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.
Dividend Increases
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!
Summary
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.
Therefore, I’d like to challenge every reader to provide a helping hand by donating to charities like Canadian Red Cross, Unicef, Save the Children. You can also check out more charities here.
Thank you!
Bob,
What a fantastic month, as always. But more importantly, your thoughts at the beginning about wars hit home. How many more times does it have to result to this? Seeing pictures of cities destroyed like they were during WW2 makes you think that there must be a better way to resolve these issues. ‘one day, maybe it won’t resort to this in the future.
Bert
Just found your website this morning. Very helpful and informative, thank you! I’m 63 and just getting started investing. I hope I live for a long time!
You’re welcome Tim. Happy investing!
Yup, the wrath of God has been spilled on mankind and it is not over yet. As for finances, what is your end goal for dividend income? I am at 5K of monthly dividends and keep plugging along. It is not always easy to set an exit target with all the volatility around.
We are aiming to have between $50k to $60 of dividend income per year.
Great results.
I don’t dollar cost average. Like what happened 3 weeks ago, men like me keep lots of dry powder around and I was building my cash up in January for such a likely event to occur.
I did a lot of buying but not Canadian except for SLF as not Canadian stuff came down.
I was busy buying the imploding EU financials- UBS, MURGY, AVVIY, ALIZY, US and EU industrials MMM, HON, CMI, SIEGY, CHNI, SHW, US and EU Consumer- UL, SBUX and loaded up AMZN,GOOGL.
I’m getting cash ready for next month when the Fed will likely raise interest rate 0.5% and the markets will freak.
I’m putting more cash in non dividend stocks like AMZN/GOOG. Also BRK if it ever comes down again. As these will be harder to tax
I’m worried about this NDP/Lib coalition and what will happen next month with the budget. I’m betting PM Singh will institute his well documented policy of ” making the ‘rich’ pay their fair share and just a little more” LOL. I can see increase on dividend tax and possible wealth tax as he has advocated.
Thanks. Having some cash sitting on the side ready when there’s an opportunity is a great idea.
Do you still plan to hold OHI? It seems like it’s increasingly riskier.
Been keeping a close eye on OHI. It’s probably the riskiest holding we have right now. I haven’t decided what to do with it yet. For now, probably hold and see what happens. Having said that, it’s a smallish position for us.
Hi Bob,
Thank you as always for such a detailed information. A question regarding 15% withholding tax on dividends: I have 15 VZ shares in TFSA account at RBC. I think the bank charges 15% tax. I’ve received a divident of $8.16 US (0.64 per share). Is it ok?
Thank you in advance,
Lena
Yes you’ll get hit by the 15% withholding tax if you hold US dividend stocks in TFSA/taxable. If you hold it in RRSP then there’s no withholding tax.
Really enjoy these dividend posts and it’s quite impressive how much more dividends you’re growing YoY. I am wondering what your opinion is as far as how much capital I should invest in dividends vs. how much capital I should invest in growth?
For example, if an investor is starting out with say $50K, should they try to invest in growth first, exit, and then use that capital for dividends? Or would you recommend them go 100% in dividends to start with?
Also: “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?” I think most people want to world peace and to be nice to each other. But it only takes a couple of people in power for their brains to not work properly in order to create a ton of chaos. So in theory, world wars are very possible even if 99% of the world desperately wants to be nice to each other and world peace.
I’ve been telling my coaching clients to focus on all in one ETFs first then build up your dividend portfolio if you want to invest in dividend stocks. So there’s nothing wrong with investing $50k all in index ETFs. Alternatively you can do a 50-50 approach. It’s a personal choice. 🙂
I really enjoy your monthly recaps! I have a question about how you analyze stocks- what platform/app do you prefer to use? There are so many…. Simply Wall Street, Seeking Alph, Stock Advisor, etc. Some are paid and some free. What is your advice or thoughts on those? I use Yahoo Finance for a general overlook but sometimes if helps to be able to dive a bit deeper.
Also, what’s your #1 recommended book for starters getting into dividend investing and analyzing securities?
Thanks!
Hi Carly,
I usually use a mix of the following:
Yahoo Finnance
Morning Star
Canadian dividend All Star list/US dividend champion list
Company’s investor relations
Occasionally I might check out Simply Wall Street or Seeking Alpha.
For books, please see here – https://www.tawcan.com/recommendations/
Hi Bob! Good to see you guys doing well with a very good month of dividends. I can relate to how you feel about posting about personal wealth and investment with all the onslaught of terrible news in the world, especially the war in Ukraine… I have been not reading personal finance blogs these few weeks due to similar feelings of sadness too. Well I think we should do what we can, donating where we can and continue to take care of ourselves and live a ‘normal’ life in Canada while being mindful of our blessings… Thank you for your detailed listing of stocks that you intend to buy. These are giving me great reminders of potential stocks to add to my portfolio. After 1 year of investment, by following some of your strategies and mimicking portions of your portfolio, I was able to protect my overall portfolio from extreme price fluctuations! So your blog is making a good difference in the world, for me at least ☺
Oh and P.S. I recently bought more APPL, MSFT and AMD in my TFSA. Mix of dividend and non dividend stocks for tech industry because I think in long term they will do better and better each year
Hi Sarah,
Yea, we certainly have been doing our shares and donate to charities when we can. Solid purchase of these tech stocks. Although in Apple and Microsoft’s case you might want to consider moving them to RRSP to save yourself the 15% withholding tax on dividends.
Tax time… and I bought some US stocks recently. At 77 I am too old to consider RRSP. Could you give some suggestions and information regarding Canadian & American taxation on gains, losses and dividends? It would be much appreciated.
Also, would you consider getting a PayPal account. You have provided many of us with very useful information and would like in some small way donate to your fund–the people dividend! Thanks for sharing information.
I’m not a tax specialist but generally speaking it’s best to hold US dividend stocks in RRSP to avoid the 15% withholding tax (or RRIF). If you can’t, then it’s a choice between TFSA and taxable. Both will get hit by the 15% withholding tax but when holding US dividend stocks in taxable, you do get foreign tax credits on the amount you paid.
You can take a look here – https://www.tawcan.com/my-dividend-investing-approach/
hi. congrats on your results! how did you determine your drip ratio target? 65% feels low. i drip in the low 80%. are both you and your partners dripping thr same rate or is one alot higher?
The 65% is our collective total since $1,192.99 out of the $2,383.07 was reinvested for additional shares.
Ideally, it would be nice to see a higher drip ratio but since we hold shares across multiple accounts, it’s difficult to enroll in DRIP for every single holding. 🙂
Bob,
Wow another great month. Long term are you planning on keeping Magna? Just bought some after it went down in the market. Thinking it should be a long term hold?
Thanks again, keep up the great summaries, look forward to them!
Todd
Hi Todd,
Thank you. We bought Magna many years ago so we’re looking at some paper gain. Magna is playing a big part in the EV sector so I don’t plan to sell with the short term pain. Might worth adding some more shares while the share price is down.
It’s my lowest month by far. I don’t worry so much since it all evens out (quarterly or annually). RY, NA, POW, PKI and PZA are my only February payers in my taxable account. I have full (full+) positions in all of them and can’t think of anything else I’d like to hold (that pays in February).
I just pulled up the chart for POW (because I thought it paid in March) and saw that TMX Money has it at a 4.3EPS and 8.9P/ERatio with a reasonable share price (IMO) of $38.32. make me think I should add some more. Thoughts?
Thanks for sharing.
Feb, May, Aug, and Nov are usually the weaker months because not as many Canadian companies pay dividends on these months. I agree with you, nothing to worry about it as the dividends do even out eventually.
We purchased POW a while ago and plan to add more at the current price.
Bob,
Another impressive month and year over year increase. Thanks again for sharing your results and thoughts. I also added to XAW, AAPL and CM and some XQQ. I mostly tried to rebalance with purchases and I also added some purchases to my existing positions to increase dividends to get the extra DRIP’d shares. Looking forward to your further updates. Enjoy the coming spring!
Charles
Thank you Charles. Good add on AAPL and XQQ, I think tech will recover. 🙂