October 2019 Portfolio Update

I was fortunate to sit tight in September, where I made no investments. This month saw some sharp declines in the railways, which is one of my favourite industries overall. I was fortunately sitting on some cash, looking for just such an opportunity to put my capital to work.

CAD Dividends

Company	CAD Payments ($)	Div Increase (%)
Toronto Dominion Bank (TD)	59.20
RioCan Real Estate Investment Trust (REI.UN)	31.32
The Coca-Cola Company (KO)	70.38
BCE Inc. (BCE)	174.35
Canadian Imperial Bank of Commerce (CM)	17.28	2.86
Bank of Nova Scotia (BNS)	90.00	3.45
TELUS Corporation (T)	50.63
Rogers Communications Inc. (RCI.B)	27.50
Canadian Pacific Railway Limited (CP)	4.98
Chartwell Retirement Residence (CSH.UN)	5.00

Dividend Summary

October pulled in a grand total of C$530.64. It is one of the odd months that I don’t earn any USD dividend income just based on the timing of payments from my American based companies which I hold in their home currency. Nevertheless, this sum represents an ~8% year-over-year increase from last year’s October total:

Year To Date Progress

Month	Dividends ($)
January	540.02
February	54.41
March	591.07
April	521.00
May	76.34
June	608.09
July	533.85
August	76.34
September	621.73
October	530.64
Total	4,153.49

Hitting $4,000 is already a new dividend income high and there are still two months left in the calendar year. While November is going to be a slow month, December can be counted on to bring me close to $5,000. Exciting times, indeed.

Market Activity

I’m pleased to say that October brought with it three stock market purchases after a few months of inactivity. Consistent with my theme for the year, I’ve added shares in companies I already owned.

The past two months brought with it some serious volatility in the railway space. I initially purchased both Canadian National Railway Company (CNR) and Canadian Pacific Railway Limited (CP) back in February 2016 and have been waiting for just such an opportunity to add to them; they have been so steadily rising over the past few years that I’ve felt benched on the sidelines.

From the middle of September until today, shares of both companies dropped and rose once more quite rapidly:

I was fortunate to be ready to act when the time came (this is why it’s good to keep some fresh powder—cash—ready to be put to work). I wound up buying two tranches of CNR; I bought on October 1 and October 8. With CP, I made my purchase on October 8.

CNR: In total, I purchased 20 shares for a total cost of C$2,306.90. With the quarterly dividend of C$0.5375, this should bring in C$10.75 quarterly or C$43.00 annually.

CP: I bought 4 shares for a total cost of C$1,119.59. On the quarterly dividend of C$0.83, I am expecting C$3.32 quarterly or C$13.28 in dividend payments.

Taken together, these should bring me C$14.07 quarterly or C$56.28 annually. They’re both relatively low yielding stocks, but their story is about their great business models and consistent, sizeable dividend growth. These are buys that I feel good about and expect to do well for my portfolio for decades into the future. Railways have among the highest barriers to entry of any industry; this bodes well for the stable operators already in the space.

Cash

I continue to earn my 2.75% promotional rate on idle cash. No unusual items to report here. I simply continue to build cash in the hopes of cashing in on further market turbulence such as was the case with CNR and CP through October.

Conclusion

Once more crossing the $500 barrier in a single month is a solid psychological milestone. Every dollar my companies contribute to my portfolio is a dollar less that I need to find from earned income to keep my dividend engine churning at fully capacity.

Taking advantage of market weakness to pick up additional shares in companies I already own is one of the foundational elements of my investment style. I believe that trying to time the market with sales of stock is a foolhardy practice, but that buying shares on what I deem to be temporary weakness is a great way to secure higher dividend yields over time.

CNR and CP have been two of my favourite companies to hold over the past few years. I love the railroad industry because I believe it is necessary, protected, and offers the potential for considerable dividend growth. Technological advances can allow railroad companies to find efficiencies within their own operations, but I cannot see technology ever finding a way to supplant this highly effective method of transporting goods from coast to coast to coast.

As we open the books on November, I continue to comb the markets for more opportunities to buy high quality companies at bargain prices. Buffett advises us to be greedy when others are fearful—I intend to be poised to capitalize when the time comes.

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