Dividend Income – Jan 2025 Update

Welcome to the first monthly dividend update for 2025!

Who could have predicted that we would see so much volatility in the stock market in the first two months of 2025? 

I certainly didn’t!

As you can see from the chart above, the market took a beating shortly after the inauguration of “the orange man.” The 25% tariffs to Canadian and Mexican products, and the 10% tariffs to Chinese products sent the market on a downward spiral. Although the major stock indices have recovered slightly since, there have been various selloffs in different sectors due to reasons such as…

• DeepSeek AI causing the tech-heavy Nasdaq to plunge 
• Tech companies’ plans to increase CapEx significantly
• Canadian and Mexican governments announced retaliatory tariffs for US products
• Bad inflation numbers 

And the list goes on. 

Despite all the negative news and uncertainties in tariffs, we continue to do what we have been doing for over a decade – we earn money, we live below our means, grow the earn-save gap, and invest money in the stock market regularly. Rinse and repeat. For the most part, we don’t have much cash sitting idle. Rather than doing the traditional 60% equities and 40% bonds approach, we are 100% invested in the equity market and diversify by staying in the market rather than trying to time the market. 

It always boggles my mind when I see people liquidating their entire portfolio to sit on cash for months and plan to “jump in” whenever there’s a stock “correction.”

Most of the time, these so-called corrections are less than 5%.  

In Facebook groups and on X (formerly Twitter), I saw people announcing in late January and early February that they sold everything because the market was “overvalued” or that the tariffs would cause the stock market to crash and burn.

Yes, with The Orange Man in charge, there are a lot of uncertainties. Every day brings new totally unforeseen pronouncements. But life is full of uncertainties so one shouldn’t be surprised that the market is uncertain as well. If one could accurately predict what the market would do, this person would be the richest person in the world. (So beware of anyone who claims to be able to accurately predict what the market will do tomorrow … or next year…. And run – quickly – the other way.) Yet, we have not seen any traders making it to the Forbes Billionaires List and staying on there consistently…(other than maybe Warren Buffett!) 

It just further reinforces the idea that market timing doesn’t work! Ignore all the noise, stay in the market and stay invested are the easiest way to keep yourself sane!

I can’t emphasize enough that patience is the key. Investing is a long – VERY long – game and one must have patience… flip-flopping between different investing strategies may seem a good idea in the short term but you will end up worse off than simply staying with a long term strategy. EVERY time!

Another thing to note is that there’s no one-size-fits-all investing strategy. Hybrid investing – investing in individual dividend stocks and index ETFs works well for us, but it doesn’t mean it will work for everyone. Similarly, dividend growth investing may not be for everyone and the same can be said for other types of investing like index, real estate, precious metals, cryptos, and so on. You can use the analogy that not everyone likes the same type of cuisine, some like Italian, some like Japanese, some like Indian, and some like Ethiopian. Who’s to say which one is better than the other? 

In mid-January, Mrs. T, both kids, and I hopped on a plane and spent three weeks in Taiwan. The main purpose of the trip was to attend my nephew’s wedding. Since the wedding was close to Lunar New Year, we decided to stay a bit longer so Mrs. T, Kid 1.0, and Kid 2.0 could experience it in Taiwan. 

Overall the trip was a blast with us spending a lot of time with relatives and having a lot of good food. I’ll write a detailed trip report post later (similar to our Iceland trip). For now, here are some pictures from our Taiwan adventure.

Dividend Income – January 2025

In January we received dividend payments from the following companies:

• BCE Inc (BCE.TO)
• Bank of Nova Scotia (BNS.TO)
• CIBC (CM.TO)
• Canadian Natural Resources (CNQ.TO)
• Capital Power Corp (CPX.TO)
• Granite REIT (GRT.UN)
• PepsiCo (PEP)
• Power Corp (POW.TO)
• South Bow (SOBO.TO)
• SmartCentres REIT (SRU.UN)
• Telus (T.TO)
• TD (TD.TO)
• TC Energy Corp (TRP.TO)
• VICI Properties (VICI)
• Walmart (WMT)
• iShares ex-Canada international ETF (XAW)

The 16 dividend payouts added up to $8,287.55 which is a new monthly record for us! It’s pretty neat to start off the year with a monthly dividend income of over $8,200.

January dividend income typically has been the highest amount we receive for the year due to the semi-annual dividend payment from XAW. It will be interesting to see whether we can break this monthly record later in 2025 (we did in 2023 but not in 2024).

Compared to January 2024, we saw a YoY growth of 17.55%. It’s always nice to see a YoY growth percentage north of 15%!

Dividend Hikes 

In January a few companies raised their dividend payouts:

• Brookfield Renewable Corp (BEPC.TO) raised its dividend payout by 5.1% to $0.373 per share
• BlackRock (BLK) raised its dividend payout by 2.2% to $5.21 per share
• Canadian National Railway (CNR.TO) raised its dividend payout by 5.0% to $0.8875 per share

It would have been nice to see a few more dividend payout increases but three increases was better than what we saw in January 2023 (with only two raises). In case you’re wondering, both BlackRock and Canadian National Railway raised their dividend payout last January as well. 

These dividend hikes increased our forward annual dividend income by $75.42.

Dividend Reinvestment Plans

Last year I transferred my RRSP and TFSA to Wealthsimple to take advantage of a fractional DRIP. The idea is to try to drip as many shares as possible (even not a full share) and take advantage of the power of compounding. 

Since moving over to Wealthsimple, our DRIP ratio (amount of money used to drip shares divided by dividend income) increased dramatically. 

Overall, I’m quite happy with Wealthsimple but plan to continue to use both TD Direct Investing and Questrade. We may transfer some of Mrs. T’s accounts from Questrade to Wealthsimple later.

In case you’re interested, sign up for Wealthsimple with my referral code or type in YDC3NA when you sign up. You’ll get a $25 reward for simply signing up. You can also sign up for Questrade with my referral code or enter referral code 826124747428063 when signing up.

Thanks to enrolling in DRIPs we automatically added the following shares in January:

• 27.622 shares of BCE
• 9.965 shares of Bank of Nova Scotia
• 11.251 shares of CIBC
• 2.272 shares of Canadian National Resources
• 2.126 shares of Capital Power Corp
• 0.531 shares of Granite REIT
• 0.506 shares of PepsiCo
• 6.194 shares of Power Corp
• 3.084 shares of South Bow
• 7 shares of SmartCentres REIT
• 40.733 shares of Telus
• 17.746 shares of TD
• 10.336 shares of TC Energy Corp
• 2.874 shares of VICI
• 0.151 shares of Walmart
• 22.779 shares of XAW

In total we dripped 165.17 shares and reinvested $7,622.19 immediately, resulting in a DRIP ratio of 92%. 

Thanks to DRIP, we added $429.89 in our forward annual dividend income!

Stock Transactions

January meant new TFSA contributions so on January 1st, we transferred $7,000 to each of our TFSA. On January 2nd when the market opened, I first closed out our remaining position in Canadian Tire, and then purchased stocks in our TFSAs. We also transferred some money to my Wealthsimple non-registered account for another purchase.

We added the following stocks in January:

• 97 shares of TD
• 73.375 shares of Canadian National Railway
• 40.4433 shares of Brookfield Corp

Some of you may recall that TD was hit with a $3 billion penalty in the US money laundering case. However, I thought the market over-reacted to the news and at ~$75, TD shares were undervalued and that was the key reason to add more TD shares to our portfolio. 

What I didn’t expect was that TD decided to accelerate the CEO transition by naming Raymon Chun from COO to CEO on February 1st rather than the original plan of April 10. Furthermore, the board adopted new term limits, resulting in five directors retiring at the 2025 annual shareholders meeting. The market took this news positively, causing the share price to jump from around $79 to over $83. 

We purchased more shares of Canadian National Railway with a similar rationale as TD. CNR share price has taken a beating since late November, down from a high of ~$180 to the $145 range. Since the North American economy relies heavily on railway transportation, I believe it’s a good time to pick up CNR shares, collect dividends in the meantime, and wait for the share price to recover.

We added some Brookfield Corporation shares back in December and since BN made up about 1% of our dividend portfolio, we decided it was worthwhile to continue adding more BN shares and try to increase our exposure. 

These four stock transactions added $507.09 toward our forward annual dividend income. 

Dividend Scorecard – January 2025

Here’s our dividend scorecard for January:

Not only did we see a new monthly dividend income record, we also added $1,012.40 in dividend income. This is a fantastic way to start the new year! 

Some thoughts on BCE

On February 6th, BCE announced its fourth quarter results. Overall, BCE posted higher net earnings but added fewer wireless subscribers than expected. The company also announced that it would maintain its dividend payout, at least for the remainder of 2025.

The market didn’t like that BCE decided to maintain its dividend payout and the stock dropped by $2.08 or 6.17% the next day. Considering BCE’s financial situation (a lot of debt), the extremely high yield (over 12%), and quite a bit of uncertainties (sale of MLSE and purchase of Ziply Fiber), it would have been financial prudent for BCE to cut its dividends so it can clean up its books. 

But the BCE board doesn’t see it this way and decided to maintain the dividend payout, for now.

The thing is, everyone is expecting BCE to cut its dividend payout sometime in the future. If this is the overall sentiment, BCE is probably better off cutting the dividends and straightening out the boat instead of this prolonged share price nose dive. Put simply, the company and its shareholders (and its balance sheet) all would be better with a dividend cut, sooner, rather than later.

Some dividend growth investors have sold BCE shares at a loss. We sold some shares in December for tax-loss harvesting reasons and kept some shares so far. The reason? We’re already down significantly,so  why not wait it out? At the time of writing, BCE is around 1% of our portfolio so if the dividends were to get cut by say 50%, it wouldn’t impact our overall annual dividend income that much. 

Holding onto BCE, dripping additional shares each quarter, and not buying more shares is the current plan. Will BCE get out of the market doghouse and eventually recover? I sure hope so but it may take some time. 

Again, patience is the key when it comes to investing.

Summary – Dividend Income January 2025 Update

2025 started off with a really big bang by us collecting $8,287.55 in dividends. 

Our dividend income goal for 2025 is $60,000 which corresponds to a YoY increase of 4.51%. Looking at our historical growth in the last few years, we should be able to accomplish this goal with relative ease but I don’t want to be overconfident about it.

We simply need to stay focused on adding new capital to our dividend portfolio, get it to continue to grow in value and generate dividend income. 

At $8,287.55 after 31 days, it is equivalent of:

• $267.34 per day or $11.14 per hour that our dividend portfolio is generating for us regardless what we are doing
• $1,657.51 per work week or $41.44 hourly wage (wow!!!)

Since it was a record-setting month, I do not expect such heights to continue in the months to come. But I have no doubt that one day, in the not-too-distant future, our dividend portfolio will be able to generate more than $41.44 per hour wage ($86,195.20 per year in case you’re wondering). 

In the meantime, we will continue to rinse and repeat the boring steps we have been doing for over a decade – earn money, live below our means, grow the earn-save gap, and invest money in the stock market regularly. 

Here’s to a great 2025!