Home » Dividend Updates » July 2019 Portfolio Update

As a dividend growth investor, I am compelled 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. After spending a full year tracking my dividend income on a monthly basis, I have noticed that I have a much better understanding of how my portfolio functions.

I have also improved as a capital allocator as I am not allowing dividends to sit idly for as long before putting them back to work to keep the dividend compounding machine firing on all cylinders.

CAD Dividends

CompanyCAD Payments ($)Div Increase (%)
Toronto Dominion Bank (TD)59.20
RioCan Real Estate Investment Trust (REI.UN)31.32
The Coca-Cola Company (KO)69.59
BCE Inc. (BCE)174.35
Canadian Imperial Bank of Commerce (CM)16.80
Bank of Nova Scotia (BNS)87.00
TELUS Corporation (T)50.633.21
Rogers Communications Inc. (RCI.B)27.50
Canadian Pacific Railway Limited (CP)4.9827.69
Chartwell Retirement Residence (CSH.UN)5.00

USD Dividends

CompanyUSD Payments ($)
The Walt Disney Company (DIS)7.48

Dividend Summary

July was again a strong month, pulling in C$526.37 and U$7.48 for a currency-neutral combined total of $533.85. This represents a year-over-year gain of 12.96%:

CP was the standout this month with the dividend having been boosted by a whopping $27.69% from the preceding dividend payment. I only have a small allocation to CP and so the overall dividend amount is relatively small, but I love seeing the company make serious strides to reward shareholders in this way. Dividend growth, and the size thereof, sends signals as to management’s belief in the security of the payment and their commitment to staying on track; there is nothing more embarrassing for a management team who recently raised a dividend to need to then cut it.

CP’s President and CEO, Keith Creel, had this to say about the dividend increase:

This significant dividend increase represents not only our outstanding performance as a company, but our commitment to creating long-term value for our shareholders… CP remains well-positioned for sustainable, profitable growth and providing balanced shareholder returns is an important part of our success.”

CP Press Release – May 6, 2019

This is exactly the sort of message I like to be receiving from the CEO of a company in which I hold an investment stake.

Year To Date Progress

MonthDividends ($)
Total2924.78
January540.02
February54.41
March591.07
April521.00
May76.34
June608.09
July533.85

The first half of 2019 was solid from a dividend standpoint and that momentum continues to roll into the second half.

Market Activity

I made two stock purchases in mid-July. In both cases, I deepened my investment relationship with the Brookfield family of companies.

The first purchase was for 15 shares of Brookfield Asset Management (BAM.A) at a total cost of C$969.50. The dividend is currently U$0.16 quarterly. After the foreign exchange (FX) is factored in, I am expecting this to generate approximately C$3.13 quarterly or C$12.53 annually.

BAM.A is one of the largest alternative asset managers in the world. It is effectively the parent company of several other Brookfield subsidiaries/partnerships which actively trade as their own publicly listed companies. Through these partnerships, BAM.A is able to deploy large blocks of capital in attractive investment opportunities across the globe in diverse industries including renewable power, real estate, and infrastructure.

My second purchase was for 20 shares of Brookfield Infrastructure Partners L.P. (BIP.UN) for a total cost of C$1,129.95. As with its parent company above, BIP.UN’s quarterly dividend is declared in USD. With a current payout of U$0.5025 quarterly, I expect to bring in roughly C$13.12 quarterly or C$52.48 annually after accounting for FX.

BIP.UN is a diversified infrastructure company; it owns and operates assets across utilities, transport, energy, and data sectors. The company targets a long-term return of 12-15% for investors. As part of that total return, the company targets a 5-9% annual increase in its distribution.

My increase in forward dividend income between these two names should come out to somewhere in the range of C$16.25 quarterly or C$65.01 annually. While I’m pleased to be boosting my dividend income, I am most satisfied with being able to further broaden my stake in the Brookfield family of companies. Through 2018, I made purchased four tranches of stock in Brookfield Renewable Partners L.P. (BEP.UN) which at the time had a juicy dividend yield as the share price was depressed. Since that time, it has paid me well through the regular income and the shares themselves have risen steadily.

As prices and availability of cash flow allows, I intend to continue making purchases in this space. I view the assets that Brookfield manages as being necessary for human development and global growth. As technology advances, there will be an ever-increasing need for renewable power, large-scale infrastructure, and experienced asset managers who can deploy capital efficiently and with a high return on investment.

Cash

My special 3% interest rate at one bank was cut at the end of June. Consequently, I’ve moved my money to a different bank which is now offering me 2.4% as a special rate through October. If anything, cuts like this further incentivize me to invest excess capital rather than having it sitting around, being chewed into by inflation.

Conclusion

Adding two new Brookfield companies to my portfolio is something I have had on the radar for quite some time. I am hoping there will be a pullback at some point so I can continue adding more shares over time at better valuations and with higher dividend yields.

On the whole in July, it feels great to land comfortably above $500 in a single month once more. It’s hard to believe that in just my tenth year investing in individual stocks, I’m throwing off returns this significant. Nevertheless, it is important to not get ahead of myself and ensure that I continue reinvesting the gains in addition to throwing fresh fuel on the fire from earned income. The snowball has plenty of room yet to grow.

Thank you for reading.

Ryan

Full Disclosure: Long TD, REI.UN, KO, BCE, CM, BNS, T, RCI.B, CP, CSH.UN, BAM.A, BIP.UN, BEP.UN, DIS

6 thoughts on “July 2019 Portfolio Update

  1. Baammmmm

    You weren’t kidding about that bell position.

    Congrats on a solid month and I really like your dividend paying companies.

    Great additions of the brookfield companies. Both bam and bip are solid. I have really wanted to add to bip but utility’s are my highest sector at the moment.

    One day I’ll own them, right now i got my eyes set on either 3m jnj or disney.

    Anyways keep it up Ryan, just awesome!
    cheers!

    1. Hey Rob,

      Yeah, BCE is a powerhouse in my portfolio. Hoping they can keep the 5% annual dividend bumps coming for many decades.

      Brookfield has been a nice gem. Hoping they keep up their mandate and deliver on their expectations.

      I’m with you on JNJ (since 2010) and DIS (since this year). Haven’t pulled the trigger on MMM, but I believe my brother may have some—he was definitely looking at them at one point.

      Take care,
      Ryan

  2. chris says:

    “The snowball has plenty of room yet to grow”.

    I’m always talking to family and friends about starting early to get the snowball started down the hill. The earlier you start the bigger that snowball will get! Loving that you used the snowball reference.

    Keep up the hard work. Cheers,

    -Chris

    1. Hey Chris,

      It’s all about that compound growth over time! The toughest part is getting things started… after that the money/stocks start doing the work for you (rather than needing to put new money in to get any sort of growth).

      Glad you enjoyed.

      Take care,
      Ryan

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