Wow, it’s hard to believe that we’re toward the end of summer and fall is just around the corner.
I have to be honest, I didn’t check the market all that much in August due to various reasons. Since we believe in time in the market, it doesn’t makes sense to pay close attention to the day to day market condition.
The beauty of dividend growth investing, for me, is that I can rest easy at night knowing that we will receive dividends regardless how the market is doing. We can ignore short term volatility and focus on our long term goal – financial independence.
Now, I don’t mean that dividend growth investors should only focus on dividend income and ignore capital growth completely. Total return matters and us dividend growth investors should definitely focus on total return.
Getting regular dividend payments from stocks is a huge psychological boost. Because if a stock is down, we can wait for it to recover while collecting dividends – this is exactly what happened for us with Intact Financial and Manulife during the financial crisis.
One of the reasons I didn’t check the market all that much in August was because I was enjoying summer, spending time with my family. In August we continued this summer’s trend of having a lot of ice cream with the kids.
We also continued to harvest a lot of produce from our backyard garden (no pictures though, as we were too busy eating).
The biggest thing we did in August was going on a 11 day family Alaska cruise with my parents, my brother’s family, Mrs. T’s mom, and my brother’s in-laws – 12 people in total.
Mrs. T and I went on a seven day Alaska cruise back in 2013, before we had any kids. Going into this 11 day Alaska cruise, we knew it should be a different experience with two young kids. During the 11 days, we did a lot of activities with both kids and the rest of my family. Fortunately, Mrs. T and I also had some free time to ourselves thanks to kids club onboard and grandparents baby sitting. Both kids enjoyed spending time at the kids club and doing activities with other kids.
To make sure we didn’t just stay on the ship while at port, we booked a couple of excursions with the cruise company, Princess. We also visited a few attractions on our own.
One of the highlights of the trip was the train ride in Skagway to the White Pass Summit. Built during the Klondike Gold Rush in 1898, this narrow gauge railroad is full of breathtaking views of mountains, glaciers, trestles and tunnels.
When we visited Skagway ten years ago on the cruise, we were too concerned with the cost. We told ourselves the most dangerous phrase. Ten years later, Mrs. T and I knew we shouldn’t miss the chance again. The train tickets were expensive but the experience was totally worth it.
One of the nights was the rare super blue moon so naturally we stayed up to check it out.
We ate A LOT and very well on the cruise – having three course meals for lunch and dinner. Often than not, we’d end up ordering multiple appetizers and desserts to try the different delicious dishes.
Luckily, the portion sizes were relatively small. During the day there were free ice cream, pastries, burgers, fries, tacos that we could snack on. So yea, we were well fed throughout the 11 day trip. Not doing intermittent fasting for 11 days and eating like a king probably didn’t help with my goal of hitting 15% body fat by the end of the year. Oh well.
Dividend Income – August 2023
Back to divided income. In August we received dividend pay cheques from the following companies:
- Apple (AAPL)
- AbbVie (ABBV)
- Bank of Montreal (BMO.TO)
- Emera (EMA.TO)
- Granite REIT (GRT.UN)
- Magna International (MG.TO)
- National Bank (NA.TO)
- Power Corp (POW.TO)
- Procter & Gamble (PG)
- Royal Bank (RY.TO)
- Starbucks (SBUX)
- SmartCentres REIT (SRU.UN)
- Waste Connections (WCN.TO)
These 13 dividend pay cheques added to $2,982.13. The number of pay cheques was smaller than usual, due to us closing out RioCan REIT and Dream Industrial REIT in July.
This marks the first month in 2023 that we received below $3,000 in monthly dividend income. One of the reasons for the lower dividend amount is we lost the monthly payments from RioCan REIT and Dream Industrial REIT. Another reason is that Costco’s dividend payout date is September instead of August (Costco being one of our top 10 holdings).
Despite a lower than usual monthly dividend income, I think we still had a very solid August.
Compared to August 2023, we saw a YoY increase of 7.13%. This is the lowest monthly YoY number in 2023. Given that we had re-invested the money from REI.UN and DIR.UN to Alimentation Couche-Tard and Telus, we actually lost some dividend income. So a lower YoY number shouldn’t come as a surprise.
Year to date, we are averaging a YoY growth of 19.25%. To hit the $49,000 dividend income goal for this year, we need to stay above 15.83% growth. This is something we need to continue to work on for the remaining of the year.
Out of the $2,982.13, $307.75 was in USD and $2,674.38 was in CAD, or about a 10-90 split. Please note, we do not convert USD to CAD when reporting our dividend income. This is to avoid fluctuations in our monthly dividend income due to changes in the exchange rate.
None of the companies we own raised dividend payout in August. It’s rather disappointed actually. Hopefully we’ll see a few more dividend hikes for the remaining of the year.
Dividend Reinvestment Plan (DRIP)
Long time readers will recall we rely on three pillars for growing our dividend income:
- Investment of new cash
- Organic dividend growth via dividend hikes
- Dividend reinvestment plan (DRIP)
Whenever we invest in a stock, our goal is to accumulate enough share to allow us to enroll in DRIP. Once we enroll in DRIP, we can put the stock to auto-pilot and dollar cost average at each dividend payout.
In August we dripped the following shares:
- 3 shares of Bank of Montreal
- 3 shares of Emera
- 5 shares of National Bank
- 5 shares of Royal Bank
- 6 shares of SmartCentres REIT
Thanks to DRIP, we added 22 more shares and added $84.42 toward our forward annual dividend income. It’s a small amount of money but a raise is better than no raise at all.
While we have shifted into saving mode for next year’s TFSA and RRSP contributions, we are trying to stay active on dividend transactions whenever there are attractive deals available. So a few days after TC Energy announced its plan to split into two premium energy companies we decided to buy a few more shares to take advantage of the discounted share price.
We added 87 shares of TRP.TO which increased our forward annual dividend income by $323.64.
Looking at TC Energy’s share price after the announcement, it seemed that the market didn’t like the split plan. However, I believe this is a really smart way to provide more values to shareholders. Essentially TC Energy will split into two companies:
- TC Energy post-Transaction: A diversified, industry-leading natural gas and energy solutions company, uniquely positioned to meet growing industry and consumer demand for reliable, lower-carbon energy, by leveraging complementary business sets.
- Liquids Pipelines Company: A critical infrastructure company with highly strategic assets that connect resilient and secure supply to the highest demand markets, while delivering incremental growth and value creation opportunities.
The transaction is scheduled to close in second half of 2024. For now, we’ll continue to hold TRP shares for now and wait for more news.
Dividend Score Card – August 2023
Here’s our dividend scorecard for a summary on how we did in August.
Despite not receiving any dividend hikes, we did OK on the other two pillars to increase our forward annual dividend income. With four months left, we need to see if we can add more new cash to add toward the dividend income total for this year.
Dividend Income – August 2023 Summary
After eight months, we have received a total of $33,340.01 in dividend income. We are roughly on track with our $49,000 annual dividend income goal.
To put things in perspective, $33,340.01 after eight months is equivalent of:
- $137.02 per day or $5.72 per hour
- $23.81 per hour working wage or$952.27 per week after 35 working weeks.
We are extremely thankful that our dividend portfolio is working hard and generating money for us so we don’t have to. It is also nice to know that we were generating income while on vacation.
Dear reader, how was your August dividend income?