Dividend Income – February 2025 Update

Welcome to another dividend income update. Since the creation of this blog back in 2014, I have been posting monthly dividend income reports to keep ourselves accountable, and also to demonstrate that it is possible to build up a sizable dividend portfolio over time.

For those of you who are new, we became serious with dividend growth investing in 2011 and started shifting money toward dividend paying stocks. Over time, we added index ETFs like XAW and QQQM to diversify our portfolio.

A quick reminder:

1. We invest in Canadian dividend-paying stocks inside our TFSAs, RRSPs, and taxable accounts.
2. We only invest in US dividend-paying stocks and US index ETF (i.e. QQQM) in our RRSPs.
3. We invest in XAW in RRSPs and taxable accounts.

It may make sense to invest US stocks in TFSAs but we haven’t made that move yet…

We keep things simple and straightforward when it comes to investing. At the time of writing, we own 42 individual dividend stocks and two index ETFs. I will be the first one to admit that we’d like to reduce the individual holdings to less than 40, probably 30, ideally. 

This year, our goal is to receive $60,000 in dividend income, which would correspond to a YoY increase of around 4.5%. In other words, this goal shouldn’t be too difficult to achieve, assuming everything falls in the right places.

After spending three weeks in Taiwan, we arrived back in Vancouver in early February. It was rough opening up my work email after not checking anything for three weeks, as I discovered that I had over 3,000 emails. So the first few days back at work were all about catching up on old emails, trying to answer new emails, and completing new tasks. To be honest, it was quite overwhelming for about two or three days, but I still think that’s better than checking work emails and continuing to work while on vacation.

After getting back from Taiwan, I went back to curling, playing 3 days a week, and trying to improve my technique. Because one of the Cubs expressed interest in curling when we asked the group what they wanted to do, I booked a two-hour introduction session for Cubs, Scouts, and Venturers at the curling rink one Saturday. The session went quite successfully. Kid 1.0 expressed interest in curling after this intro session and started attending the after-school curling program. It will be interesting to see whether he continues or not in September (it would be nice if Kid 2.0 wants to curl too). 

Dividend Income – February 2025 

In February, we received dividends from the following companies:

• Apple (AAPL)
• AbbVie (ABBV)
• Bank of Montreal (BMO.TO)
• Costco (COST)
• Emera (EMA.TO)
• Granite REIT (GRT.UN)
• National Bank (NA.TO)
• Procter & Gamble (PG)
• Royal Bank (RY.TO)
• SmartCentres REIT (SRU.UN)

These 10 payments added up to $3,365.95. Since February is one of the low dividend income months, I was pleased to see a small increase compared to last year – a YoY increase of 6.89%! 

One thing to note is that as we SLOWLY decrease the number of dividend stocks we own, we are seeing fewer and fewer payers each month but a higher amount from each payer. This is expected and a welcome behaviour. 

Dividend Hikes

As our dividend income grows, it becomes increasingly harder to grow dividend income via new capital because it would require an increasing amount of new capital. 

For example, growing from $100 to $500 in dividends would require $10,000 in new capital at a 4% yield but growing from $50,000 to $60,000 in dividends would require $250,000 in new capital at a 4% yield. Meanwhile, if a handful of dividend stocks increase dividends by 10% or more, that could drive organic dividend growth without any new capital contribution.

That’s why we track dividend hikes very closely.

In February, the following companies announced dividend hikes:

• Brookfield Asset Management (BAM.TO) raised its dividend payout by 15% to $0.4375 per share
• Brookfield Corporation (BN.TO) raised its dividend payout by 12.5% to $0.09 per share
• Intact Financial (IFC.TO) raised its dividend payout by 9.9% to $1.33 per share
• Coca-Cola (KO) raised its dividend payout by 5.15% to $0.51 per share
• Manulife Financial (MFC.TO) raised its dividend payout by 10% to $0.44 per share
• PepsiCo (PEP) raised its dividend payout by 5% to $1.4225 per share
• TC Energy Corp (TRP.TO) raised its dividend payout by 3.3% to $0.85 per share
• Walmart (WMT) raised its dividend payout by 13% to $0.94 per share

Quite a fantastic month for dividend hikes if you ask me!

Thanks to these eight dividend hikes, we increased our forward annual dividend income by $455.08. At a 4% yield, this is equivalent to adding  $11,377.

See how powerful organic dividend growth is? 

Dividend Reinvestment Plans 

Enrolling in dividend reinvestment plans (DRIPs) is another way for us to grow our dividend income. Since we aren’t living off dividends just yet, utilizing DRIP to compound dividend growth makes a lot of sense.

By enrolling in DRIP, we automatically add more shares each month, allowing us to dollar cost average our cost basis and grow our dividend income. 

What’s not to like?

We dripped the following shares in February:

• 0.326 shares of Apple
• 0.631 shares of AbbVie
• 3 shares of Bank of Montreal
• 0.042 shares of Costco
• 3.044 shares of Emera
• 0.542 shares of Granite REIT
• 6.582 shares of National Bank
• 0.57 shares of Procter & Gamble
• 4.354 shares of Royal Bank
• 6 shares of SmartCentres REIT

We re-invested $2,734.35 automatically and added a total of 25.091 shares, thanks to DRIP. This gave us a DRIP ratio of 81.3%.

More importantly, we added $103.60 toward our forward annual dividend income!

Stock Transactions

The stock market sure was volatile throughout February. Despite the Orange Man putting tariffs on hold in February, it was completely uncertain whether the supposedly one-month suspension would resume or not (it resumed in March but then some got suspended a few days later). The ongoing Russia- Ukraine war and the Orange Man trying to play “peacekeeper” but doing an absolutely brutal job of it certainly didn’t help stabilize the market. 

I continue to believe that we will see a lot of ups and downs this year. I’m not convinced that we can continue the 2024 performance going forward. More likely than not, I expect this year to be down, which would work out for us because we’re still in accumulation mode (when you’re in accumulation mode, you want the market to go down so you can purchase stocks and ETFs at a discount).

We purchased the following shares in February:

• 61.2059 shares of Canadian Natural Resources
• 31.461 shares of CIBC
• 10 shares of Fortis
• 12 shares of XAW

We didn’t pay any commissions for these four trades because of the commission-free trades at Wealthsimple and Questrade (Questrade had just removed all trading commissions, making it a very enticing online discount broker).

• Sign up for Wealthsimple with my referral code or type in YDC3NA and receive a $25 reward. 
• Sign up for Questrade with my referral code or enter referral code 826124747428063 and receive a $50 reward.

Canadian Natural Resources has been on a downward spiral for the last six months or so. Since the oil sector tends to be quite cyclical and CNQ is sitting on a lot of cash, I figured it was a good idea to add more CNQ shares. The share price has dropped even further since our purchase, so we may continue to add more shares if the trend continues (I don’t believe this is a catching the fall knife behaviour here). 

Similarly, the Canadian banks have seen their prices drop a little bit, so I decided to purchase more CIBC shares.

We used money accumulated from dividends in Mrs. T’s Questrade accounts to purchase Fortis and XAW. Fortis is one of those stocks you can buy and leave it alone. We also want to continue adding XAW to increase our international exposure.

About $6,500 was put to work, which increased our forward annual dividend income by about $294.03.

Dividend Scorecard

Here’s our dividend scorecard for February. 

I believe posting these monthly dividend scorecards has helped me to track and keep a close eye on how we are doing monthly, especially when it comes to forward annual dividend increases from the three pillars – new capital, organic dividend, and DRIP.

Some thoughts on the crazy market

To say the stock market has been volatile lately is a big understatement. The stock market tumbled yet again in March due to US tariffs. It seems that the Orange Man can’t make up his mind and keeps flip-flopping the decision. 

Amidst all these uncertainties, one thing I am 100% certain of is that the market will remain extremely volatile!

So, if you’re in the accumulating phase like us, you’re in luck – make sure you have your cash ready for deployment to buy stocks and ETFs at a discount. When you’re in the accumulation phase, it’s all about widening your earn-spend gap to potentially invest more new capital in your investment portfolio and try to take advantage of any market volatilities.

If you’re in retirement or near retirement, that’s a completely different story, as you’d be seeing your portfolio value decreasing significantly. If you’re in this stage, the most important thing is to stay in the market, not get emotional, and not make knee-jerking reactions. The worst thing you can do is sell your portfolio and sit 100% in cash. 

After doing DIY investing for almost two decades, I have learned that there’s absolutely nothing you can control regarding how the market is doing. The market will do what it pleases in the short term, but in the long term, the market tends to go up. There’s no point worrying about which way the market is going because you have absolutely no control over it. 

Instead, worry about things you can control:

• Your portfolio composition. Do you continue to hold 100% in stocks, or do you do a mix of fixed income and stocks? What’s the right mix is a very personal decision
• Your earned income and expenses. Can you increase your income? Can you cut your expenses to widen the earn-save gap? It’s easier to grow your income than to cut expenses. More importantly, you can only cut expenses so much before you start depriving yourself. 
• Avoid reading news about the market and separate yourself emotionally from the market. I think this is the key for many investors, especially new investors. 

Truth be told, I have seen and gone through many market volatilities over the years. We’ve always come out OK on the other side. So I believe we will come out of this uncertain period just fine, too. 

Having a constant income flow thanks to dividends is a big psychological boost as well. This is one of the key reasons why we continue to believe in dividend growth investing.

Focus on the long term; don’t sweat the short term. 

Summary – Dividend Income February 2025 Update

After two months, we have received $11,653.50 in dividends or $5,826.75 on average. Looking at our dividend income history, it’s quite unbelievable that we have already exceeded the annual total we received 10 years ago (2015). That’s the power of sticking with your investment strategy long term and letting your money work hard for you!

Since I like to put things in perspective, $11,653.50 after two months is equivalent to:

• $195.52 per day or $8.23 per hour
• $1,294.83 per week or $32.37 hourly wage after 9 working weeks

With our TFSA maxed out and 2024 RRSP behind us, we are now focused on maxing out our 2025 RRSP contribution room, and then adding as much new capital to taxable accounts as possible later this year. 

Earn, save, and invest. 

Rinse and repeat. 

I can’t stress enough that it’s important to keep your investment strategy as simple and as long term as possible  – you should be able to easily explain your investment strategy to a three year old!

Happy investing, everyone!