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Wilmar Int'l: Record dividend! VICOM steady pom pi pi!

Thursday, February 23, 2023

2023 started out well for my investment portfolio with Volare Group offering to buy units in one of my largest investments, Sabana REIT, for 46.5c a unit in January.

As my investment in Sabana REIT is made up mostly of units bought in December 2020 and January 2021 at around 35c a unit, the offer was good news to me.

I last blogged about this just a few days ago:

Sabana REIT: Sell at 46.5c a unit to Volare Group?

Then, earlier this month in February, DBS announced stellar results and higher dividend.

A special dividend of 50c a share was also declared and because DBS is one of my largest investments, larger, in fact, than my investment in Sabana REIT by a good measure, it was fantastic news to me.

It will have a relatively significant impact on my quarterly passive income.

That led me to wonder if OCBC and UOB might do the same as their results are expected to be relatively robust too.

OCBC and UOB to follow DBS with special dividends?

Still luxuriating in the news of a rather generous special dividend from DBS, I read that Wilmar International has declared a final DPS or dividend per share of 11c.

Together with the 6c interim dividend paid earlier, total dividend is 17c per share which is a record for Wilmar International!

As one of my largest investments, Wilmar International is in the same bracket as DBS and UOB in my investment portfolio.

Largest investments updated (4Q 2022.)

Good news all around!

Although I am telling myself don't let it go to my head, I am feeling a little giddy, to be quite honest.

I have to be careful because I tend to make mistakes when I am feeling high.

I know this for a fact because it has happened a few times before.

Making mistakes when I am on medication is unfortunate but making mistake when I am feeling high is shameful.

I already gave myself a little treat when DBS announced its special dividend.

I think it is OK to give myself another little treat.

Must be nicer to myself.

Wilmar International and our local lenders are all cyclical businesses and the weather isn't always going to be sunny.

I am not being a wet blanket.

It is just the hard truth.

So, socking away a big chunk of the bumper dividends in preparation for rainy days is the sensible thing to do.

I alluded to this when I shared my 2022 full year passive income at the beginning of this year.

This is not being pessimistic.

It is just being pragmatic.

Passive income: More resilience.

Still, rain or shine, I expect Wilmar International and our local lenders to continue to bring home the bacon for many more years to come.

I also remind myself that I have not always been right and that I have been wrong too.

I have also said many times that as long as I am right more often than I am wrong, I should do well enough.

Peter Lynch famously said that if we can be right 6 times out of 10 when investing our money, we are not doing too badly.

However, I should also say that unlike Warren Buffett who has money pouring in constantly so that he can invest and compensate for mistakes, we don't have that luxury.

So, by socking away cash whenever we get a boost in passive income allows us to do a mini mimicry of Warren Buffett's cashflow which will allow us to compensate for mistakes more easily.

Of course, if you are someone who is able to mimic Warren Buffett's cashflow without having to do what I do, then, good on you!

If you are a new reader or cannot remember, I blogged about this in 2014:

How to make recovering from investment losses easier?

Moving on to VICOM which reported higher earnings and declared a final DPS of 3.32c, long time regular readers know that this is one of my larger smaller investments.

This means that the position is larger than $50,000 but smaller than $100,000 in market value.

Unlike its parent, ComfortDelgro, the price of VICOM's common stock is very much above my buy price since I added it to my investment portfolio in 2015.

I would say that VICOM is similar to ST Engineering, another one of my larger smaller investments, in the way that a big portion of its income is assured because of our government.

Just like ST Engineering, VICOM also pays out 90% of its earnings as dividends.

Not an exciting investment but a steady one for income, I expect it to continue paying for my car inspections (and more, of course.)

VICOM steady pom pi pi!

Very apt Singlish phrase if we were to imagine cars honking.

I think I have rambled long enough in this blog.

To all fellow Wilmar International, DBS and VICOM shareholders, congratulations and huat ah!

1. Accumulating Wilmar.
2. Wilmar: Free stuff...


AK71 said...

UOB declares higher final dividend of 75c per share on record high earnings of $4.57 billion.


Yv said...

Hi AK,

I wonder what was the "little" treat you gave yourself when DBS declared the special dividend.
Pretty happy with UOB announcement. You giving yourselves more treats?

I am looking forward to OCBC's.

AK71 said...

Hi Yv,

These days, I tell people if they want to buy me gifts, make sure it is food or supermarket vouchers.

I don't want more clutter in my life.

So, when I give myself a treat, usually, it means something edible. ;p

VT said...

Hi AK,
Congrats on Wilmar!
Btw, given the escalating issues in Europe/Ukraine/Russia, we're seeing IReit tracing down to its previous low again...
Any thoughts on that?
Thank you and enjoy your Swensens!

AK71 said...

Hi Vincent,

Thank you plenty plenty.

Alamak, I have not been to Swensen in many years after two bad experiences.

These days, I buy ice cream from Fairprice and eat at home. ;p

I will be publishing a blog on IREIT Global's latest results soon. :)

SN said...

Hi AK,

With UOB's earnings announcement, their annual dividend should be $1.50 per share. At today's closing price of $29.62, dividend yield is 5.06%, which is currently the highest among the three banks. Will you therefore consider adding more shares given the attractive yield?

Despite record earnings, UOB dropped 4.42%, similar to DBS last week dropping upon earnings results. Market seems to have reacted negatively to the banks' record earnings, possibly signalling the peak of the bank cycle.

DBS dividend yield of 4.89% is also quite attractive (annually $1.68/share excluding the $0.50 special dividend), although it's book value is higher than UOB. So at current prices, UOB seems to offer better value in terms of both dividend yield and book value.

AK71 said...

Hi SN,

My war chest is empty. (TmT)

I last added to my investment in UOB at around $26 a share in October last year, increasing my exposure to the local lender by some 19%.

So, even if I had the money, I am not too enthusiastic about the current price offered by Mr. Market.

Looking at the chart, UOB should see stronger support at $28.90 which is where the 200 days exponential moving average is at.

If that should break, then, price could fall to test a band of support at between $28.40 to $28.50.

Despite the selling, UOB is far from oversold and momentum is still in positive territory.

I would be more comfortable buying when Mr. Market is feeling more pessimistic which was the case in October last year.

When compared to DBS, I agree that UOB offers more value for money. :)

Betta man said...

Hi AK,

Can you talk to yourself on Hock Lian Seng's result too ? Thank you.

AK71 said...

Hi Betta man,

Hock Lian Seng is a boring but solid business. ;)

Strong balance sheet, rising NAV and a reasonably attractive dividend now that we have emerged from the pandemic.

It is currently trading at a 35% discount to NAV and has a dividend yield of 4.2% which is pretty good.

Things should pick up as economies in the region recover.

The last time I blogged about Hock Lian Seng was in 2021 and I said:

"Hock Lian Seng has a conservative management that is unlikely to create any excitement ...

"... for anyone who believes that the construction sector will recover once we have a handle on the COVID-19 situation."

4Q 2020 passive income.

JiakBaVehFree said...

Hi AK, can share some mistakes you made in investing?

AK71 said...

Hi JiakBaVehFree,

Here you go:

$100,000 lesson from Marco Polo Marine.

My largest loss ever.

Very hard to forget.

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