland (but very few comps in the historically increasing dividend payments over minimum the last 10 years) and the UK which has 0 dividend withholding, but then you're into the currency XE rates.

Easy question for anyone but I'd be hugely indebted Trying to work out the figures on the ISE regarding dividends whcih are making no mathematical sense to me

For example:

GREEN REIT share price now 1.5740 on ISE

GREEN REIT gross dividend paid earlier this year according to ISE: € 0.92

Just wondering whats the correct way to work out dividend yield on this, as I'm pretty sure they didn't pay out over 50% of share price in a dividend payment.


Thanks a TON

I checked and that is 0.92 cent not 0.92 Euro so a 0.59% yield currently. There are not a whole lot of high dividend Irish companies.

newacc2015

robp wrote: »

I checked and that is 0.92 cent not 0.92 Euro so a 0.59% yield currently. There are not a whole lot of high dividend Irish companies.

There isnt a whole load of decent dividends from German companies either. European stocks arent the best for dividends at all compared to the UK companies. Some German banks have ok dividends, but nothing on par with HSBC

Fizman

Are you staying away from US stocks? Thinking of getting some over the coming months myself. The correction over the past few months has made some dividend aristocrats available at decent value. The likes of J+J, ExxonMobil amongst others.

irishnh

From what I understand from robp's link above (thanks a million Robp), only Ireland & UK (for us Irish based people) are the ones were we won't have to pay extra dividend withholding tax, in addition to what we'd normally have to pay being Irish.

Most Euro countries have various levels of withholding % on dividends and while I'd love to invest in USA "Dividend Aristocrats" & REITS USA seems to have dividend withholding tax too (see Robp's link above)

"The United States of America – 15% or 30%. The most capitalistic country of all time withholds 30% on dividends – what? That is if your government hasn’t put a bilateral tax agreement in place, which is the case for almost all Western and Northern European countries. My purchases on the New York Stock Exchange, for example, are immediately subject to a 15% tax rate."

Which leaves the options of Ireland - awful returns on REITS, and if I've calculated it correctly on the only 2 EU "Dividend Aristocrats"

GLANBIA

Share price now: 17.65
Dividends paid in 2014: 10.40
Approx % dividend to get an idea: 1040/176500*100= .59%

KERRY

Share price now: 69.31
Dividends paid in 2014: 41.50
Approx % dividend to get an idea: 4150/693100*100 = .60%

(let me know if I've done the math incorrectly, I'probably have - its a brain teaser at 10pm!).

Which leaves only the UK as an option, with quite a hefty exchange rate. Though possibly one could argue while you are paying in sterling (bad exchange rate) you will be earning the dividend in sterling (good exchange rate back to euros).

Hhhmmm... I assume I've got some of this wrong so do let me know Beginner ramblings

robp

newacc2015 wrote: »

There isnt a whole load of decent dividends from German companies either. European stocks arent the best for dividends at all compared to the UK companies. Some German banks have ok dividends, but nothing on par with HSBC

True. I notice that UK and French markets have big energy companies unlike Germany. It goes to show that even large stock exchanges may not be spread out over the different sectors in an ideal way.

Sonnenblumen

A number of ISE cos eg IFG, ICG pay divids 2.5%+ so why would you buy shares with a yield of 0.5% ?

On the otherhand, there are many very good (& longterm) FTSE shares paying divis 5.% - 6.0%+ (NG, GSK etc) so why would you worry staying within euros? It is also possible to make a little extra on strengthening £ v € ?

irishnh

Sonnenblumen wrote: »

A number of ISE cos eg IFG, ICG pay divids 2.5%+ so why would you buy shares with a yield of 0.5% ?

On the otherhand, there are many very good (& longterm) FTSE shares paying divis 5.% - 6.0%+ (NG, GSK etc) so why would you worry staying within euros? It is also possible to make a little extra on strengthening £ v € ?

Yup ISE won't work so FTSE looks the best from what I can figure.

A question on REITS in the UK - it seems that part of a UK REITS dividend payment is subject to withholding tax ... Is there a way around this for Irish investors? Anyone had experience? Thanks

Sonnenblumen

irishnh wrote: »

Yup ISE won't work so FTSE looks the best from what I can figure.

A question on REITS in the UK - it seems that part of a UK REITS dividend payment is subject to withholding tax ... Is there a way around this for Irish investors? Anyone had experience? Thanks

No and Irish investors are obliged to declare all sources of dividend income (irrespective of market) and usually any tax paid can be used as a credit in calculating Irish tax etc liabilities.

irishnh

Sonnenblumen wrote: »

No and Irish investors are obliged to declare all sources of dividend income (irrespective of market) and usually any tax paid can be used as a credit in calculating Irish tax etc liabilities.

.

Sounds good. Is there any Irish gov site which goes into more info on using dividend tax paid in another country as a credit when calculating Irish tax? Thanks again

draiochtanois

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Fizman

Do I have this correct in relation to US stocks / dividends / taxation for an Irish private investor?


E.g.: I buy 10 shares of Johnson and Johnson at $100 per share. Dividend yield is 3%.

For the year, these 10 shares earn $30 in dividends. Would I be right in saying the US gov keeps 15% of this for themselves ($4.50) and $26.50 lands in Ireland. I then pay 20% of this to the Irish gov ($5.30 / or is it the euro equivalent). So $20.20 makes it's way into my pocket?

draiochtanois

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draiochtanois

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27cyrix

draiochtanois wrote: »

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What exactly do you mean 'set up commissions'?
And why subscribe to FT cloud set off these tax?

I am new to the dividend investing...

draiochtanois

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Fizman

From Gillen Markets website:

Dividends on US Shares
There is a 30% with-holding tax on US shares for non-residents, but if you complete the necessary W8-Ben form, then a lower 15% with-holding tax will apply. Your therefore receive 85% of the dividend. You are assessed on the full 100% and the 15% withheld by the US Revenue is deemed as tax already paid by you in accounting for tax due to the Irish Revenue, and for anyone on a marginal tax rate above 15%, then the balance is due to the Irish Revenue. The 15% US With-holding tax is non-refundable so pension accounts cannot reclaim it.

Unless I'm reading this wrong......the 15 % kept in the US is deemed as tax already paid so only an additional 5% is paid to Irish Revenue (assuming an individual is on an income tax rate of 20%)?

draiochtanois

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Fizman

draiochtanois wrote: »

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Ah ok. The way I read some earlier comments, I had understood it to be 15% paid to the US, and then a further 20% paid when it lands in Ireland (for an individual on the 20% bracket).

I'd feel far more open to US stocks in that case.

This type of market is a dream for those long-term income investors. A lot of value around right now for those with some excess capital to spend towards dollar cost averaging.

Sparky1972

Hi Guys,

I am new to the Investing scene also and am considering US stocks with good dividend return. Ignoring the merits of the Companies being invested in - can you someone advise the whole exchange rate scenario, is now a good time for investing with the EUR/US fx rate. What does it mean for dividend returns and selling the stock down the road.
Bit of insight or examples would be great.
Much appreciated.

draiochtanois

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lcwill

draiochtanois wrote: »

If you are buying large companies with global sales fx will largely be irrelevant to returns over time.

Is this correct? I am trying to build a very simple ETF portfolio and so far have just bought a small amount of Vanguard's global etf VWRL.

However given big changes in the EURUSD exchange rate this year VWRL seems to expose a Eurozone based investor to too much currency risk as it is 50% US and with large amounts of UK, Swiss and other non Euro stocks.

I am now thinking to buy the iShares MSCI Eurozone ETF (EZU) when the Euro is as weak as it is now and buy VWRL only when Euro is stronger, aiming over time for about a 50:50 split between these 2 ETFs.

Any thoughts on this, advice on alternative ETFs, or links to information on the long term effects of currency risk on investment returns for non-US based investors would be very welcome!

marathonic

lcwill wrote: »

I am now thinking to buy the iShares MSCI Eurozone ETF (EZU) when the Euro is as weak as it is now and buy VWRL only when Euro is stronger, aiming over time for about a 50:50 split between these 2 ETFs.

Although I don't like this idea personally, it may suit you. I can see it opening yourself to a lot of second guessing yourself and trading in and out of markets - which opens yourself to significant trading costs and highly complex tax returns.

The thing about exchange rates is that they are a reflection of what the entire market thinks a currency is worth at any point of time. With this in mind, whilst you may think that sterling is 'too high' at the moment, the entire market of currency traders see sterling as perfectly valued. Nobody can say for sure whether sterling will be up, or down, over the next 12 months because if it were a certainty, the currency would already have moved.

You should also bear in mind that, for example, the FTSE 100 companies derive approximately 70% of their income from overseas. That means that, were sterling to plummet, there should be some upward pressure on the price of shares because a lot of their earnings are in euros.

Let's take a hypothetical share called Boards Ltd that is listed on the UK stock market at a price of £1000 and earns £50 and €50. Let's assume that €1 is equal to £1 today. That would give the company earnings of £100 and a P/E of 10.

Now lets say the value of sterling halves over the next year and the company has no earnings growth, i.e. it's still earning £50 in the UK and €50 in Europe. The €50 it earns in Europe is now worth £100 giving the company a total earnings of £150.

In order to maintain the same P/E, with all else being equal, the share price will rise to £1500.

The above sample uses a 50/50 split for ease of calculation. Most big UK-listed shares earn more than 50% of their income in currencies outside the pound.

Taking the above into consideration, you may think that sterling will drop by 10% over the next year. However, even if that were to happen, it doesn't necessarily mean that you lose 10%. In theory, a drop in the value of sterling should lead to an overall increase in value of the shares quoted in sterling if those shares derive a lot of income from overseas.

lcwill

marathonic wrote: »

Although I don't like this idea personally, it may suit you. I can see it opening yourself to a lot of second guessing yourself and trading in and out of markets - which opens yourself to significant trading costs and highly complex tax returns.

Thanks for the feedback, I am still concerned about the currency risk though - essentially what I am suggesting is to build a portfolio of 50% domestic equities (Euro denominated) and 50% international equities (all other currencies) by keeping my purchases roughly balanced between the two over time - rebalancing would be through buying not selling as I am just starting out so these will be held long term.

Isn't the standard advice to have most of your funds invested in your own currency?

Fizman

I think it depends on a number of variables.

If experienced European/Australian/etc based investors were to stick to their own currency, they'd be missing out on all the great US companies out there.

I recently started my own Dividend Growth Portfolio and 5-6 months ago when initially reading up, I thought i'd be sticking with just Euro based stocks for the foreseeable future. I initiated positions in Allianz and Royal Dutch Shell who would be in the Euro dividend champions list, but the more I read up on the DGI strategy in general (idea of buying to hold for a very long period of time and reinvesting dividends), the more exposure to the US market seemed to appeal to me. As of this evening I've got my first US stock in Johnson & Johnson. Rate at the time was €1:$1.1230. If I was looking to be selling in the coming weeks/months then the exchange rate would play a much bigger role, but i hope/intend to hold this for quite a while (all going well maybe never sell and just earn dividends), so the exchange rate shouldn't play as significant a role.

FortySeven

Sorry to butt in on your discussion here but can I ask who you guys are trading with? I researched this a few years ago and could only find brokers with ridiculous transaction fees.

Fizman

I use IG Index, and know a few others on here use them too.

lcwill

FortySeven wrote: »

Sorry to butt in on your discussion here but can I ask who you guys are trading with? I researched this a few years ago and could only find brokers with ridiculous transaction fees.

I actually live in Italy and use Fineco, an Italian bank. E19 to buy, free to sell, no annual fees ( I am only buying and holding at least E5000 blocks of specific ETFs - too expensive to build a diversified portfolio of small amounts of individual stocks or to trade frequently).

Fizman

IG are €10 to buy Eu based or similar stocks, $15 to buy US. I haven't sold yet but I don't think there is a selling fee.

FortySeven

A quick look over and it certainly looks to be reasonable. Can transfer existing holdings from Etrade too. Brilliant. Will have to have a deeper look later but thanks guys.

irishnh

I signed up to IG and talked to a guy there. It doesn't allow you to drop DRIP though (automatic dividend reinvestment program) which would be very handy. Is anyone using one that allows DRIP? thanks!