Home » Dividend Updates » July 2018 Portfolio Update

As a dividend growth investor (DGI), I am driven to keep track of both my inflows and outflows. Increases in investment income represent one measure to assess whether I am winning or losing the game of money. While I have been diligent to track my progress on a quarterly and annual basis over the past few years, through 2018 I have also been providing monthly income updates.

CAD Dividends

CompanyCAD Payments ($)Div Increase (%)
Toronto Dominion Bank (TD)53.60
RioCan Real Estate Investment Trust (REI.UN)31.32
The Coca-Cola Company (KO)68.07
BCE Inc. (BCE)166.10
Canadian Imperial Bank of Commerce (CM)15.96
Bank of Nova Scotia (BNS)65.60
TELUS Corporation (T)36.753.96
Rogers Communications Inc. (RCI.B)26.40
Canadian Pacific Railway Limited (CP)3.9015.56
Chartwell Retirement Residence (CSH.UN)4.90

Dividend Summary

In July, my dividend growth portfolio generated $472.60 CAD. This is a monthly high for me at this stage. It serves as further evidence that my dividend growth strategy continues to win. The snowball of dividend wealth continues to grow in size which only makes it easier to reach new heights as time goes on and these figures are reinvested further into high quality cash flowing equities.

It is worth noting is that I had no income paid in USD this month. This is a side to my portfolio that I would like to focus on at some stage. I live in a city that borders on the U.S. and so someday down the road when I am ready to begin using my dividends rather than reinvesting them, I could see it being useful to having a foreign stream of income to cover incidentals and the odd trip here or there.

Although the period only produced two dividend increases, the +15% boost from CP further demonstrates that this railroad operator is serious about rewarding shareholders. This comes on the heels of a 12.50% increase in 2017 and 42.86% jump in 2016. Having said this, you can also see that I have a relatively minor position in CP. My intention at the time of purchase was to double down if the stock price pulled back. Instead of that, it has risen over 50% since my purchase back in early 2016. On top of that, my dividend yield-on-cost has nearly doubled from 0.86% initially to 1.54% following this raise.

Market Opportunities

While the market remained unremarkable through the month of July, I did find three occasions to put fresh capital to work.

The pullback in BNS from June remained through July. As a result, I added 20 additional shares to my position at ~$75.60 CAD. On the quarterly dividend of $0.82 CAD, this should bring in $16.40 quarterly or $65.60 annually. At this point I consider myself fully weighted positions between my positions in TD, BNS, and CM. While I would not be opposed to adding more in the event of extreme price weakness, I plan to be looking elsewhere as the year wears on to find investment opportunities.

My next purchase came as I added 60 shares of H at a price of ~$19.30 CAD. Despite the company’s virtual monopoly in the Ontario market, the company has been under intense pressure politically. With the election of Ontario’s new Premier in Doug Ford, H’s entire board and CEO have been cleaned out. While in the short term this may be alarming news, I believe long term that the company still has plenty of room to continue raising rates over time and continuing to share profits with shareholders. The 60 shares I added should yield, based on the $0.23 CAD quarterly dividend, $13.80 quarterly or $55.20 annually. I’ve often found myself picking up a company when the headlines are negative and this is no exception.

My final buy for the month came with Brookfield Renewable Partners L.P. (BEP). I initiated a position for 55 shares at a cost of ~$39.60 CAD. While my plan this year was to simply double down on the investments I already owned, I made an exception with BEP. I have been observing and investigating the overall Brookfield infrastructure for the past few years and have decided to dip my toes in at this stage. The company has long term deals in markets around the globe for renewable energy projects which is an area that I only see continuing to grow in importance over the decades to come. Couple that with proven leadership and ability to efficiently deploy capital while still rewarding shareholders, I feel comfortable having BEP in my portfolio.

BEP currently kicks off a ~6.25% dividend yield with plans to grow that distribution by 5% to 9% annually. If they are able to achieve that target, even on the low end, I will be a very satisfied investor over time. Beyond opening my position with 55 shares, I hope to more than double my stake should the market present an opportunity anywhere in the near future with a pullback of 10% or more. I bought BEP on a Canadian exchange and hold it in CAD. As a result, only the $0.49 USD quarterly payment, I roughly (and conservatively) estimate that this buy will bring in ~$35.20 quarterly or $140.40 annually, with the understanding that these totals will fluctuate based on CAD/USD foreign exchange variations.

Based on these three purchases, in total I have added ~$65.40 quarterly or $261.20 annually to my forward dividend income. In aggregate, I have put $4,876.10 CAD to work in high quality dividend payment equities. This continues to build on the momentum I generated over the first half of the year and positions me for a very strong close to 2018.

Cash Cushion

While it is great to put money to work, I also enjoy having a sizeable cash position to buffer against the vicissitudes of life. The amount I’ve invested recently has seen these totals decline marginally despite my bi-weekly contributions. I may well take a breather in August as I build my high-interest savings account back up and scout for market opportunities.

Conclusion

July turned out to be another prolific investing month for me. I invested nearly $5,000 and added over $260 in annual forward dividend income to my portfolio. This amount, of course, will only serve to be reinvested and compounded over time.

Things are looking bright as we move into August. While I would like to build my cash buffer up a bit higher, I remain poised to respond to market opportunities.

Thank you for reading.

Full Disclosure: Long TD, REI.UN, KO, BCE, CM, BNS, T, RCI.B, CP, CSH.UN, H, BEP

2 thoughts on “July 2018 Portfolio Update

  1. Nice job adding over $260 in forward dividend income to help fuel the portfolio.
    Have to like that 15% dividend raise from CP. Many railroads are being generous these days, as I know UNP has raised frequently in the past year, as well as NSC.
    Engineering Dividends recently posted…Monthly Dividend Income (July 2018)My Profile

    1. Hey ED,

      Yeah, the 15% boost is nice. CNR has also been a railroad rewarding shareholders with big boosts.

      The forward income raise came as a bit of a surprise to me as I wasn’t expecting to be investing much through July and then all of a sudden I realized I’d made big strides.

      Take care,
      Ryan

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