I’ve always thought it’s super cool to be born on Feb 29th. How cool would it be to tell people that you’re 5 years old but in reality you’re 20? (Yes I’m weird this way. :p) I didn’t tell Mrs. T but I was secretly hoping that Baby T2.0 would be born yesterday. That didn’t happen so Mrs. T and I were able to spend quality time together after Baby T1.0 went to bed. Since Baby T2.0 is full term already, we’re just playing the waiting game. Mrs. T and I are certainly trying to enjoy the last few days of quiet times. We don’t know what having two kids would be like but we’re both very excited. Given that we have some experience with having a little baby already, we believe things will be easier this time around. 🙂
Anyway, let’s get back to the topic of the post shall we? For those of you that are new to this site, each month I provide an update on our dividend income and our dividend growth. We love dividend income because it’s money that we receive for doing absolutely nothing as all. We can be running around after Baby T1.0 and changing diapers for Baby T2.0 while our money is working hard for us, generating more money. Who doesn’t like that?
Dividend Income
In February, we received dividend from the following companies:
Apple (AAPL)
Pure Industrial REIT (AAR.UN)
Bank of Montreal (BMO.TO)
Corus Entertainment (CJR.B)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
EnergyPlus Corp (ERF.TO)
General Mills (GIS)
H&R REIT (HR.UN)
Inter Pipeline (IPL.TO)
KEG Income Trust (KEG.UN)
Kinder Morgan (KMI)
Liquor Store (LIQ.TO)
National Bank (NA.TO)
Omega Healthcare (OHI)
Procter & Gamble (PG)
Potash (POT.TO)
RioCan REIT (REI.UN)
Royal Bank (RY.TO)
AT&T (T)
Vodafone (VOD)
Verizon (VZ)
We received a total of $1,004.29 in dividend income from 22 companies. Of the $1,004.29 received, $294.05 was in US dollar and $710.24 was in Canadian dollar. Please note, we use a 1 to 1 currency rate approach, so we do not convert the dividends received in US dollar into Canadian currency. Reason for doing this is to keep the math simple and avoid fluctuations in dividend income over time due to changes in the exchange rate.
OH MY GOD!!! This is the first time ever that we crossed the $1,000 dividend income in a month milestone! (I don’t consider March 2014 because we received special dividends) I’m thrilled to see that we finally crossed this special & key dividend milestone. Considering the recent dividend cuts in stocks like Kinder Morgan and Potash, I was worried that our February monthly dividend income would take a big hit. Fortunately the combination of new purchases and organic dividend growth in other stocks helped pushing our February dividend income over the $1,000 mark by just a few dollars. Phew!
Dividend Growth
Compared to February 2015, we saw a YOY growth of 15.75%. Pretty solid but we’d love to see that number to be closer to 20. For those of you that are new, our dividend growth is contributed by three things – investing fresh capital, purchasing of additional shares through dividend reinvesting plan (DRIP), and increasing of individual stock’s organic dividend payout each year. We see DRIP as a very effective way to utilize the power of compound interest. I’m extremely pleased to see that enrolling in DRIP has allowed us to purchase additional 12 shares of dividend paying stocks this month. The 12 new shares will increase our annual dividend income by $30.31.
$30.31 more in annual dividend income? What’s the big deal? That’s such a small amount, you may have thought.
Think again! Given a conservative 3% dividend yield, it would take $1,010.33 to generate this amount. What does this mean? It means we didn’t have to save $1,000 and invest it in dividend stocks because we took advantage of DRIP. It also means that the $1,000 that we set aside in the future can be used to buy more dividend stocks and generate more dividend income. Essentially we can generate double in dividend income for half the dollar amount invested. That’s the type of leverage I would use any given day.
Although we have seen some dividend cuts and freezes in some of our holdings, a number of stocks have increased their dividend payouts in February as well. This include BCE Inc, Manulife Financial, TransCanada Corp, Coca-Cola, Wal-Mart, Enbridge, Royal Bank, TD, CIBC, Magna International, and Waste Management. That’s 11 companies that have increased dividend payout in month of February! Wow! That’s fantastic! The largest 3 increases are Enbridge at 13.98%, Magna International at 13.64%, and Manulife at 8.82%. As owner of these dividend stocks, I’m ecstatic to see these increases.
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Moving Forward
So far in 2016 we have received a total of $1,856.31 in dividend income. We’ve already added around $19,000 into our dividend portfolio this year but there is a lot more work to do in order to reach the $13,000 annual dividend income goal. We plan to sell a few stocks that have cut their dividends and use the money to purchase other dividend stocks. We also have some money set aside ready to purchase more dividend stocks. Now that the RRSP 2015 contribution deadline is over, we can start contributing money into our RRSP toward the 2016 tax season. We hope the market will continue to be volatile so we can purchase stocks at a discounted price.
Dear readers, how was your Feb dividend income?
