If you told me at the beginning of 2020 that we’d see a global pandemic, the Taliban taking back Afghanistan, racial injustice, devastating forest fires, heatwaves, destructive floods, attack of the US Capitol, and a war in Ukraine over the course of two short years, I would have told you that you’re out of your mind.
But here we are…
Years ago standing in the middle of the WWI cemetery, chills ran through my spine. So many lives lost, so many lives were changed forever…
Have we not learned anything from all the wars in history? Why can’t we be all be nice and make this world a better place?
Maybe we just need to have more campfires and enjoy each other’s company…
For me, given what’s going on in the world, it is getting harder and harder to write about personal finance and FIRE. I’m sure many bloggers are experiencing the same. Don’t worry, I’m not giving up on this blog…
In case you’re wondering, here are a few things we did in February:
We went to a free hockey game at the local arena. Both kids were shocked at how fast the hockey players skated.
We made a lot of bagels. They were a hit with both kids.
To our surprise, we woke up one morning in late February to see a layer of snow…
We didn’t go skiing as we had planned, but that was OK. Every day I continue to learn that we need to be adoptable and flexible rather than fixated on a set of plans.
Dividend Income – February 2022
Back to the main topic…dividend income. In February, we received dividend cheques from the following companies:
- Apple (AAPL)
- AbbVie (ABBV)
- Bank of Montreal (BMO.TO)
- Costco (COST)
- Dream Industrial REIT (DIR.UN)
- Emera (EMA.TO)
- European Residential REIT (ERE.UNN)
- Granite REIT (GRT.UN)
- National Bank (NA.TO)
- Omega Healthcare (OHI)
- Power Corp (POW.TO)
- Procter & Gamble (PG)
- RioCan REIT (REI.UN)
- Royal Bank (RY.TO)
- Starbucks (SBUX)
- SmartCentres REIT (SRU.UN)
- Verizon (VZ)
The 17 dividend paycheque added up to $2,383.07. Since February is one of the weaker dividend income months and last year we struggled to receive over $1,800 in these weaker months, I was super happy to see that the total amount was so close to $2,400!
When we compare the historical dividend income from February, there’s a nice jump this year.
If we compare this month’s dividend income to February 2021, we saw an outstanding 32.74% YoY increase! This is fantastic and just to show that the aggressive investing throughout 2021 is paying off dividends for us (ha!).
Out of the $2,383.07 received, $432.05 was in USD and $1951.02 was in CAD or about a 20-80 split. Long time readers will recall that we do not convert USD to CAD when reporting our monthly dividend income. This is to keep the math easy and avoid fluctuations in our monthly dividend income caused by changes in the exchange rate.
The top five dividend payers from February were Bank of Montreal, Royal Bank, Emera, National Bank, and SmartCentres REIT. These top five payers contributed 72.3% of the February dividend income, or $1733.69.
February 2022 Dividend Transactions
Some readers may recall that in January we deployed roughly $37,000 to purchase various dividend paying stocks. In February, although we didn’t deploy as large of an amount, we still kept ourselves busy on the purchasing front.
To take advantage of the volatile environment with a focus on long term profitability, we purchased the following:
- 16 shares of Apple (APPL)
- 16 shares of CIBC (CM.TO)
In case you’re wondering, it was a complete coincidence that we purchased 16 shares each (I didn’t even realize that until I was writing this post). Ignoring the exchange rate completely, roughly $5,300 was deployed with these two purchases.
At the time of writing, both of these purchases are down due to the Russian invasion of Ukraine. However, I’m not concerned and I believe this is only a short term paper loss. People will continue to buy Apple products, and Canadians will continue to bank and borrow money from CIBC.
Sure, we are seeing a paper loss for both of these purchases but since both stocks pay dividends, we can afford to wait for the share price to recover while collecting dividends in the meantime. This, I think, is one of the biggest attractions with dividend growth stocks.
As the market continues to be extremely volatile throughout March and some sectors like tech and financials continue to trend down, we are keeping a close eye on the following stocks:
- Apple – I continue to like Apple’s ecosystem.
- BCE – we’d like to increase our telecommunication sector exposure slightly.
- Bank of Montreal – Out of the six Canadian banks that we own, BMO has the smallest weighting. I’d like to increase the allocation percentage a bit and get it to roughly the same amount as the other five banks.
- BlackRock – BlackRock has taken a beating in the last two months. People will continue to invest in iShares ETFs so it makes sense to take advantage of the discounted price.
- Starbucks – Another stock that has taken a beating in the last few months. I’d like to get some shares at current discounted price.
- Visa – Another solid company that has seen its share price crashed in recent months. Since Visa is one of our top 5 long term holdings, I’d love to add more shares.
- Magna International – This stock has taken a HUGE beating as a result of the shutdown of its Russian plants.
- XAW – It’s always good to add more to this great ex-Canada international ETF.
- Canadian National Railway – I picked CNR as one of my best Canadian stocks and I plan to continue to add more shares and increase our exposure to CNR.
We have a lot of stocks on our watch list, which means we need to continue to save money throughout the month and invest that money we saved.
In the last few years, as we start to encounter the law of the big numbers, we have been putting more emphasis on organic dividend growth. A stock with a 2% dividend yield and high dividend growth can easily overtake a stock with a 5% dividend yield but no dividend growth in a matter of a few years.
In February we were happy to see the following dividend increases:
- PepSi Co (PEP) increased its dividend payout by 2.7% to $1.15 per share.
- WalMart (WMT) increased its dividend payout by 2% to $0.56 per share.
- Coca-Cola (KO) increased its dividend payout by 5% to $0.44 per share.
- BCE (BEC.TO) increased its dividend payout by 5.1% to $0.92 per share.
- Brookfield Rewneable (BEP.UN/BEPC.TO) increased its dividend payout by 5% to $0.32 per share.
- Intact Financial (IFC) increased its dividend payout by 10% to $1.00 per share.
- RioCan REIT (REI.UN) increased its dividend payout by 6.25% to $0.085 per share.
- Brookfield Asset Management (BAM.A) increased its dividend payout by 8% to $0.14 per share.
- Magna International (MG.TO) increased its dividend payout by 5% to $0.45 per share.
- TC Energy (TRP.TO) increased its dividend payout by 3.5% to $0.90 per share.
- European Residential REIT (ERE.UN) increased its dividend payout by 9% to €0.01 per share.
Phew, that’s a lot of raises! I really hope we will continue to see dividend raises throughout this year.
One thing to note, despite the 6.25% raise, RioCan’s payout is still below the pre-pandemic payout of $0.12 per share.
These 11 dividend increases added $261.19 toward our annual dividend. At a 4% yield, that’s equivalent to investing $6,529.75 in our dividend portfolio. If you’re a dividend investor, please don’t ignore organic dividend growth!
Dividend Reivnestment Plans (DRIPs)
Another way for us to grow our dividend income is by enrolling in dividend reinvestment plans. We had set up all of our accounts so whenever we are eligible, our discount brokers (TD and Questrade) will enroll in drip for us automatically.
So one of our key investment goals is to accumulate enough shares to allow for drip. Once we are dripping, we’d put the investment on autopilot. Dripping allows us to dollar cost average and stay in the market during good times and bad times.
In February, we managed to drip eight stocks out of the 17 that we received dividends from.
- 1 share of Bank of Montreal (BMO.TO)
- 1 share of Emera (EMA.TO)
- 1 share fo European Residential REIT (ERE.UN)
- 3 shares of National Bank (NA.TO)
- 4 shares of Omega Healthcare (OHI)
- 1 share of RioCan REIT (REI.UN)
- 3 shares of Royal Bank (RY.TO)
- 4 shares of SmartCentres REIT (SRU.UN)
In total, $1,192.99 out of the $2,383.07 dividends received was reinvested immediately which resulted in 18 additional shares. This gave us a drip ratio of about 50%. Ideally, we’d like to see a drip ratio of above 65%.
The 18 dripped shares added $52.07 toward our annual dividend income. This corresponds to a dividend yield of 4.36%. While it’s not a large amount of increase toward our annual dividend income, an increase is better than no increase at all. Besides, if we can increase our annual dividend income by $50 each month by simply dripping, that’d add $600 each year with us not having to do anything at all!
After two months, we have received a total of $6,799.13 in dividend income. There’s no doubt in my mind that we will exceed our annual dividend income from 2021. It’s simply a matter of how much.
To put our 2022 dividend income in perspective:
- We’re earning $4.80 per hour regardless of what we’re doing. Unfortunately that’s a decrease of $1.13 per hour compared to January. But this is to be expected given the amazing January we had.
- After 10 working weeks and 40 hours a week, we have a working wage of $17.00 per hour. It’s amzing that our dividend portfolio is generating more Bc’s minimum wage of $15.20 per hour.
While we feel blessed and elated about our dividend income, I can’t help but feel extremely sad about what’s going on in Ukraine and all the people suffering and losing their lives because of one individual’s personal agenda.