It has never been a better time to be a dividend growth investor. With the online tools we now have to monitor our investments and stay abreast of current events with our companies, compounding has never been easier.
I made a grand total of five purchases of dividend paying equities during the quarter—down by one from the previous quarter—which I will detail further below. Continuing to invest at a pace of more than one purchase per month keeps the financial juices flowing.
Table of Contents
CAD Dividends
| Company | CAD Dividends ($) | Div Increase (%) |
|---|---|---|
| Toronto-Dominion Bank (TD) | 53.60 | |
| RioCan Real Estate Investment Trust (REI.UN) | 93.96 | |
| The Coca-Cola Company (KO) | 68.07 | |
| Johnson & Johnson (JNJ) | 75.15 | |
| BCE Inc. (BCE) | 166.10 | |
| Canadian Imperial Bank of Commerce (CM) | 15.96 | |
| Corby Spirit and Wine Ltd. (CSW.B) | 50.60 | |
| Bank of Nova Scotia (BNS) | 65.60 | |
| TELUS Corporation (T) | 36.75 | 3.96 |
| Rogers Communications Inc. (RCI.B) | 26.40 | |
| Fortis Inc. (FTS) | 68.00 | |
| Canadian Utilities Ltd. (CU) | 78.66 | |
| Canadian National Railway Company (CNR) | 6.83 | |
| Canadian Pacific Railway Limited (CP) | 3.90 | 15.56 |
| Hydro One Ltd. (H) | 59.80 | |
| Chartwell Retirement Residences (CSH.UN) | 14.70 | |
| Metro, Inc. (MRU) | 3.60 | |
| Brookfield Renewable Partners L.P. (BEP) | 35.18 |
USD Dividends
| Company | USD Dividends ($) |
|---|---|
| Waste Management Inc. (WM) | 19.77 |
| McDonald's Corporation (MCD) | 18.03 |
| Yum! Brands (YUM) | 11.94 |
| Yum China (YUMC) | 3.32 |
| PepsiCo Inc. (PEP) | 7.89 |
| Walmart Inc. (WMT) | 6.63 |
| Visa Inc. (V) | 1.79 |
Dividend Summary
The third quarter has shown grand totals of $992.83 CAD and $69.37 USD. Tipping the scales at $992.83 in currency-neutral terms, I have once again hit a new milestone and am just shy of a nice rounded four-figure sum. As tends to be the case for us dividend growth investors (DGI), money invested early continues to pay off in increasing amounts over time. Given the nature of these equities, I am confident that this sum will continue to increase routinely on quarterly increments.
Standouts
Though one of my smallest positions and despite its low yield, CP’s 15.56% increase is a welcome sight. The company has firmly planted a stake in the sand and intends to demonstrate to investors that it fully intends to reward shareholders with payments that will increase over time. The two previous increases in 2016 and 2017 amounted to 42.86% and 12.50%, respectively.
The only other increase this quarter came from T at 3.96%and, while minor on its own, the company tends to increase twice per annum. The January increase clocked in at 2.54% and so the overall increase in payment this year has grown from $1.97 annually to $2.10, or 6.6% in aggregate.
Quarterly Buys/Sells
BNS: I rounded out my position by picking up another 20 shares at a total cost of $1,521.95. Based on the current quarterly dividend of $0.85 CAD, I am looking for this purchase to bring in $17.00 or $68.00 annually.
H: On weakness as a result of the company’s shake-up in terms of CEO and Board, I decided to purchase another 60 shares for a total cost of $1,166.75. On the current quarterly dividend of $0.23 CAD, I expect these purchases to generate $13.80 quarterly or $55.20 annually.
BEP: The only net new addition to my portfolio recently, I picked up 105 shares in two tranches for a total outlay of $4,217.35. On the quarterly dividend of $0.49 USD, I estimate this should bring in approximately $67.16 quarterly or $268.65 annually in CAD based on figures taken from the September 28 and with the understanding that there will be fluctuations based on foreign exchange.
While I provided a more detailed look at my reasons for purchasing BEP back in August, I was ultimately looking to diversify my energy and utility holdings. I feel renewables will continue to be an increasing source of energy generation and I enjoy having the opportunity to get ahead of this trend while also earning a substantial dividend payment from the solid infrastructure that the Brookfield companies represent.
Quarterly Dividend Increase: In light of these four purchases across three positions, I have increased my annualized dividend income on a forward basis by $391.84 based on the blended yield of 5.67%. I should note that the dividends paid by BEP in the “CAD Dividends” chart represent only cash flow from the initial 55 shares I purchased as I purchase the final 50 after the ex-dividend date.
Though I strayed somewhat from my Five Year Plan in making the BEP purchase, I feel it was a solid addition to the portfolio. I do intend for this to be the last new addition for the foreseeable future as I have other companies within my portfolio I would like to increase my position in.
Q4 2018 Stock Considerations
My theme for the moment is really to capitalize on market weakness wherever it comes about. The beauty of owning individual equities within a DGI portfolio is that I can sharpshoot opportunities rather than needing to wait for overall market declines as might be the case if I owned mutual funds or ETFs. In this way, I can bulk up on my solid companies as their prices pull back despite the fact that other companies may have elevated prices.
The Canadian side of my portfolio has continued to grow and will likely remain the overall emphasis for me given that is where I am domiciled. However, the top U.S. stock I have on my mind at the moment is PEP. The company is in an interesting position with Indra Nooyi stepping down after 12 years of service as CEO (though she did serve prior to that as CFO). The company has been well managed over time and I expect it to continue executing well on its vision. I believe foods and beverages of all varieties will continue to be consumed in the manners in which PEP offers them. As they continue to innovate and find opportunities to increase prices, I hope to be a shareholder (and to an increasing extent) for decades to come.
Cash Position
I remain committed to holding as much as 30% of my portfolio in cash if opportunities do not present. At the moment I am hovering around the 17% mark which is probably reasonable at this point in time. I suspect that will creep up a bit if no obvious homeruns materialize any time soon.
I still earn 2.5% from my high-interest savings account and while the cash may be idle, it is not altogether stagnating.
Conclusion
Adding nearly $400 in forward annualized dividend income feels great for a single quarter. I look forward to continue compounding that over time as I fuel my growing dividend snowball.
With one quarter left on the books, my portfolio stands in a healthy position to exceed all expectations I had at the start of the year.
Thank you for reading and I look forward to continue sharing this journey with you.
Full Disclosure: Long TD, REI.UN, KO, JNJ, BCE, CM, CSW.B, BNS, T, RCI.B, FTS, CU, CNR, CP, WM, MCD, YUM, YUMC, PEP, WMT, V, CSH.UN, MRU, BEP
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Hi AH,
I’m glad you liked the article. Yes, if a reader enjoys a blog, they are most likely to return.
Ryan