Dividend Income – January 2021 Update

Well, we went through another month of province-wide COVID-19 restrictions. Other than the kids going to school and me going out to shop for groceries every two weeks or so, we pretty much stayed at home for the entire month of January. Since this has been more or less our approach since September, we didn’t think too much about the restrictions. We are doing our part to prevent the spread of COVID-19 and bending the curve. With the restrictions extended indefinitely, looks like we’re in this new normal for a while.

The restrictions have been hard for my parents, though. They really missed seeing their grandkids. We have been getting more video and phone calls from my parents lately so they can talk to the kids. I think both kids also missed their grandparents and both have been asking when they can go over to my parents’ house to play. For now, we’re going to follow Dr. Henry’s orders and stay vigilant. Hopefully the restrictions will be lifted soon. With the vaccines getting approved and rolling out slowly, I really hope we will go back to the old normal soon.

We also have been supporting local businesses whenever we can. With the Hot Chocolate Vancouver Festival going on, we tried the different hot chocolate flavours from local cafes. Because of COVID-19 restrictions, it meant we had to enjoy the hot chocolates at home rather than at the cafes.

I was really pleased to learn the chef that used to work at my company’s cafeteria about ten or eleven years ago started a food delivery service recently. The chef, Ravi, was famously known for his butter chicken dish. Back when he was at my work’s cafeteria, whenever butter chicken was on the lunch menu, there would be a super long lineup, often as long as 20 minutes!

I was thrilled to find out about Ravi’s delivery service from my co-workers and placed a few orders of butter chicken recently. The butter chicken did not disappoint and it was exactly how I remembered! Mrs. T finally had a chance to taste Ravi’s highly praised butter chicken (I’ve been talking about it for years). If you’re in the Metro Vancouver area, definitely check out Chef Ravi’s Rendezvous food delivery service. Let’s do our best to support local businesses!

Dividend Income – January 2021

Back to the main topic of this post…dividend income. In January 2021 we received dividends from the following companies:

  • Algonquin Power & Utilities (AQN.TO)
  • BCE Inc (BEC.TO)
  • Bank of Nova Scotia (BNS.TO)
  • CIBC (CM.TO)
  • Canadian Natural Resources (CNQ.TO)
  • Dream Office REIT (D.UN)
  • Dream Industrial REIT (DIR.UN)
  • European Residential REI (ERE.UN)
  • Granite REIT (GRT.UN)
  • H&R REIT (HR.UN)
  • Inter Pipeline (IPL.TO)
  • KEG Income Trust (KEG.UN)
  • Nutrien (NTR.TO)
  • PepsiCo (PEP)
  • Rogers (RCI.B)
  • RioCan (REI.UN)
  • Saputo (SAP.TO)
  • SmartCentres REIT (SRU.UN)
  • Telus (T.TO)
  • TD (TD.TO)
  • TC Energy Corp (TRP.TO)
  • Vanguard Canada All Cap ETF (VCN.TO)
  • Wal-Mart (WMT)
  • iShares Ex Canada ETF (XAW.TO)
Tawcan Dividend Income

The 24 dividend pay cheques added up to $3,074.46. This was the highest amount of monthly dividend income we have received to date! After breaking our all-time-record in December, it was awesome to break the record again in January. It was also really cool to see our monthly dividend income to start with a three.

If you go through the 24 companies that paid us dividends in January, you’ll notice that majority of them were Canadian companies. January was a CAD dividend heavy month. As a result, we only received $208.61 in USD with the rest in CAD. Please note, we did not convert USD to CAD when reporting our dividend income. Instead, we used a 1 to 1 currency rate approach. Why? Because we wanted to avoid fluctuations in dividend income over time because of changes in the exchange rate.

The top five dividend payouts came from iShares Ex Canada ETF, TD, Telus, Bank of Nova Scotia, and CIBC (not in order). These payouts accounted for $2,082.04 or 67.7% of our January dividend income.

Dividend Growth

Compared to January 2020, we saw a YoY dividend growth of 36.66%! This is a fantastic YoY number to start the new year! It’s probably very unlikely for us to continue with the +30% YoY growth for the entire 2021 though.

Tawcan dividend income Jan 2021 YoY growth

If we can end 2021 with a 20% YoY growth I would be extremely happy.

Dividend Transactions

A new year means new TFSA contribution limits. This year, Mrs. T and I could put in $12,000 in our TFSA. After we transferred the money in our TFSA on January 1st, we were busy looking for deals the first week of January.

One of my goals for 2021 is to simplify our dividend portfolio, so I have been looking at our holdings and determining which stocks we might close out. Another goal of mine is to decrease our portfolio’s weighting in the Canadian market.

While contemplating which stocks to close out, Brookfield Asset Management (BAM) announced on January 4th that they plan to acquire 100% of the units of Brookfield Property Partners and take BPY private. This announcement caught many BPY and BAM investors by surprise, myself included. Given that that BPY has performed poorly due to COVID-19, I thought the acquisition provides a good opportunity for us to close out our BPY position and invest the money elsewhere.

As hybrid investors that hold both dividend paying stocks and broad market index ETFs, Mrs. T and I have been holding Vanguard Canada All Cap Index ETF (VCN.TO) and iShares Ex-Canada Index ETF (XAW.TO). VCN’s top ten holding consists of many best Canadian dividend stocks like Royal Bank, TD, Canadian National Railway, Enbridge, etc. Since we already own many of these stocks in our portfolio, I wondered if it makes sense to hold VCN. After much consideration and a few discussions with Mrs. T, we decided to close out VCN and re-invest that money elsewhere.

Given we own several telecommunication companies, we have been considering closing out some of these holdings. I started comparison growth potentials between AT&T and Verizon. I feel that the growth potentials for Verizon are a bit limited because Verizon is limited to people subscribing to its telecommunication services (wireless, internet, TV, and phone services). Meanwhile, AT&T has a streaming service (HBO Max) which should allow for higher future growth. From a pure potential growth point of view, I feel AT&T is a better stock to hold.

As a result, we sold all of our BPY, VCN.TO, and VZ shares in early January.

We also started contributing to our RRSPs as part of the 2021 contributions. (Many people don’t know that contributions in the first 60 days can be used for previous and current year’s filing. Check out the ultimate RRSP guide for more information).

With the TFSA and RRSP contributions and the proceeds from selling of BPY and VCN.TO, we purchased the following stocks:

  • TD (TD.TO) – I think TD is one of the top Canadian banking stocks to hold and we simply added more shares to increase our exposure to TD.
  • Granite REIT (GRT.UN) – I like industrial REITs because online retailers like Amazon and Wayfair will always need warehouses to store their merchandise. Other companies like automobile manufacturers, automobile part suppliers, building material suppliers, brewers, etc will also need warehouses to store their products. I like particularly like Granite REIT because it has properties in Canada, the US, England, the Netherlands, Germany, Poland, Austria, and the Czech Republic. GRT.UN’s stock price has increased nicely since our original purchase in 2020. Although the dividend yield isn’t as high as other REITs, Granite REIT has a nine-year dividend increase streak with a ten-year dividend growth rate of 15.1%.
  • Enbridge (ENB.TO) – I bought more Enbridge shares because I think Enbridge is undervalued. With the stoppage of Keystone XL, suddenly, existing pipelines are more valuable than ever. Enbridge will continue to generate money for many years.
  • Algonquin Power & Utilities (AQN.TO) – we like renewable energy and want to increase our exposure to the renewable/utility sector. So we added more AQN shares.
  • Fortis (FTS.TO) – Fortis is a steady dividend paying stock and the company has increased dividends for 46 years straight. Given the stable dividend payments and growths, I see Fortis as a bond replacement.
  • iShares Ex-Canada ETF (XAW.TO) – XAW is our way to increase our international exposure without having to convert CAD to USD. We plan to continue to add XAW throughout 2021. Ideally, we would like XAW to be the top holding in our portfolio.
  • Capital Power Corp (CPX.TO) – Capital Power is a new position for us. I like CPX because of its exposure to the renewable sector (see the buying trend here?). Capital Power owns approximately 6,500 megawatts of power generation capacity at 28 facilities across North America. Most of its facilities are relatively young, with an average age of 14 years and only 2% of the current generation portfolio is expected to retire in the next decade. Capital Power also has seven renewable projects under development. With a six year dividend increase streak, a five year dividend growth rate of 7.2%, and a dividend yield of around 5.5%, CPX appears to be a great Canadian dividend stock to hold in our portfolio.

We also purchased a few non-dividend paying US growth stocks but that’s an article for another day…

These dividend transactions added approximately $1,500 net toward our annual dividend income.

Dividend Increases

In January, the following companies announced dividend increases:

  • Metro (MRU.TO) increased its dividend payout by 11.1% to $0.25 per share.
  • Canadian National Railway (CNR.TO) increased its dividend payout by 7% to $0.615 per share.
  • Intel (INTC) increased its dividend payout by 5% to $0.3475 per share.
  • Canadian Utilities (CU.TO) increased its dividend payout by 1.01% to $0.4398 per share.

These dividend increases added $35.18 toward our annual dividend income. Hopefully companies will continue to raise dividend payouts throughout 2021.

Dividend Reinvestments (DRIP)

To keep our investment strategy as simple as possible, we enroll in dividend reinvestment plan (DRIP) whenever we are eligible. Dripping allows us to re-invest the dividend payments right away. Adding more shares also allows us to dollar cost average over time: when the stock price is suppressed, we can buy more shares; when the stock price is too high, we’d get the dividend amount deposited and we can invest the cash elsewhere.

In January we were able to DRIP the following shares:

  • 3 shares of AQN.TO
  • 2 shares of BCE.TO
  • 6 shares of BNS.TO
  • 1 shares of CM.TO
  • 1 share of D.UN
  • 1 share of ERE.UN
  • 2 shares of HR.UN
  • 3 shares of IPL.TO
  • 1 share of RCI.B
  • 3 shares of REI.UN
  • 2 shares of SRU.UN
  • 5 shares of T.TO
  • 7 shares of TD.TO
  • 1 share of TRP.TO
  • 7 shares of XAW.TO

Due to the recent market rallies and higher share prices, we couldn’t DRIP as many shares. But that’s OK, since it means we aren’t dripping shares when the prices are high. This would allow us to deploy the cash somewhere else.

Through DRIP, we added 45 more shares of various stocks. We reinvest a total $1,832.58. We dripped 59.6% of our January dividend income. Adding 45 more shares added approximately $31.86 toward our annual dividend income.

Summary

I can’t think of a better way to start a new year by setting a new all-time monthly dividend income record. We plan to continue to add new capital and purchase more dividend paying stocks throughout 2021. So hopefully January won’t be the one time we broke our monthly dividend income record.

Tawcan dividend income Jan 2021

To put our dividend income to perspective…

  • We earned $4.13 per hour so far in 2021. This means each day we’d earn $99.12, enough to have a nice meal for the four of us.
  • At $40 per hour salary, our dividend income already saved us over 9 days worth of work!

Here’s to a great 2021!

Dear readers, how was your January 2021 dividend income?

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40 thoughts on “Dividend Income – January 2021 Update”

  1. Hi Tawcan!

    Congrats on the 3k achievement. See you plot with the MoM and YoY evolution is a source of inspiration. :). You received in one month more than the entire year of 2012. What a great achievement for less than 10 year!

    Here we were not so skilled on keep the increase YoY, staying around €840 and at same level than 2018. February does not look promising as well, but let’s see.

    All the best.

    Cheers!

    Reply
  2. Nice job there Bob! Great dividend income for the month! It just keeps growing doesn’t it?

    A 36% growth rate is very impressive! It’s been a little tough to grow dividend income since the pandemic started, but we still managed 4% growth in 2020. Not many companies raised dividends, and a few even cut dividends in the travel sector, which was tough.

    I’m absolutely amazed at your 36% growth!

    Reply
    • Thanks Mr. Tako. Your 4% growth in 2020 is quite impressive given how much you’re getting already. I suspect not many companies will raise dividends this year. Hopefully by investing fresh cash will help us to grow our dividends this year.

      Reply
  3. Woo hoo! Just fantastic…..love seeing the dividends snowball. January is always the highest dividend payout month for us too. Give us motivation for the rest of the year.
    Love what you do, thanks for sharing and keep up the awesome work!

    Reply
  4. Congratulations Bob on hitting that 3k mark, what a way to start off 2021!

    To me it makes sense, if you hold many CDN stocks that make up the bulk of VCN, you may be better of sticking with CDN stocks and diversifying the rest of your portfolio like you have with XAW.

    Reply
  5. Congrats on 3k in dividend for January! Keep up the great work!

    Wondering what your opinion is on what’s going on with IPL. Do you plan to exit if the chance presents itself? I have been bag holding IPL as well.

    Reply
    • Hi KI,

      Thank you! I think IPL is still undervalued at the current price. Heartland should propel IPL upward next year. I don’t see shareholders voting yes for the taking over offer.

      You can consider selling a small amount of IPL and continue to hold the rest?

      Reply
  6. Congrats on reaching $3k in dividends in January! I think your move to close out VCN is a smart one. If you already own many Canadian dividend stocks, there isn’t much of a benefit to hold VCN. I suppose you might miss out on a few outperformers, but you’re covered from a diversification standpoint.

    Reply
  7. Tawcan –

    Nice job supporting small businesses. We have been pretty consistent with supporting at least 1 per week and try to do more.

    Also $3,000 in January with a 36% dividend growth rate is insane. Freedom Tawcan, freedom.

    -Lanny

    Reply
  8. Hi Bob, wow, what a start into 2021! You gotta love these numbers. Congrats on sticking to your path and I love how you share with us your culinary experiences.

    Reply
  9. Well done on you rebalancing ands new strategies. I like that you dumped VCN in light of how many individual stocks you already hold. More XAW for the win, this will also continue to have you seeing January/July as big dividend months with its bi-annual payout.

    Reply
  10. Hi Bob…. congratulations on the milestone!

    I was going to ask you about IPL, but saw your response above. I decided to jump ship the day after that offer was announced. I still think it might go higher, but I locked in a nice gain.

    Following your comments on Capital Power, I’m going to do some more research on them. I’ve avoided them in the past because of their legacy dependence on coal, but it sounds like they are reinventing themselves. Right now I just have CPX preferreds.

    Reply
    • Interesting that you decided to jump ship. I don’t think the offer will go through and I do think that IPL’s price will go higher once Heartland is completed.

      Reply
  11. Congrats! That’s a big milestone. I don’t track my dividend income to the dollar like this. It seems like dividend income usually peaks in December, but it seems like you got a lot more than usual in January. I hope that keeps up through the rest of the year.

    Reply
  12. Hi There Tawcan, very well done!
    May I ask what brokerage you use and apps linked to those brokers for monitoring of growth?

    Thanks Again

    Reply
  13. Wow, usually it takes a while for investors to beat their all time high dividend income in December. It’s usually when companies pay the most in dividends. With you getting to beat it so quickly after that is a great feat in and of itself.

    Good on ya and hope that it will only continue to go up from here. My $3,000 yearly dividends are getting put ti shame by your $3,000 monthly dividend checks, ha.

    Reply
  14. We earned $4.13 per hour so far in 2021. This means each day we’d earn $99.12, enough to have a nice meal for the four of us.

    Man I love that! That is just fantastic. Another great month Bob, congrats on the new record and that fantastic year over year growth rate.

    Very cool about that butter chicken guy. It nice to hear about other’s success and sounds like business is good (like his chicken)

    Its going to be a another difficult year for small businesses, all of us need to do our part to support them. Maybe go as far as trying to boycott walmart and amazon, they have benefited greatly from this “pandemic”

    Anyways keep it up Bob, results like that speak volumes about dgi.
    cheers

    Reply
  15. Hey I see your comment about diversifying out of Canadian investments. I get why on one hand, but don’t US dividends get taxed at a higher rate? So how do you plan to adjust your reporting when some dividends make you less after-tax income than others?

    Reply
  16. Amazing start for a new year, congrats.

    I noticed you also have some KEG.UN. I would like to know your thoughts about it if possible. I have bought keg.un without enough DD and regretted ever since. I am considering to cut my loss and put the money somewhere else. Will you continue to hold KEG.UN?

    Reply
    • Thank you May. KEG.UN was doing quite well before COVID but certainly dropped significantly since and hasn’t really recovered. Since it’s a small fraction of our portfolio, we are planning to keep it for now. I feel it will eventually recover once we are back to normal. Plus the current yield is still pretty decent.

      Reply
  17. Hi Tawcan, looking at your progression has been really inspirational to me.

    I was wondering, are these figures in each month based on the dividend’s payment date or the ex-dividend date?

    Thank you for your time.

    Reply

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