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?

Written by Tawcan
Hi I’m Bob from Vancouver Canada, I am working toward joyful life and financial independence through frugal living, dividend investing, passive income generation, life balance, and self-improvement. This blog is my way to chronicle my journey and share my stories and thoughts along the way. Stay in touch on Facebook and Twitter. Or sign up via Newsletter