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Saturday, May 21, 2022

This Dividend Stock Just Paid Me $36.37 in Dividends

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It is now more common for a dividend stock to pay me between €30 and €40 in dividends, often even quarterly. That’s the beauty of a growing portfolio: investment income just grows over time.

The dividend stock, which has now paid me a dividend of €36.37, is something special. It is an annual payment, which basically indicates a smaller position. However, sooner or later it can become more. Although I can say one thing: I am not planning any more investments at the moment.

The dividend stock that paid me €36.37 in dividends

Not wanting to leave you in the dark, said dividend stock is bb biotech (WKN: A0NFN3), from which I have now received a dividend of €36.37. Gross was almost 56 euros, but the withholding tax hits big. This means that more than a third is gone at the moment. But that is something I have consciously accepted because there is more to it than just payment.

BB Biotech is a pretty special stock. The management of the Swiss investment company invests in interesting companies in the field of biotechnology and thus assembles a diversified but concentrated portfolio. In the long run, it’s about generating solid returns through innovation, which is a pretty smart approach to returns.

The whole point of dividend stocks is that management pays 5% to investors at a time. The reference value for this is the average price for December of the respective previous year. That may involve fluctuating distributions. However, if the value of the investments and the portfolio increases gradually, the dividend will also increase in the long run. The previous dividend of €36.37 in 2022 may therefore be significantly higher in five to ten years if the stock and the investment team continue to be successful.

That’s why I won’t buy any more.

Despite this, I will no longer buy from BB Biotech. I like dividend stocks and the prospect that the dividend can continue to rise steadily. However, a core issue for me is that Swiss equities tend to be difficult to trade. I basically follow a buy and hold approach, which can offset some of this uncertainty. However, in case of doubt, I would like to be able to divest or continue to buy individual shares without problems or special requirements.

In this sense, there is a solid investment thesis. And also the prospect of a dividend of more than EUR 36.37. But BB Biotech needs to create a growing improvised passive income, if any. By the way: Just because I wouldn’t buy more doesn’t mean I want to sell my stock. As I said, the business-oriented investment thesis still stands.

The article This Dividend Stock Just Paid Me $36.37 Dividend first appeared in The Motley Fool Germany.

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Vincent owns shares of BB Biotech. The Motley Fool does not own any of the shares mentioned.

Motley Fool Germany 2022

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