A new buy for my Vrijheid Fonds, I added some extra NN Group.
In March and the beginning of April of this year, the financial markets have been going down due to the Corona virus and oil war. This gave some nice buying opportunities and we saw some great companies attractively priced. And yes, I had some money left to invest.
I had my mind set on some extra exposure in the financial sector. I did some research and I decided to average down of NN Group NV.On March 27th, The European Central Bank (ECB) asked European banks to stop paying dividends and buy back their own shares for the time being. And NN group have scheduled the release of their annual report on March 30th. So, before buying these shares I wanted to wait for the annual report.
I wanted to know what NN group was intended to do. In one of their reports (NN Bank 2019, the Dutch version) I have read that they were going to suspend their final dividend 2019. I have not found this in the English version. And also, none of the experts on the internet wrote anything about it. This left me doubting.
I decided to wait just a few days, and on April 6th NN Group (NN) announced that it will act in accordance with the recommendations of EIOPA and the Dutch Central Bank (DNB) published on 2 April 2020, which urge insurers to temporarily suspend their dividend distributions and share buyback programmes as a consequence of the COVID-19 pandemic.
In their press release, David Knibbe, CEO of NN Group wrote:
‘The situation surrounding the COVID-19 pandemic continues to develop rapidly. At NN, we are doing all we can to safeguard the wellbeing of our colleagues, customers, and the wider communities in which we live and work. Despite the fact that so far we have witnessed no major direct impact on our operations and that NN is well capitalised, we decided to comply with the recommendations of the insurance regulators given the extraordinary circumstances of the current crisis. As we also recognise the importance of capital returns to shareholders, it is our intention to make this distribution and resume the share buyback later this year, depending on COVID-19 developments. At the same time, we will continue to support our customers and society in this challenging environment.’
This press release gave me enough confidence to proceed to buy additional shares. You all know that I’m in it for the long run. Their strong liquidity position, together with the intention to pay the dividend later on this year, made me pull my buy trigger. So, I have bought some additional shares of NN Group NV (XAMS:NN)
On April 6th I bought 55 additional shares of NN Group NV at €23.84 per share (incl. fees).
In this post I assume that NN group will pay the total dividend at the end of 2020. Then with this buy I added a little bit more than €100 (after taxes) of projected dividend to my Vrijheid Fonds for 2020. Now I own 124 shares of NN, and this position produces € 227 ($249) after taxes in dividend income annually.
Again, a small step in my journey and one-step closer to my goal.
What do you think about my recent stock purchase? And what do you think about their dividend? Will NN Group pay the total dividend in the second have of 2020? I like to hear from you.
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