Wow, hard to believe it’s March already. Where did the time go?
February was one heck of a BUSY month for me.
A couple of weeks after returning from Denmark, I hopped on an airplane heading to Taiwan for a quick business trip. I flew business class on EVA Air, thanks to an old travel policy prior to the company acquisition.
Despite all the good food in business class, for me, the game changer about flying business class was the ability to lie flat. I was able to sleep like a baby for around 6 hours both ways for my trip. It made the short business trip so much more enjoyable and easier to adjust to the different time zones, especially considering I arrived in Taiwan around 5:30 AM in the morning.
While in Taipei, there was a lunar lantern festival near the hotel where I was staying at. It was really neat to check out the displays at night when I had some free time.
It was my second time flying in business class (the first time was when I visited Taiwan last September). As many people had expected, the company travel policy got updated so business class fares are no longer allowed.
Oh well, it was awesome while it lasted.
In last month’s update, I mentioned my company got acquired by an American company. Well, an opportunity came up in February – a product management position became available and our EVP asked me if I’d like to move from engineering back to product management. I thought about it for a few days and decided to take the opportunity. A few weeks later, I started my “new” old job with expanded responsibilities. It will be fun working on product and business strategies again.
Considering I am working with people all over the globe, work-life balance is something I need to pay close attention to. I have already blocked certain time slots during the day so I don’t get invited to super early or super late meetings (from time to time I get meeting invites from colleagues in Europe for 6 AM meetings, or meeting at 8 PM or later from colleagues in Asia).
Just before Christmas 2021, we had to put down our beloved cat Perlemus due to an unexpected illness. The experience was really hard for all of us. For over a year, it felt very different and strange to not have a cat in our house. Before Christmas, Mrs. T and I decided that it was time to get a new cat, so told both kids that we’d get a new cat as one of their Christmas presents.
In mid-February, we adopted a 9 month old cat from the local rescue animal society and it was really nice to have a small animal in the house again.
Unlike Perlemus, our new cat, Evie, is very vocal. She likes to climb up to our shoulders and sniff around. She also likes to be cradled like a baby. For fun, we started calling her pirate cat.
We constantly remind ourselves that Evie isn’t the same as Perlemus and we need to stop comparing them...
Dividend Income – February 2023
In February we received dividend paycheques from the following companies:
- Apple (APPL)
- AbbVie (ABBV)
- Bank of Montreal (BMO.TO)
- Costco (COST)
- Dream Industrial REIT (DIR.UN)
- Emear (EMA.TO)
- 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)
In total, these 16 paycheques added up to $3,008.56. It’s nice to see that we crossed the $3,000 monthly mark since February is usually one of the weaker dividend income months for us. Why is February a weaker month? Because not so many companies pay dividends in February per the Canadian Dividend Calendar.
Comparing February 2023 dividend income to February 2022 dividend income, we saw a YoY increase of 26.25%. It’s amazing that we were able to increase the February dividend income by over $600 in a year. This is a result of investing new cash, enrolling in DRIP, and organic dividend growth.
Out of the $3,008.56 received, $448.99 was in USD and $2,559.57 was in CAD. This corresponds to about a 15-85 split. Long time readers will remember that we do not convert USD to CAD when reporting our dividend income. This is our attempt to keep the math easy and avoid fluctuations in our monthly dividend income due to the constantly changing exchange rate.
February’s top five dividend payers were Bank of Montreal, Emera, National Bank, Royal Bank, and SmartCentres REIT (not in order). The top five payers contributed to $2,223.07 of our February dividend income, or 73.9% of the monthly dividend income.
In February, the following companies that we own in our dividend portfolio announced dividend hikes:
- PepsiCo (PEP) increased its dividend payout by 10% to $1.265 per share.
- Coca-Cola (KO) increased its dividend payout by 4.6% to $0.46 per share.
- Walmart (WMT) increased its dividend payout by 2% to $0.57 per share.
- Brookfield Renewable Corp (BEPC.TO) increased its dividend payout by 5.5% to $0.3375 per share.
- Intact Financial (IFC.TO) increased its dividend payout by 10% to $1.10 per share.
- Magna International (MG.TO) increased its dividend payout by 2.2% to $0.46 per share.
- TC Energy (TRP.TO) increased its dividend payout by 3.3% to $0.93 per share.
- Manulife (MFC.TO) increased its dividend payout by 11% to $0.365 per share.
- RioCan REIT (REI.UN) increased its dividend payout by 6% to $0.09 per share.
Phew, that was a long list!
Thanks to these dividend hikes, we increased our forward annual dividend income by $327.38. This is like adding $8,184.50 worth of new cash, considering a 4% dividend yield. As our dividend income amount gets larger and larger, we will need to rely on dividend hikes to organically grow our dividend income.
I’m hopeful that we’ll see more dividend hikes to help us work toward our $49,000 dividend income goal for 2023.
Dividend Reinvestment Plan (DRIP)
When we invest, we try to use the “be the owner” concept and invest in profitable companies with wide moats. Since we want to be owners of these companies, once we start a position, the goal is to purchase enough shares to eventually enroll in DRIP.
When enrolled in DRIP, your broker automatically purchases share(s) for you whenever you receive a dividend payment from the company. Essentially this allows us to put our investments on autopilot and dollar cost average over time. Best of all, by enrolling in DRIP, we automatically increase our forward annual dividend income each month.
In February we dripped the following shares:
- 3 shares of BMO.TO
- 1 share of EMA.TO
- 5 shares of NA.TO
- 4 shares of OHI
- 2 shares of REI.UN
- 4 shares of RY.TO
- 5 shares of SRU.UN
The list was a lot shorter compared to the list from January but nonetheless, some dripped shares are better than no dripped shares at all. Adding 24 shares automatically, without paying any trading commissions added $82.57 toward our forward annual dividend income.
The minor disappointment regarding February DRIP is that we only managed a drip ratio of 54.9%, much lower than the last three or four months. We need to improve on this somehow.
However, if we compare what happened in February 2022, we added $30.50 more toward our annual dividend income or 58.6%. I’m happy to see such an improvement.
In January we purchased over $55,000 worth of dividend paying stocks. I made it very clear that we do not have that kind of cash sitting around every month. So it shouldn’t come as a surprise that we were relatively quiet on the dividend transactions front and only purchased 25 shares of Canadian National Railway (CNR.TO) in February.
We continue to like CNR.TO and would like to build up our position so we can drip one share at every dividend payout in the near future. While the passenger rail business isn’t prominent here in North America, railways are extremely important for transporting goods across North America. This is why I continue to list CNR.TO as one of the best Canadian dividend stocks.
As it turns out, investors like Bill Gates, Warren Buffett, and Charlie Munger also like railway companies a lot. Warrant Buffett pointed this out in Berkshire Hathaway’s 2022 shareholder letter.
Warren and I hated railroad stocks for decades, but the world changed and finally the country had four huge railroads of vital importance to the American economy. We were slow to recognize the change, but better late than never.Charlie Munger
Adding 25 shares of CNR.TO increased our forward annual dividend by $79. It’s not a lot of dividends but CNR.TO is more about high dividend growth and capital appreciation than high initial dividend yield.
Dividend Stock Watch List
I don’t usually do this in the monthly dividend income reports but I figure I’d change the format a little bit by mentioning our dividend stock watch list. Please note, this is not a buying recommendation, always do your own due diligence before buying an individual stock.
For February we will be watching these Canadian dividend stocks closely with the intention to buy some:
- Telus – a strong dividend growth history. The management has also declared that the target is raising its dividend twice a year, producing an annual dividend growth rate between 7 to 10% for the next few years.
- Brookfield Asset Management – A newly formed company but with $800 billion of asset under management across 30+ different countries, BAM is a very diversified company that invest in high-quality assets and businesses. With a yield of ~3.7%, I really like BAM as a long term holding.
- Royal Bank & National Bank – both are solid companies and reported solid results recently. Canadian banks are facing a bit of headwind due to the macro economy. Perhaps February will provide some good entry points to add more shares.
For US dividend stocks, I plan to continue monitoring Apple per the reasons I stated in an earlier post.
Dividend Income – February 2023 Summary
With two months in the books, we have received a total of $8,202.01 in dividend income. It’s a bit unbelievable that we already exceeded the annual dividend income that we received for 2013 and almost exceeded the annual dividend income for 2014.
Furthermore, if you look at the quarterly dividend income, we have already exceeded the amount we received in Q1 2021. The dividend snowball is definitely getting bigger and bigger for us each month.
In other words, we’re doing quite well when it comes to dividend income. We are very grateful for that.
To put things in perspective, $8,202.01 after two months is equivalent of:
- $139.02 per day or $5.79 per hour.
- $22.78 hourly wage or $182.26 per day after 9 weeks of work.
If we continue this hourly wage for the rest of the hour, our dividend portfolio would generate $47,382.40 for us. Since we are aiming to receive over $49,000 in dividend income, looks like we have a bit of work to do!
Dear readers, how was your February dividend income?
23 thoughts on “Dividend Income – February 2023 Update”
What are your thoughts on AQN these days?
It has gone up slightly. Plan to just hold them and DRIP for the short term.
Good job Bob, I can seen you are heavily exposed to the Canadian financial stocks. I’m buying a lot more Canadian banks during the recent weakness. I’m also very concerned with the real estate market in Canada. It is at a level that can’t be measured by affordability. In sight of huge immigration wave in the coming year to 2025, we would have 1.5 millions of new immigrants coming to this country. I am sure it would be great for all Canadian business especially the banks. In Canada, there is about 1 bank per 1 million people and this number dramatically changed to 1 bank per 70,000 people in the states. In aggregate, a housing crisis or crash would deal heavy blow to our Canadian big 6 banks as they combined controlling about 90% of the mortgage market in Canada. I just don’t know how severely the big 6 would be impacted by the severe downturn of our real estate market. Would you be ever concerned with the Canadian banks? I know we had withstood the last financial crisis (2008/2009) far superior than our American Peers. 4 out of the big 6 has been around longer than the history of Canada.
Very good questions Stan. We’ve been buying more Canadian banks during the recent downturns. Generally speaking I think Canadian banks are some of the most solid dividend paying stocks. After all, they’ve been paying dividends since the late 1800s. Hard to beat that track record.
Amazing business class trip and congratulations on your new old position, haha! Hope it is not going to be too stressful. And fantastic dividend report and details.
61k last year on track to hit 75k this year .. with some fine tuning it might be higher ..
Hello to both of you !
Bob, any thoughts on ETF ?
I am a beginner but have a good sum to invest and already started a portfolio almost similar to yours. I am attracted by individual stocks and being able to monitor them but many experienced investors came back to ETF . Since they seem to be beating the S&P and provide a better return on investment statistically …
Thanks in advance for your input
We do invest in ETF – XAW. We don’t use dividend ETFs and I listed out my reasons here – https://www.tawcan.com/top-canadian-dividend-etfs-dont/
If you’re just getting started, I would consider looking into one of the all-in-one ETFs. Please see these posts
Oh my gosh, Evie is adorable and gorgeous! She sounds like a lovely, sweet cat. ♥
Thank you Chrissy, she’s a really sweet cat. 🙂
I’m very happy to hear about Evie, wishing you lots of good years ahead. I lost my cat last year too and it was the worst thing that has ever happened to me.
Thank you Marina. Sorry to hear about your cat.
How much cash do you have invested to achieve 49,000 annual dividend income?
I don’t disclose our portfolio value but you can estimate it by using between 2-4% yield.
Yes BAM good. I’m also buying CM, TD and PRU on US side at these low levels .
I don’t drip but build up cash from dividends and pounce when corrections occur.
Not sure about Canadian telecoms for long run like T or BCE. Every other G20 country has very low telecoms rates and stocks like VZ, Vodaphone, AT&T have plummeted. It’s only a matter of time before the monopoly of Canadian telecoms is broken.
It will be interesting to see if the Canadian telecom monopoly will get broken or not. People are addicted to data and that’s not going to change anytime soon.
Love the pic of you and Evie!
Congrats on another successful month.
Again, thank you for all your work; I regularly use the tips given in your blog to my own benefit.
Thank you Pierre.
A great threshold to surpass for sure. Do you have any thoughts on ESG dividend stocks or ETFs? I’m finding that there are not too many options out there, so have stuck to traditional dividend ETFs and some of the stocks you’ve listed.
ESG is a good question… agree there’s not too many options out there. For us we don’t invest in tobacco companies.
Nice month, Bob. The first 8 years of my career I travelled economy including overnight flights as I generally did not meet the criteria of +12 hours. When our firm merged we were granted business class for +6 hours. What a game changer! I am at the point now that it’s business class or nothing. The idea of landing and promptly going to a meeting after sitting in economy without sleeping is not something I will do again. Perhaps as you get older certain luxuries become non-negotiable.
Thanks Josh. I’ve done 14 hours to Hong Kong on economy years ago. Would have been nice to fly business for sure.