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The insurance company Aviva have today released their final results for 2016, and I love the opening statement
“Aviva’s results are simple and clear cut: more operating profit, more capital, more cash, more dividend. And there is more to come.”
The report then went on to report that operating profit was up 12%, and their total dividend for the year was up by the same amount. The real potential icing on the cake was the statement
Image courtesy of Gualberto107 / FreeDigitalPhotos.net
It’s one of my favourite blog topics today, and that is to write an update on the dividends I received in February. With increases from all the companies (ranging from 10% by Vodafone to only 1% for United Utilities) I received the sum of £510.20
The details of dividends received are contained in the table below.
My dividend income in January was a total of £540.64, which was made up of £381.45 from my SIPP and £159.19 from my ISA, this is an increase of £13.80 from January 2016. This is a disappointing 2.62% increase as Amec Foster Wheeler cut their dividend, but this is still more than inflation over this period, and it is possible that they will grow their dividend again as they start to benefit from the rise in the oil price, which is one of their key markets.
The details of dividends received in January are shown in the table below:
BAE Systems announced their year end results on Thursday, which showed an increase in orders received and order backlog, plus an increase in Operating Profit (on a constant currency basis). The important bit from my point of view is that they also increased their dividend, which although this was only by 2%, it is still an increase.
As a result of this dividend increase I have effectively received this pay rise without having to expend any effort, or having to turn up in one place each workday, so as a result I have received £470 in dividends in the last twelve months, and if they match the 2% rise next year I will receive nearly £480 in dividends.
Although this increase is not a huge increase, there are companies who are raising their dividends significantly (see post on BHP Billiton’s increase), so overall I should receive total increases that beat inflation.
In addition to the dividend increase, the share price of BAE Systems has increased by around 25% in the last 12 months, which as I am approaching the time when I will be taking cash out of my FIRE Engine will increase either the amount I can withdraw each year, or the length of time before I will have used up all of the value of my FIRE Engine.
BHP Billiton have today announced their 2017 Interim Dividend at 40cents per share, which is a massive 150% increase from last year’s 16cents. The increase is due to the improved profitability as a result of the increase in commodity prices that has been experienced over the last year or so.
Although the increase is obviously welcome it is still less than the dividends paid in 2014 and before, but profits have not yet returned to the levels they were at that time. However, if the 40cents was repeated in the final results, the dividend yield would be around 4.5% in sterling terms (based on a $1.25 to £1 exchange rate), which is well above the FTSE average.
When Mrs FIUK and I finish work, we will need to provide an income to pay our bills from our investments. As there is not enough in our SIPP and ISA to cover these costs from dividends / investment growth alone until we are receiving our state and final salary pensions, we will need to gradually reduce the value of our investments.
We have therefore calculated the drawdown of our SIPP/ISA to ensure that we should not use up our investments before we receive our pensions.
Based on the current position, our investments when we finish work should be:
Value of SIPP, ISA and Company Pension £261,5001
Cash available £21,000
Value of Company Shares £17,500
1 includes payments into my SIPP and ISA up to June 2017 as finishing work in June means we will be able to receive a rebate of the tax on our earnings of approximately £2,500.
I haven’t posted anything for such a long time as I didn’t feel I had much to say other than monthly dividend reports, new purchases etc.
Now however, Mrs FIUK and I will be stopping work this year and living off of our SIPP / ISA until our final salary pensions and state pensions kick in, so I thought that I would resume posting in the lead up to this exciting moment and report on how I have calculated that we can live without salaries. Once we are no longer working I will also be able to show what can (or can’t) be achieved with regard to leaving work early without a huge pension pot (I define huge as above £500,000 as this would provide £20,000 per year with a withdrawal rate of 4%). Continue reading
Image courtesy of Gualberto107 / FreeDigitalPhotos.net
As I didn’t update my dividend income for November, I thought I would do this with this end of year dividend update, to show how my dividend income is generally on an upward trend.
Happy New Year to everyone, I hope you had a great 2015, and that you have a happy and prosperous 2016.
I passed some important milestones in 2015, which saw my dividend income pass £6,000 for the year, and I also took the value of my FIRE Engine past £200,000. The most important milestone to me though, as my figures show I should reach Financial Independence in 2017, is that I can now say that I will be finishing work next year.
It’s the beginning of a new month again, and it is time to write about one of the most enjoyable experiences of investing, and that is dividends.
I have had my third consecutive month of receiving over £500.00 from my shareholdings, and have received an increase of 132% compared to November. Continue reading