Welcome to a new year of dividend income updates!
For those of you that are new, every month I provide a monthly dividend income update on this blog. This is my way to chronicle our financial independence journey. It also forces me to stay accountable with our living off dividends approach.
January saw us making our way back to Canada from Denmark. Fortunately, the return trip was relatively uneventful and we didn’t have to run to catch our connecting flight in Toronto.
While in Denmark, we enjoyed a lot of hygge in the form of coffee, cookies, and cakes. Kid 1.0 also learned how to build a birdhouse using different hand tools (under close adult supervision of course).
Two weeks after getting back from our Danish trip, we decided to hit the slopes. Thanks to a deal from StayVancouverHotels, we were able to stay in the fabulous Westin Bayshore for under $150 CAD a night and make the trip as a little staycation.
I was really pleased to see that both kids were skiing quite well. We plan to take them to Whistler before the skiing season ends.
Thanks to my Bonvoy Elite status, we were upgraded to a 1 bedroom suite and had a nice panoramic view of Coal Harbour.
Accommodation cost has gone up in the last year or so, so considering we also got a free breakfast buffet for two adults, a $150 staycation for the four of us was a really sweet good deal.
January also saw a big change on my job front – after months of shareholder, government, and regulatory body reviews & approvals, my company was officially acquired by an American company. While I have gone through quite a number of acquisitions, my company had always been the acquirer.
This, however, was my first time being on the other side.
Getting acquired meant many changes, including organizational changes and people getting let go. For me, it meant reporting to a new boss. While things seem to have stabilized for now, I wouldn’t be surprised to see more changes in the upcoming months.
Dividend Income – January 2023
Back to dividend income update, we received dividend paycheques from the following companies in January:
- Algonquin Power & Utilities (AQN.TO)
- BCE Inc (BCE.TO)
- Bank of Nova Scotia (BNS.TO)
- CIBC (CM.TO)
- Canadian Natural Resources (CNQ.TO)
- Capital Power Corp (CPX.TO)
- Dream Industrial REIT (D.UN)
- Granite REIT (GRT.UN)
- PepsiCo (PEP)
- RioCan REIT (REI.UN)
- SmartCentres REIT (SRU.UN)
- Telus (T.TO)
- TD (TD.TO)
- TC Energy Corp (TRP.TO)
- VICI Properties (VICI)
- Wal-Mart (WMT)
- iShares Ex Canada Global ETF (XAW)
The 17 dividend paycheques added up to $5,193.45. This has been the highest monthly dividend income ever for us.
A record-setting month! Woohoo!
Compared to January 2022, we saw a YoY growth of 17.60%. A very reputable YoY growth.
The goal this year is to receive over $49,000 in dividends. This means we need to maintain a YoY growth rate of 15.8% for the entire year to accomplish this challenging goal.
Out of the $5,193.45 received, $210.78 was in USD while $4,982.67 was in CAD, or about a 5-95 breakdown. Ideally, we’d like to increase our USD dividend over time. Please note 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.
January’s top five dividend payers were Bank of Nova Scotia, BCE, Algonquin Power & Utilities, TD, and iShares Ex-Canada International ETF (not in order). The total of these five dividend payers was $3,376.30 or about 65% of our January dividend income.
In January, the following companies we own announced dividend hikes:
- Metro (MRU.TO) increased its dividend payout by 10% to $0.3025 per share.
- Canadian National Railway (CNR.TO) increased its dividend payout by 8% to $0.79 per share.
- BCE (BCE.TO) increased its dividend payout by 5.2% to $0.09675 per share.
- BlackRock (BLK) increased its dividend payout by 2.5% to $5.00 per share.
These dividend hikes increased our forward dividend income by $186.06. At a 4% dividend yield, that’s the equivalent of adding $4,651.50 of new capital.
I was really happy to see four dividend hikes in January, hopefully, we will continue to see dividend hikes every month for the rest of the year.
Dividend Reinvestment Plan (DRIP)
To keep our investment strategy as simple as possible, we aim to purchase enough shares so we can enroll in DRIP. Enrolling in DRIP and being able to add new shares at each dividend payout allows us to take advantage of the powerful compounding effect.
In many ways, enrolling in DRIP allows us to dollar cost average over time – when the stock price is depressed due to market volatility or bad news, we can add additional shares at a lower price; when the stock price is inflated and the price is above the dividend amount we’re collecting, we simply don’t drip any more shares and can reinvest the money elsewhere.
In January, we dripped the following shares:
- 52 shares of AQN.TO
- 7 shares of BCE.TO
- 8 shares of BNS.TO
- 8 shares of CM.TO
- 1 share of CNQ.TO
- 1 share of CPX.TO
- 2 shares of REI.UN
- 5 shares of SRU.UN
- 10 shares of T.TO
- 7 shares of TD.TO
- 5 shares of TRP.TO
- 2 shares of VICI
- 30 shares of XAW
By enrolling in DRIP, we added 142 shares without paying any trading commissions. In case you’re wondering, the 142 shares added up to $4,137.18, or a DRIP ratio of 79.7%. Furthermore, because TD honours the DRIP discounts, it meant we added AQN, CIBC, and TD shares at a 2% price discount.
Readers will notice that we dripped a LARGE number of AQN shares. This was the last dividend payout before the unfortunate 40% dividend payout cut from AQN. The company has struggled quite a bit over the last few years and the share price is a reflection of the struggle. For now, we plan to hold AQN and continue to dollar cost average via DRIP. If the share price does eventually recover, we may consider selling some AQN shares.
The 142 dripped shares added $198.93 toward our annual dividend income.
In January, we added $384.99 toward our forward annual dividend income thanks to organic dividend growth and DRIP. At a 4% dividend yield, this is equivalent to adding $9,624.75 of new capital. In other words, thanks to organic dividend growth and DRIP, when we do invest $9,624.75 we can add another $384.99 toward our forward annual dividend income.
Do you believe in the power of organic dividend growth and DRIP? I sure do!
Like other years, most of our purchases usually happen in the 1st half of the year. This is because we usually save up money in the 2nd half of the year to allow us to max out TFSA contributions on January 1st in the following year.
We are doing the same approach this year.
In addition to the new TFSA contribution room, we had a large sum of cash to invest because all my restricted stock units (RSUs) were vested, as a result of my company being acquired.
So with the new TFSA contributions, money from the vested RSUs, and additional savings, we added the following shares in January:
- 172 shares of Brookfield Asset Company (BAM.TO)
- 128 shares of CIBC (CM.TO)
- 157 shares of TC Energy Corp (TRP.TO)
- 63 shares of Enbridge (ENB.TO)
- 30 shares of National Bank (NA.TO)
- 70 shares of Telus (T.TO)
- 57 shares of Bank of Nova Scotia (BNS.TO)
- 67 shares of TD (TD.TO)
- 66 shares of Royal Bank (RY.TO)
Phew, what a list!
The list above might not be a true reflection of the 5 stocks we plan to buy in 2023 I listed, but don’t worry, we will pull the buy trigger on those 5 stocks later this year.
In total, we added over $55,000 worth of dividend paying stocks throughout January and increased our forward annual dividend income by $2,836.21, or about 5.1% yield on cost.
Over $55,000 worth of purchases is A LOT of money for any household. Let me make it clear here, we do not have that kind of cash sitting around every month.
I will admit that we got lucky and the stars aligned in January to allow us to have a large sum of cash to invest. It’s very unlikely for us to pull this kind of large purchase again in 2023.
Dividend Income – January 2023 Summary
Well, 2023 started with a very loud bang and I’m extremely pleased to see that we had a monthly dividend income record.
To put things in perspective, $5,193.45 is equivalent of:
- $167.53 per day or $6.93 per hour
- $25.97 hourly wage, or $207.74 per day
It is absolutely amazing to have our money working hard for us so we don’t have to.
One month down, 11 months to go for us to hit the $49,000 dividend income goal for this year.
Dear readers, how did January treat you in terms of dividend income?
36 thoughts on “Dividend Income – January 2023 Update”
hi noticed you drip a lot of bank shares. how overwieght are you in that sector? plans to diversify more?
No, we’re kit overweight in the bank sector. One can always diversify more but sometimes too much diversification can hurt your overall performance.
Thanks for sharing! Do you DRIP automatically to avoid fees or do you collect all your dividends and choose what to buy based on the best stock price and fundamentals?
We drip automatically by enrolling drip with our brokers.
Amazing numbers and growth. And beautiful pictures of your family vacation in Denmark and BC. Also, happy your company and work situation is settled for now. All the best in 2023 especially reaching the $49K goal.
Hi Bob, OHI is down quite a bit, I presume due to interest rates. I’m thinking of averagibg down as the dividend is excellent. What are your thoughts on OHI as part of your USA component in the portfolio? Thanks Dave Patrick
OHI has been struggling for a while now, down quite a bit due to the higher interest rates I believe. It’s also facing some headwinds. For now we plan to keep it and just keep dripping, it’s a pretty small portion of our portfolio.
Man on man Bob, you are killing it! I brought in less than 4 digit in January… So sad. Our next 4 digit month will not come until April. I’ll be happy to be where you’re at in 10 years time. Keep up the great content and investing.
Takes time to build your dividend income, don’t be too hard on yourself. 🙂
Great Bob! Setting an excellent example for those of us that need to do this.
Thank you J.
Do you feel nervous about living off a dividend? I’m planning to retire this year and do worry about losing my employable skillset and having a bad few years on dividends. I am 41.
No, not at all. Don’t plan to just stop working, we’ll most likely be “working” in some sort of part time function.
Which broker did you use? NBDB? Is commission cost a consideration when you purchase less than 100 shares?
We use Questrade and TD. Commission cost is per trade, not based on number of shares.
I was wondering if you could provide insight to screening stocks. I am on TD WebBroker and have been selecting/reviewing more stocks using some of their massive selection of screening options — ROI & ROA in particular. Do you have any favorite selections or combinations? Do you find different types of stocks (mining vs financial) require different screening options?
BTW, your change of environment with the American takeover sounds like a challenge. Hang in there and ask for a raise!
This might help – https://www.tawcan.com/start-investing-dividend-paying-stocks/
What do you guys do for a living? Just to I can get my own expectations right. For people who can put 55K monthly it doesn’t really matter where to invest, they can just put them in GIC and retire in a few years.
Like I said in the post, we don’t put $55k each month. That money came from savings from 2H of 2022, savings from January, and company’s RSU shares getting vested.
Thanks for the update. I was following your yearly dividend income and it looks like dividends are growing nicely. What is your average yield on your investment?
Thank you. It’s about 4%.
Holy crap, $55k in new purchases is an amazing high watermark. That’ll really juice your dividend income in 2023.
Best of luck with your new company! Look on the bright side, it’s nice to get a new name on your resume without having to apply or prepare for an interview ;).
Well, it was a lot of savings from 2H of 2022. Getting some RSU vested also helped. As mentioned, don’t believe that’ll happen again any time soon.
Can you explain what you meant by 2H?
Sorry to hear you company got acquired by an American company. My observations are that this is typically not a good for the acquired company (I live/work in the US). I sincerely hope your experience works out but IMO, American companies are more greedy and less employee friendly than their foreign counterparts.
We love the Westin in Vancouver. Years back, we got a similar deal. The heavenly bed they had back then was indeed heavenly.
Agreeing with Phillip here about US companies greed.
You might be lucky and part of the 10% companies that go well after acquisition, but you still should update your resume and test the market. There is usually a 6 to 12 months “honeymoon” after which layoffs and regressing working conditions occur.
Best of luck!
We’ll see what happens Alex. Having a dividend portfolio generating sizeable dividend income gives us options. 🙂
We’ll see what happens in the future, don’t and won’t jump on conclusion just because we’re own by an American company. 🙂
I am glad I went the dividend route following your pattern. While my portfolio contains about half in 5% GICs, the overall performance is well beyond my expectations, plus the compounding of dividends. This will be my second year into the bouncy stock market. My projected annual dividends and interest are expected to be just short of $40,000. I do invest in speculative stocks and stocks with no dividends (about 10% of portfolio) to keep it interesting. Also, about 98% of the portfolio is Canadian (TSX). It has certainly been a learning experience! Keeps me young! 🙂
Thanks for your helpful insights!
Think long term, that’s all I can say. 🙂 Dividend income just short of $40k is reply solid. Congrats.
Excellent. That is the sunny day you got on Grouse. Usually we get the low visibility cloudy mixed precipitation skiing days which can be super bone chilling cold.
Big spend in January, I admire you pulling the trigger on those high quality Canadian banks.
I’m more timid and funneling all the cash into brokerage GIC and money market ETF. May even get 6% soon with all the Fed chatter.
I’ll look forward to parking some cash in 6% for 1-2 years .
I’m a non dripper as I like to buy and see my stocks in round numbers. Easier for my math abilities
We definitely lucked out with our outing on Grouse. Night skiing was quite nice too, with a really great view of the city.
Looks like you’re holding cash in lower risk investments, that’s totally fine since it really depends when you need the money. 🙂
Now that is what I call starting the year strong!!! Congrats on over $5k in dividends! It is always great to set new records. Keep up the great work! 🙂
Thank you My Dividend Dynasty.