June is here and we are finally getting summer weather in Vancouver. As you can see from pictures below, things are growing nicely in our garden. We are spending more and more time outside tending the garden and the yard. Baby T1.0 planted some peas and daikons in the garden in the spring and he is very excited about his growing plants.
When it comes to our stock investments, they take less time and attention compared to our garden & yard. For the most part, we have been putting our dividend portfolio on auto-pilot. We continue to buy dividend stocks whenever we see something at a discount and we continue to DRIP away on eligible stocks. Investment life is pretty simple this way.
The one thing I have been thinking lately is whether to trim down our portfolio holdings. As of today we own 72 dividend stocks and 2 index ETFs. I never had an “ideal number” in mind but perhaps 70+ individual dividend stocks is too many. We can probably consolidate a few positions. Does it make sense to hold the likes of Wal-Mart and Target given that online retailing is getting stronger and stronger? Maybe it’s time to sell Chevron and Kinder Morgan and forget about oil price recovery?
On the other hand, the benefit of having a portfolio with a large amount of stocks means we are not relying on one or two stocks for dividend income. What is your view on this on number of dividend stocks to hold? I would love to hear it.
May Dividend Income
In May 2017 we received dividend income from 25 companies:
- AbbView (ABV)
- Apple (AAPL)
- Pure Industrial REIT (AAR.UN)
- Bank of Montreal (BMO.TO)
- Corus Entertainment (CJR.B)
- Dream Office REIT (D.UN)
- Dream Global REIT (DRG.UN)
- Dream Industrial REIT (DIR.UN)
- Emera (EMA.TO)
- Enbridge Income Trust (ENF.TO)
- General Mills (GIS)
- H&R REIT (HR.UN)
- Inter Pipeline (IPL.TO)
- KEG Income Trust (KEG.UN)
- Kinder Morgan (KMI)
- National Bank (NA.TO)
- Omega Healthcare (OHI)
- Procter & Gamble (PG)
- Potash (POT.TO)
- Prairiesky Royalty (PSK.TO)
- RioCan REIT (REI.UN)
- Royal Bank (RY.TO)
- Smart REIT (SRU.UN)
- AT&T (T)
- Verizon (VZ)
In total we received $1,199.31 in dividend income.
Ah, so close to $1,200, we were only off by $0.69! Oh well, hopefully we will cross the $1,200 mark again this month.
Out of the $1,199.29 dividend income that we received in May, $302.95 was in USD and $896.36 was in CAD. Please note, we use a 1 to 1 currency rate approach. Therefore, 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 May 2017 were Bank of Montreal, National Bank, Royal Bank, Omega Healthcare, and Procter & Gamble. The top 5 payouts accounted for 58.98% of our May dividend income.
Compared to May 2016 we saw a YOY growth of 18.18%. This performance matrix is a bit lower than expected. This is an indication that we need to work on adding more fresh capital to increase our dividend growth. Another area to focus on is owning stocks with high organic dividend growth. Rather than owning on high yield stocks with very little organic dividend growth, we should focus more on owning lower yield stocks with higher organic dividend growth.
After 5 months, we are tracking an overall 21.97% YOY growth rate. It would be great if we can continue to hold the overall YOY growth rate at above 20%.
In May a number of companies that we own in our portfolio announced dividend increases:
- Apple raised its dividend by 10.53% to $0.63 per share
- Hydro One raised its dividend by 4.76% to $0.22 per share
- Enbridge raised its dividend by 4.63% to $0.583 per share
- Telus raised its dividend 2.60% to $0.4925 per share
- Bank of Montreal raised its dividend 2.27% to $0.90 per share
- National Bank of Canada raised its dividend 3.57% to $0.58 per share
All the raises have increased our annual dividend income by $89.03.
Dividend Stock Purchases
In May we made one single purchase. We purchased 32 shares of Canadian Imperial Bank of Commerce (CM.TO). The purchase added $162.56 toward our annual dividend income.
CIBC currently has the lowest PE ratio out of all 5 major Canadian banks. This is mostly due to the uncertainties in the Canadian housing market and CIBC’s bid on PrivateBancorp. CIBC hiked up the bid for PrivateBancorp recently as an incentive to close the deal. I am optimistic that this deal will complete which will increase CIBC’s US exposure. While there are a lot of uncertainties in the short term, I believe CIBC will weather the storm and has a positive future outlook.
We had yet another great month for dividend income. It would have been nice to get over $1,200 in dividend income but we were very close regardless.
So far in 2017 we have received a total of $5,887.33 in dividend income. The plan is to hit $15,000 in dividend income for 2017. Therefore, we are slightly behind on this plan. However, this was a very ambitious plan/goal so if we close by end of the year, I would still be very happy.
Dear readers, how was your May dividend income?