What’s a value investor doing, blogging about dividends! That’s a question I don’t really have the answer to, except that I know that I want the option to cease and re-enter work as and when I please well before the official retirement age of 67. Dividends after all, are a part of value – for some value investors, they’re the only part of the cashflow to investors that counts.
August was the first Dividend Income month since starting my portfolio in April.
I received income from one company (RKN:AU), by way of a dividend in-specie, i.e. paid shares of GetBusy Plc, which listed on the London Stock Exchange, Alternative Investments Market (AIM) in lieu of cash.
GetBusy is essentially Reckon’s Document Management Business, now de-merged. The result is my portfolio holds GetBusy shares. I would have preferred an option for cash and don’t believe this was a shareholder friendly decision by management, mainly because the GetBusy shares are very difficult to own for Australian investors; just take a look at your brokerage account to see if it offers access to the AIM of the London Stock Exchange. If I ever want to sell these shares, I’ll need to open an account with Interactive Brokers, or find a Full Services Broker in Oz (if you know of a common Australian online broker with access to the LSE AIM please let me know).
Dividend Income: $192.80.
Yield on Cost: 9.20%.
This is a nice yield for my ever first dividend! 🙂
The de-merger changes the value of the underlying business too, as a result RKN trades at a lower price than before the dividend reflecting the lost earnings/revenue. I’m yet to get a re-estimate of value I’m confident in, but I think the market has sold Reckon down hard. Management said the demerger should free up cashflow for the remaining entity and allow the Document Management Business to be more accurately valued by the market (I’m skeptical).
I like to have dividends paid in cash, so I can direct where and when the funds are put to use. That’s not the case for this month’s payout, so for now I’ll just tuck the GetBusy shares in my back-pocket and get on with life.
What was your August dividend harvest like?