Dividend Income – Aug 2018 Update

As you may recall, we spent most of August in Denmark. While we were away, my parents were nice enough to look after our garden and take care of T Cat. When we got back in late August, we were greeted by an explosion of veggies, herbs, and fruits from our backyard garden. Since coming back from Denmark, many of the meals were made with veggies and herbs from the garden. We have also been busy consuming a large quantity of apples.

The backyard garden has been extremely worthwhile. Not only that we have been eating healthy organic homegrown items, we also saved a ton of money by not having to buy things from grocery stores.

Baby T1.0 planted one single cantaloupe tree in the spring and now the cantaloupe plant is growing nicely. Talk about having a green thumb!

corn that Baby T1.0 planted

kales everywhere!

homegrown tomatoes from our greenhouse

Needless to say, we’ll be busy consuming homegrown produce for the next little while.

 

August Dividend Income

In August we received dividends from the following companies:

  • Apple (APPL)
  • AbbView (ABBV)
  • Bank of Montreal (BMO.TO)
  • Dream Office REIT (D.UN)
  • Dream Global REIT (DRG.UN)
  • Dream Industrial REIT (DIR.UN)
  • Emera (EMA.TO)
  • Enbridge Income Trust (ENF.TO)
  • General Mills (GIS)
  • H&R REIT (HR.UN)
  • Inter Pipeline (IPL.TO)
  • KEG Income Trust (KEG.UN)
  • Laurentian Bank (LB.TO)
  • National Bank (NA.TO)
  • Omega Healthcare (OHI)
  • Procter & Gamble (PG)
  • Prairiesky Royalty (PSK.TO)
  • RioCan (REI.UN)
  • Royal Bank (RY.TO)
  • Starbucks (SBUX)
  • SmartCentres REIT (SRU.UN)
  • AT&T (T)
  • Vodafone (VOD)
  • Verizon (VZ)

In total, we received $1,588.16 from 24 companies in August 2018. Unfortunately, we didn’t cross the $1,600 mark because companies like Costco and Metro didn’t have dividend distributions; they will be paying dividends in September instead.

Still, a monthly dividend income close to $1,600 is a pretty remarkable accomplishment, considering that we started off the year getting slightly over $1,300.

Out of the $1,588.16 received, $423.86 were in USD and $1,164.3 were in CAD. Or about a 30-70 split. If you are a long time reader to our monthly dividend income reports, you know that we use a 1 to 1 currency rate approach. We do not convert dividends received in USD to CAD. We are ignoring the exchange rate to keep the math simple. This is our way to avoid fluctuations in dividend income over time due to changes in the exchange rate.

The top 5 dividend payouts in August 2018 were Royal Bank, Vodafone, Emera, Bank of Montreal, and National Bank (not in order). Dividend payouts from these 5 companies accounted for 56.2% of our August dividend income, or $892.36. 

 

Dividend Income Breakdown

We hold our dividend stocks in taxable accounts, RRSPs, and TFSAs. Every year, we maximize tax-advantaged accounts first before investing in taxable accounts.

For the August 2018 dividend income, here’s the breakdown of the different accounts:

  • Taxable: $319.87 or 20.2%
  • RRSPs: $780.28 or 49.1%
  • TFSAs: $488.01 or 30.7%

Interestingly, unlike other months, a large percentage of our monthly dividend income came from our RRSPs in August. This was certainly not by design.

When it comes to being tax efficient, only 20.2% of our August dividend income was taxable. The rest was completely tax-free or tax-deferred.

As a reminder, we only hold US dividend-paying stocks in our RRSPs to avoid the 15% withholding tax. If we were to hold US dividend-paying stocks in taxable accounts, we would lose $0.15 for every dividend dollar received, however, we do get the foreign tax credit. If we were to hold US dividend paying stock in TFSA’s, not only we would lose $0.15 for every dollar of dividend received, we would not get the foreign tax credit.

This is certainly something to consider when you start investing US dividend-paying stocks. When we started out with dividend growth investing, I made the mistake of holding a number of US stocks in our TFSAs, losing 15% whenever we received a dividend payment.

 

Dividend Growth

Compared to August 2017, we saw a respectable YOY growth of 19.59%. Funny this number was very close to the YOY growth number we saw last month. We managed to beat it by 0.03%! Woohoo!

It’s very nice to see that we managed to stay above the 15% mark 8 out of 9 months and we are averaging 18.88%.

 

Dividend Increases

In August a number of stocks that we hold in our dividend portfolio announced dividend payout increase:

  • Emera raised its dividend by 3.98% to $0.5875 per share.
  • Royal Bank raised its dividend by 4% to $0.98 per share.
  • CIBC raised its dividend by 2% to $1.36 per share.
  • Saputo raised its dividend by 3.1% to $0.165 per share.
  • SmartCentre REIT raised its dividend by 2.9% to $0.15 per share.
  • Bank of Nova Scotia raised its dividend by 3.66% to $0.85 per share.

All these dividend increases meant an overall annual dividend increase of $160.98. If you think $160.98 is an insignificant amount, think again.

At 3% dividend yield, the dividend increases meant we didn’t have to invest $5,366 to get that dividend amount. When we do eventually invest $5,366, at 3% dividend yield, we’d receive an extra $160.98. This is a perfect example of having our money work hard for us so we don’t have to.

 

Dividend Stock Transactions

Since we were on vacation in Demark for most of the August, I paid very almost no attention to the stock market. I was too busy enjoying Danish food and eating ice cream.

Two scopes of delicious ice cream. with whipping cream and jam on top. Yum!

Therefore, we didn’t make a single dividend stock transaction.

Being quiet is totally OK from time to time.

For the most part, we expect the rest of 2018 to be pretty quiet on the dividend stock transaction front.

 

Conclusion

So far in 2018, we have received a total of $12,012.22 in dividend income. If we keep averaging about $1,500 per month for the rest of the year, we should be able to hit our goal of receiving over $18,000 in dividend income for 2018. If that happens, that would be an awesome accomplishment!

Dear readers, how was your August dividend income?

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27 Comments

  • Reply
    Caroline
    September 12, 2018 at 5:27 am

    Awesome job! And how cool to be away for almost a month:)
    I was short $12 this month to hit $1K in dividend income but it was 114% more than last August so still good.
    Cheers

    • Reply
      Tawcan
      September 12, 2018 at 2:43 pm

      Thank you Caroline. So close to hitting the 4 digit mark. 114% YOY growth is very impressive. I’m sure you’ll get $1k shortly.

  • Reply
    Freedom 40 Plan
    September 12, 2018 at 5:38 am

    First – new logo and site layout look good!

    Second – nice to see those dividends continuing to roll in. You got paid $1600 last month to go on vacation I guess! I feel like there’s a real nice exponential growth chart in the making here….

    • Reply
      Tawcan
      September 12, 2018 at 2:44 pm

      Thank you Freedom 40 Plan. Yup I guess you can say that we got paid almost $1600 last month to go on vacation. That’s pretty sweet.

  • Reply
    Owen @ PlanEasy.ca
    September 12, 2018 at 10:11 am

    I know this is a personal finance blog, but I have to say your garden is great! I think I have the same kale growing in my garden, although your plants are waaaay taller : )

    Enjoy the harvest!

    • Reply
      Tawcan
      September 12, 2018 at 2:44 pm

      Haha we call it the kale forest. A few years ago we used to have more kale plants and the kids would actually go hide in the kale forest. 🙂

  • Reply
    Mr. Tako
    September 12, 2018 at 10:14 am

    Nice looking produce from the garden, and nice dividend growth too! I’m jealous of your 19% dividend growth. This year we probably won’t see much growth due to the shifting around of various investments.

    • Reply
      Tawcan
      September 12, 2018 at 2:45 pm

      Well Mr. Tako, you have way higher annual dividend income than us. As your annual dividend income gets to a certain level, it becomes hard to have a high YOY rate. We’ve talked about that before. 🙂

      But I’d happily trade my YOY growth for your dividend amount hehe.

  • Reply
    DivHut
    September 12, 2018 at 11:02 am

    First off, those veggies look insane. Time to open a mini grocery store in your front yard. As usual a nice long diversified list of companies paying you in August. Happy to be a new T shareholder with you. I just initiated a position last month. Your portfolio continues to produce nice double digit year over year gains. Keep it up.

    • Reply
      Tawcan
      September 12, 2018 at 2:46 pm

      Thank you DivHut. It’s nice to eat all those veggies for sure. We’ve been giving some out to friends and neighbours, we just can consume them all. 🙂

  • Reply
    freddy smidlap
    September 12, 2018 at 12:57 pm

    dude, that’s a fine new logo. did you make it yo’self? that are some awesome looking vegetables too. bon apeitite. those are some sweet dividend bucks. i assume the YOY growth is partly from reinvestment?

    • Reply
      Tawcan
      September 12, 2018 at 2:48 pm

      Thank you freddy smidlap, very happy with the new logo, used a designer I found online. 🙂

      YOY growth came from a combination of reinvestment (DRIP), organic dividend growth, and fresh capital.

  • Reply
    My Dividend Dynasty
    September 12, 2018 at 2:45 pm

    Amazing dividends and amazing garden! 🙂 Nice YOY increase too. I have no doubt you will cross the $1,600 mark very soon. Keep it up! 🙂

  • Reply
    DivvyDad
    September 12, 2018 at 5:02 pm

    Wow, great month you’ve had and really highlights the passive aspect of this since you earned a substantial amount—and gained some great forward income from raises—while you were enjoying some R&R time in Denmark. And 6 dividend raises in the month!

    Looks like we share 8 holdings, and while I’m still new to DGI I was able to pull in a little over $400 and had a solid 156% YoY growth!

    Wishing I were a neighbor to enjoy some of your excess veggies!

    • Reply
      Tawcan
      September 13, 2018 at 9:30 am

      Hi DivvyDad,

      Thank you! It’s nice to see things are firing on all cylinders and we have some great time in Denmark while our money was working hard for us. A 156% YOY growth is very impressive, continue your growth! 🙂

  • Reply
    llewellyn hamlyn
    September 12, 2018 at 10:11 pm

    With such a high dividend yield …. You will need alot of money invested to hold enough shares to get these great payouts. Roughly speaking what is the size of the portfolio u have invested?

    • Reply
      Tawcan
      September 13, 2018 at 9:31 am

      I don’t disclose our portfolio value but it’s not hard for you to work backwards…. just use a dividend yield of 2%, 3%, 4% for estimation.

  • Reply
    Lawrence Chung
    September 13, 2018 at 8:01 am

    Hi Bob!

    My wife and I have been following your blog for the last year and it’s great! Keep up the good work! You and your family are an inspiration to us as we would also like to achieve FI and retire before 50. We are new to the journey so that is why we probably won’t be able to retire until such time.

    You see, we are currently building up our portfolio slowly and we are generating only about $78 in dividends per month. Hopefully in about 5-10 years we’ll get to where you are.

    I noticed that you no longer hold BCE in your portfolio. Have you sold it? And if so, can you provide a bit of insight as to why? My wife and I see BCE as a pretty steady stock (although it hasn’t performed well recently) with a very good dividend yield of 5.7%. Do you think now would be a good time to enter as the share price is much lower than at the end of last year? Your thoughts would be greatly appreciated!

    Thanks,
    Lawrence

    • Reply
      Tawcan
      September 13, 2018 at 9:31 am

      Hi Lawrence,

      We still hold BCE in our portfolio. May add more BCE in the future, we’ll see. I’m a bit concerned regarding their payout ratio and the ability to grow dividend payout moving forward.

      • Reply
        Lawrence
        September 14, 2018 at 8:54 am

        Thanks very much Bob!!

  • Reply
    Mr. Robot
    September 13, 2018 at 8:33 am

    Awesome results Bob! Almost $1600 for going on vacation is a pretty sweet deal if you ask me. Also really like your garden!

    My month was a personal best with 43€!

    • Reply
      Tawcan
      September 13, 2018 at 9:33 am

      Thank you Mr. Robot. 43€ is pretty awesome, keep it up!

  • Reply
    Joe
    September 13, 2018 at 9:14 am

    Your garden is awesome. What kind of apple is that? Your dividend is awesome too, great job.
    You guys are doing extremely well with the dividend. We’ve been stagnant there. I’ve been putting new money into real estate crowdfunding.

    • Reply
      Tawcan
      September 13, 2018 at 9:34 am

      Thank you Joe. 🙂

      We aren’t doing real estate crowdfunding and real estate is simply too expensive here in Metro Vancouver to invest IMO.

  • Reply
    Passivecanadianincome
    September 13, 2018 at 6:38 pm

    nice Bob.

    That garden harvest is sweet. and so many apples! how do you not have one worm hole or brown spot?

    lol your dividends are alright =)
    keep it up
    cheers

    • Reply
      Tawcan
      September 14, 2018 at 8:52 am

      We had a lot of apples with worm hole or brown spots. If we picked everything we’d have gotten way more apples.

  • Reply
    Reverse The Crush
    October 2, 2018 at 9:07 am

    Thanks for sharing your dividend income update, Bob! Earning nearly $1,600 in one month from dividends is extremely impressive. And over $12,000 in dividend income this year…wow! Good luck with your goal to surpass $18,000! Sounds like you enjoyed your vacation to Denmark. That ice cream looks absolutely delicious! You can tell it was good by the texture lol. Thanks for including your garden photos too. Looking forward to the next update!

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