Home » General » Q1 2019 Dividend Report

My Background

Each investor faces a different set of circumstances. Now 32, I have been investing since I was 22 years old. My first investment in individual stocks was made in the heart of the financial crisis back in May of 2009. I purchased 40 shares (80, split-adjusted) of Toronto-Dominion Bank (TD). However, for years before making that purchase I had been researching the best methods available for both wealth creation and preservation.

I don’t believe in taking unnecessary risks and felt the whims of the stock market were too fickle as far as capital gains are concerned to base my aspirations of financial freedom on. Dividend growth investing stands out as it is far more predictable that a healthy company might increase its dividend by 6% than to make any sort of prediction about stock price volatility in the near term.

On this basis and from my initial foray into the markets with TD, I’ve built a portfolio of 26 cash flowing equities. My goal is ultimately to have a stock market portfolio which provides enough income to cover all of my expenses. While some feel that it only requires ten companies to achieve ultimate diversification, I believe there is room for a healthy level of redundancy to avoid the hiccups involved with company-specific performance. Regardless, I endeavour to always own the best of breed companies in their respective industries. I can live with a bit slower growth if it means greater security for my invested dollars.

This is a strategy I have researched over time and came to trust because it can work for me both as a young investor and likewise carry me through the decades to come. While it may not turn heads at a dinner party, it has proven its value over the past few hundred years and remains as relevant as ever today in our digital age.

Having noted the above, it is truly a great time to be a dividend growth investor. The companies I own are committed to rewarding shareholders and I love nothing more than to reinvest back into them to further increase the compounding power in my portfolio

I made one purchase of a dividend paying company this quarter and one of a non-dividend payer which I will detail further below. Each of these will, over time, contribute further to the financial fortress I am building.

CAD Dividends

CompanyCAD Payments ($)Div Increase (%)
Toronto-Dominion Bank (TD)53.60
RioCan Real Estate Investment Trust (REI.UN)93.96
Johnson & Johnson (JNJ)76.56
BCE Inc. (BCE)166.10
Canadian Imperial Bank of Commerce (CM)16.32
Corby Spirit and Wine Ltd. (CSW.B)151.80
Bank of Nova Scotia (BNS)85.00
TELUS Corporation (T)38.153.81
Rogers Communications Inc. (RCI.B)26.40
Fortis Inc. (FTS)72.00
Canadian Utilities Ltd. (CU)84.547.48
Canadian National Railway Company (CNR)8.0618.13
Canadian Pacific Railway Limited (CP)3.90
Hydro One Ltd. (H)59.80
Chartwell Retirement Residences (CSH.UN)14.70
Metro, Inc. (MRU)4.0011.11
Brookfield Renewable Partners L.P. (BEP)128.865.10

USD Dividends

CompanyUSD Payments ($)Div Increase (%)
Waste Management Inc. (WM)21.7910.22
McDonald's Corporation (MCD)20.71
Yum! Brands (YUM)13.9316.67
Yum China (YUMC)3.98
PepsiCo, Inc. (PEP)7.89
Visa Inc. (V)2.13
AbbVie Inc. (ABBV)18.1911.46

Dividend Summary

I raked in grand totals of C$1,083.75 and U$88.62 in the first quarter of the year. In currency-neutral terms, this brings me to a sum of $1,172.37.

The only caveat to the total, if there must be one, is that the CSW.B dividend amount was bulked up by the C$101.20 special dividend which I received in January. While CSW.B has only provided modest dividend growth since I initiated my position back in 2014, it does pay a special dividend every few years when it has surplus profits which it doesn’t require to invest back into the business. While steady dividend growth is my overall goal, an extra cash infusion now and then never hurts.

Standouts

Five of my companies provided double digit increases in their dividend payments. From greatest to least, I received these increases from CNR, YUM, ABBV, MRU, and WM. Collectively, these run the gamut as far as sectors and lines of business are concerned. While it may be a bit of an arbitrary sample size, I find that this represents the strength of the dividend growth strategy. Being able to rely on burgeoning cash flows from across the spectrum affords a level of comfort that wouldn’t be possible from a single source (i.e., a job) or a single industry (i.e., technology or any other).

Quarterly Buys/Sells

I sold no stocks this quarter. This fits in with my chief aim of being a net accumulator of assets over the long term.

ABBV: I added to my position this quarter with an additional 24 shares for a total of U$1,929.95. On the quarterly dividend of U$1.07 quarterly, I expect this to kick off U$25.68 quarterly or U$102.72 annually.

Berkshire Hathaway Inc. (BRK.B): I bought three shares of BRK.B for a cost of just over U$600.00. These shares do not a pay a dividend and so contribute nothing to my quarterly or annual dividend totals.

As I mentioned in my January 2019 Portfolio Update, I initiated a position in BRK.B both so I would have the shares and also so I would be able to attend the shareholder meeting in early May.

Q2 2019 Stock Considerations

The market remains exceptionally elevated. I am having a difficult time sitting on the sidelines at the moment as I do have money to deploy should an opportunity arise. I am reminded in times like these of Warren Buffett’s words:

The stock market is designed to transfer money from the active to the patient.

Warren Buffett

As I write this, I have been tempted all day to pull the trigger on some additional shares of T as I believe the company has been executing exceptionally well both in telecommunications and in healthcare. However, the run-up of the stock recently has held me at bay. That said, I may well make a purchase in the near future.

Most of my portfolio has been on the rise and so it makes me hesitant to double down in any particular area. I am hoping very much for a pullback to capitalize on.

Cash Position

The 3% interest I am earning now extends to the end of June. So, on the bright side of things as far as limited opportunities go, my cash position is at least kicking off some decent cash flow at the moment.

Conclusion

Only making one purchase of cash flowing equities this quarter is a recent low. With that said, it has been exceptionally challenging to find anywhere to invest at the moment. High quality companies feel fully valued and this has kept me parked on the sidelines.

Looking to Q2, it is likely that I will at least make a few nibbles even if prices remain as high as they have been. Passivity is an important trait with investing, but complacency is dangerous.

Thank you for reading.

Ryan

Full Disclosure: Long TD, REI.UN, JNJ, BCE, CM, CSW.B, BNS, T, RCI.B, FTS, CU, CNR, CP, WM, MCD, YUM, YUMC, PEP, WMT, V, CSH.UN, MRU, BEP, ABBV, BRK.B

4 thoughts on “Q1 2019 Dividend Report

  1. Nice Ryan.

    Breaking it down quarterly is pretty nice. Got to love those totals.

    Id love to add to my telus position as well.

    (well or bell but telus more)

    The market seems high but if a china us deal does come to fruition the market should continue to run.

    I find it hard to park cash. Id rather just throw that money into the market each month.

    Anyways keep it up Ryan!
    cheers man
    Passivecanadianincome recently posted…April 2019 Passive Income UpdateMy Profile

    1. Hey Rob,
      Yeah, I agree that the market feels elevated at this point. I did pick up some T, but have a feeling the shares will hang around where they’re at or maybe even decline at some point. Either way, I’m in it for the long haul and rising dividend.
      You’re not wrong to keep making move rather than parking cash. I tend to be very comfortable with sitting on cash and there’s definitely a downside to it in some cases. Important to keep investing.

      Take care,
      Ryan

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