Meridian Energy Dividend Pay Day!
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On the 13th of April I received an email telling me I had just received some moolah. Calm down, it is not the lottery getting in touch but instead:
Your Meridian Energy Limited Dividend
Meridian Energy's interim and special dividends for the six months ending 31 December 2016. Your electronic payment advice is now available for you to view.
Yippee, great timing! At the time I was just packing the car up to head away for five days over Easter, a bit of spending money would be great. I logged onto Computershare where information about my shares is held and found my latest statement for Meridian.
I bought shares in Meridian when they were first publicly offered in late 2013. I recall it being quite nerve wracking at the time as it was a leap into the unknown. Remember when Prime Minister of the time John Key thought it would be good for “Mum and Dad investors” to have a go at the share market under the guise of selling off state owned enterprises? Well, we chose to get involved and stumped up with just over $9,000 to buy shares.
I ended up with 6,100 shares in total. And the example above shows that for each share I own I will receive 7.77 cents (5.33 c + 2.44 c). Out of interest you might be interested to know that the current share price is $2.78 and I have $16K or so invested. NOT quite at the league of Apple shares which are at $144 USD... (remember you can easily check out share prices at www.simplywall.st)
When the months of April and October roll around I get an email like the one above. In the last 12 months I have received $950 in dividends (after tax). I’m pretty happy with that. Because I own a tiny slice of their business I get to share in the profits and judging from what the CEO is saying, the business is doing OK.
RNZ interviewed CEO Mark Binns and he put their 20% rise in profit down to higher sales and margins and getting better average pricing in Australia than NZ at the moment. "The contribution of our Australian business was significant, with energy margin 43 percent higher than last year with Powershop Australia sales, generation volumes and prices all higher."
Meridian increased its dividend and also declared a special dividend. Looking forward they see opportunities over there with renewable energy, particularly more wind and solar. The wet weather over here has worked in their favour as well (because they operate hydro remember).
A fellow investor I know likes to buy shares in individual companies. She only owns one Index fund and that is an Asian fund. Otherwise she gets a lot of enjoyment out of researching a company and then buying in when she feels the price is right. She buys into about nine different areas such as: Retirement villages, credit lending, pharmaceutical, mining, technology and retail based companies. Once she has purchased shares she only checks back every once in awhile to see how they perform and she rarely sells. Her depth of understanding what she has invested in and her diversification in choosing shares impresses me!
Meridian Energy is the only company I have invested into directly (as I’m headed down the Index Fund route instead) and I generally always reinvest any dividend or interest payout but this one was the exception. This dividend payout went towards buying fuel, some mighty fine dumplings for lunch in Christchurch, a new mascara, clothes for our daughter and a few beers for Mr Happy Saver. It is not a big sum but receiving $950 in a 12 month period which did not involve either of us having to head out to work is a big deal none the less. It is usually diverted straight off into savings where I add it to the pot and let compound interest work its special magic. Drip. Drip. Drip. It all adds up over time.
This investment has been working for us now since 2013 and apart from this dividend payout every other one has been reinvested so that it can continue compounding for years to come. I took a leap of faith when we got involved but I’m pleased I did. And this is the point I was always trying to get to when we had debt. After enduring years of seemingly endless payments to National Bank/ANZ I imagined a future where the money flowed into my account instead of out (and no I have not been reading The Secret!) For those of you still in the trenches, grinding away at your debt, stick with it and imagine yourself a few years into the future where outgoing interest payments cease and incoming dividend payments begin instead.
THAT is financial freedom and it feels freaking awesome!