Dividend Income – June 2018 Update

3.5 weeks after getting sick and having bronchitis, I am finally feeling better. The coughing is still lingering though, so hopefully that’ll go away soon. Although I have been walking a lot the last 3.5 weeks, it would be good to start some high-intensity exercises at the gym.

July is upon us and that means we are enjoying the awesome sunny weather here in Vancouver. With lots of sunshine that also means our backyard veggie garden is growing very nicely. We have been busy harvesting strawberries, raspberries, kale, etc and using them in meals and desserts.

raspberries

strawberries and various veggies

Tomatoes and cucumbers are growing nicely in the greenhouse

Blackcurrant and red currant. Almost ready for harvest.

Baby T1.0 planted some corns in the spring and they are growing nicely

Fresh raspberries from our daily harvest

Baby T1.0 made this cake himself (with a little help)

koldskål (Danish cold buttermilk dessert) with strawberries

I’m sure the veggie garden will keep us pretty busy over the next few months.

 

June Dividend Income

In June we received dividends from the following companies:

  • Brookfield Renewable (BEP.UN)
  • BP (BP)
  • Canadian National Railway (CNR.TO)
  • ConocoPhillips (COP)
  • Canadian Tire (CTC.A)
  • Canadian Utilities (CU.TO)
  • Chevron (CVX)
  • Dream Office REIT (D.UN)
  • Dream Global REIT (DRG.UN)
  • Dream Industrial REIT (DIR.UN)
  • Enbridge (ENB.TO)
  • Enbridge Income Trust (ENF.TO)
  • Fortis (FTS.TO)
  • Hydro One (H.TO)
  • Intel (INTC)
  • High Liner Foods (HLF.TO)
  • H&R REIT (HR.UN)
  • Intact Financial (INF.TO)
  • Inter Pipeline (IPL.TO)
  • Johnson & Johnson (JNJ)
  • KEG Income Trust (KEG.UN)
  • Magellan Aerospace Corp (MAL.TO)
  • McDonald’s (MCD)
  • Manulife Financial (MFC.TO)
  • Magna International (MG.TO)
  • MCAN Mortgage Corp (MKP.TO)
  • Prairiesky Royalty (PSK.TO)
  • Qualcomm (QCOM)
  • RioCan (REI.UN)
  • Saputo (SAP.TO)
  • SmartCentres REIT (SRU.UN)
  • Suncor (SU.TO)
  • Target (TGT)
  • Unilever plc (UL)
  • Visa (V)
  • WestJet (WJA.TO)
  • Waste Management (WM)
  • Wal-Mart (WMT)
  • Exco Technologies (XTC.TO)

In total, we received $1,690.82 from 39 companies in June 2018. This is yet another all-time monthly dividend income record!!! As you can see from the chart above, there’s a nice spike for June 2018. It sure looks nice!

It’s hard to believe that for the 5th time in 2018, we broke our all-time monthly dividend income. Wow! And not to mention that we received 39 pay cheques, so our dividend income is well diversified.

We were only $9.18 short of the $1,700 milestone. Originally I had thought that Evertz Technologies would pay dividend in June, since the previous dividend payment was in Mar. As it turned out, Evertz Technologies is paying the dividend in July. If Evertz Technologies had paid dividend in June instead of July, we would have easily broken the $1,700 record. Darn it!

The big jump in June’s dividend income mostly had to do with our purchases of Enbridge shares earlier this year. We received almost $400 in dividend income from Enbridge alone in June.

Out of the $1,690.82 received, $308.01 was in USD and $1,382.81 was in CAD. Or about a 20-80 split. If you are a long time reader to our monthly dividend income reports, you will know that we use a 1 to 1 currency rate approach. We do not convert dividends received in USD to CAD. We are ignoring exchange rate to keep the math simple. This is our way to avoid fluctuations in dividend income over time due to changes in the exchange rate.

The top 5 dividend payouts in June 2018 were Manulife Financial, Suncor, Enbridge, Chevron, and Intact Financial (not in order). Dividend payouts from these 5 companies accounted for 45.2% of our June dividend income, or $764.32.

 

Dividend Income Breakdown

We hold our dividend stocks in taxable accounts, RRSPs, and TFSAs. Every year, we maximize tax-advantaged accounts first before investing in taxable accounts.

For June 2018 dividend income, here’s the breakdown of the different accounts:

  • Taxable: $495.92 or 29.3%
  • RRSPs: $680.97 or 40.3%
  • TFSAs: $513.93 or 30.4%

Effectively, only 29.3% of our June dividend income was taxable.

We constructed our taxable accounts so we only receive from stocks that pay out eligible dividend income. Since we plan to live off dividend income when we are financially independent, we want to construct our portfolio to be as tax efficient as possible. This way, we can minimize income tax during financial independence.

 

Dividend Growth

Compared to June 2017, we saw a respectable YOY growth of 24.92%!

That is the highest YOY number so far in 2018. I’m extremely happy and excited to see that we did so awesome in this performance matrix.

With 6 months in the book, we are averaging a YOY growth of 18.65%. In 2016, after 6 months, we had a YOY growth average of 20.52%. So clearly we are slowing down a bit when it comes to dividend YOY growth. However, as I have indicated many times before, this is a natural phenomenon for dividend growth investors as your dividend income increases.

 

Dividend Increases

So far in 2018, many dividend stocks that we own in our dividend portfolio have announced dividend payout increases.

  • Target raised its dividend by 3.23% to $0.64 per share.
  • Starbucks raised its dividend by 20% to $0.36 per share.

 

Dividend Stock Transactions

Because we had closed out a couple of positions in May, we had a higher than usual amount of cash on hand. So we paid attention to any significant price drops during June to see if we could purchase dividend paying stocks at a discount.

Lucky for us, we encountered a few opportunities to deploy the extra cash and added shares to two stocks that we already own.

  • Purchased 20 shares of Starbucks (SBUX)
  • Purchased 57 shares of Laurentian Bank (LB.TO)

After the June 19 earnings release, Starbucks’ stock price went down to nearly 20% from their recent highs. This mostly due to Starbucks gave a lower than expected growth in their guidance. On top of this bad news, Howard Schultz stepped down as executive chairman and CFO Scott Maw retired unexpectedly. However, in the earnings release, Starbucks did announce a $10B increase in their current share buyback program. This meant they are eligible to purchase up to $26B of the company’s stock. With Starbucks share price being close to the 52 week low, a buy-back program will generate some nice value and returns for shareholders.

For me, I see this price drop as a short-term pain. Starbucks appears to be growing nicely in Asia and the $8B retail distribution deal with Nestle will increase the accessibility of Starbucks products to customers. So we took a calculated risk and purchase a small amount of Starbucks shares and to cost average our cost basis.

Similarly, the price of Laurentian Bank has gone nowhere/downward since our purchase earlier this year. Since we already own quite a bit of the Big Five (and National Bank), we decided to purchase more Laurentian Bank shares to diversify our exposure in the financial sector and to cost average our cost basis.

 

Conclusion

So far in 2018, we have received a total of $8,829.71 in dividend income. It’s hard to believe with only 6 months in, we have already exceeded our 2014 dividend income total!

Mrs. T and I continue to be appreciative of our dividend income. Thanks to the dividend portfolio that we have been building over the last few years, our money is working hard for us so we don’t have to.

Gotta love that!

How was your June dividend income?

 

Written by Tawcan
Hi I’m Bob from Vancouver Canada, I am working toward joyful life and financial independence through frugal living, dividend investing, passive income generation, life balance, and self-improvement. This blog is my way to chronicle my journey and share my stories and thoughts along the way. Stay in touch on Facebook and Twitter. Or sign up via Newsletter