Dividends for financial independence

Dividends for mine holdings:

Investment	Per share, USD	After taxes, in EUR	Annual dividends , % at purchased price	Annual dividends at current price %
Vanguard Energy ETF	2.194	423.86	2.3	1.5
Vanguard S&P 500 ETF**	3.13	210.97	2.2	1.7
Company stocks*	1.75	375*	4.8	4.2
Gazprom	0.42	6,400	5.1	5
Rosneft	0.37	490	5.2	5.3

* Has a tax effective reinvestment policy, where all dividends reinvested straight away avoiding income taxation. Only capital tax is paid once they are sold, however option exists to start receiving dividends only at some point in time.

** I bought Vanguard ETF S&P back in April 2013 and the ETF pays dividends quarterly.

To get annual figure I took dividends for quarter one 2014.

Cost of assets (most of them bought in 2013, or price in January 2013).

Investment	Actual cost, USD	Current price, USD
Vanguard Energy ETF	96	142
Vanguard S&P 500 ETF	142.6	181
Company stocks*	36	41.7
Gazprom	8.2	8.3
Rosneft	7.1	7.0

          As you could see current “bull market” is not supported by the companies performance. Of course, many companies assess themselves against total return, which includes rise in the share prices.

         Gain in the share price is a reliable metric for growth companies (when all the earnings reinvested) or when the dividends could keep proportionate to the share price rise.

         Now S&P 500 & Energy ETF are not attractive enough to invest in them. S&P500 now trading at 18 times its estimated earnings over the next 12 months, the market is regarded as being vulnerable to a correction should the rosy outlook of analysts fail to materialise.

          Forward price-to-earnings ratio above both the five- and 10-year averages of 13.3 and 13.8 times respectively means “one could argue that the index may now be overvalued”.   Of course, with manipulation of sovereign credit ratings many institutions are limited in what they can invest. Hence there is irrational investment in the S&P500.  The capital gain on the shares /stocks it is not a true measure, as volatility is very high.

        Until performance of S&P 500 improves in terms of dividends, I will look elsewhere to re-invest my $ 10 K USD, received as dividends.