Dividend Income – May 2018 Update

tea plantation in Taiwan

I’m currently in Taipei, Taiwan and I’m checking out many of the different Taiwanese dishes ranging from beef noodles soup, stinky tofu, egg roll pancake, minced & braised pork on rice, and many more. I’m in the hunt for Taiwanese deep fried meatballs (ba wans), not sure if I’ll be able to find them in Taipei though, as deep fried style was originated from central Taiwanese. In Taipei and northern Taiwan, ba wans are steamed rather than deep fried. In case you’re wondering what Taiwanese dishes are like, check out this guide.

So far on this trip, I have stayed at 5 different hotels and managed to get upgraded to a suite 3 times. Getting upgraded to a suite is really cool, as suites are HUGE, luxurious, a bit over the top. Unfortunately, I’m travelling alone so I’m actually not utilizing the suites all that much. In fact, when I got upgraded to a suite in Hong Kong, I didn’t even get a chance to sit on the couch. Oops.

Here are some pictures from the suite at Taipei Marriott:

Marriott Taipei suite

Opened my hotel room at Taipei Marriott and was greeted by this huge living room.

Marriott Taipei suite

This huge bathroom which was situated between the bedroom and the living room.

Marriott Taipei suite

The massive king size bed in the bedroom

Even when I didn’t get upgraded at a Courtyard, the room was still very luxurious. Definitely one of the nicest Courtyards I’ve stayed at.

Courtyard Taipei

A very nice and big room at a Courtyard. Please ignore the messy bed.

Hopefully, when I am travelling with Mrs. T and our two kids and staying at a Marriott property, we’ll get upgraded to a suite.

May Dividend Income

In May we received dividends from the following companies:

  • Apple (AAPL)
  • Pure Industrial REIT (AAR.UN)
  • AbbView (ABV)
  • Bank of Montreal (BMO.TO)
  • Costco (COST)
  • 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)
  • Laurentian Bank (LB.TO)
  • Metro (MRU.TO)
  • National Bank (NA.TO)
  • Omega Healthcare (OHI)
  • Procter & Gamble (PG)
  • Prairiesky Royalty (PSK.TO)
  • RioCan (REI.UN)
  • Royal Bank (RY.TO)
  • Starbucks (SBUX)
  • SmartCentres REIT (SRU.UN)
  • AT&T (T)
  • Verizon (VZ)

dividend income May 2018 chart

In total, we received $1,459.76 from 26 companies in May 2018. After 4 months of record-breaking levels of dividend income each and every month, we failed to break the all-time month dividend income record in May. Darn it! But at $1,459.76, this is the second highest monthly dividend income that we have ever received, only behind April 2018.

To put this into perspective, $1,400 is over half of the annual dividend income that we received in 2012.

We have come a long way since we started investing in dividend paying stocks.

So, I think we did extremely well in May. I’m ecstatic over the amount of dividend income we collected by simply owning dividend-paying stocks. I love getting paid for doing absolutely nothing.

Out of the $1,459.76 received, $334.04 was in USD and $1,125.72 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 May 2018 were Bank of Montreal, National Bank, Emera, Royal Bank, and Omega Healthcare (not in order). Dividend payouts from these 5 companies accounted for 60% of our May dividend income, or $875.14.

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

  • Taxable: $314.15 or 21.52%
  • RRSPs: $697.80 or 47.80%
  • TFSAs: $447.81 or 30.68%

Effectively, only 21.52% of our May 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 May 2017, we saw a respectable YOY growth of 17.84%. This was the third highest YOY number so far in 2018. I was a little bit surprised that we have managed to stay above 15% for 4 out of 5 months in 2018. Hopefully, we will continue to stay above the 15% mark for the rest of 2018. That would be very impressive if we manage to do that, considering our 2017 dividend income of $14,834.38 was pretty sizable already. If we could manage to get 15% YOY for the entire 2018, that would mean we would end up with $17,059.537.

dividend income May 2018 YOY growth

Dividend Increases

There are 3 ways to increase our dividend income. The first method is by investing fresh capital to purchase more dividend stocks. The second method is to enroll in dividend reinvestment plans (DRIP), and DRIP additional shares. The third method is through companies increasing their dividend payout. As dividend growth investors, we try to take advantage of all three methods.

When companies raise their dividend payout, that’s like getting a pay raise without doing anything extra. That’s why I get so excited whenever a company announces a dividend payout increase.

In May, a few companies that we own in our dividend portfolio raised their dividend payouts.

  • Telus raised its dividend by 3.96% to $0.525 per share
  • Hydro One raised its dividend by 4.55% to $0.23 per share
  • Bank of Montreal raised its dividend by 3.22% to $0.96 per share
  • National Bank raised its dividend by 3.33% to $0.62 per share

All these announcements increased our annual dividend by $62.96. If you think the amount is very insignificant, think again. At 3% yield, you would need to invest $2,098.67 worth of new capital to receive the same amount of additional dividend income. As I said earlier, when companies raise their dividend payout, it’s like getting a pay raise without doing anything extra. I will never say no to a raise!

Dividend Stock Transactions

Compared to the other months in 2018, we were relatively quiet in May when it dividend stock transactions. When I re-examined our dividend portfolio recently, I pointed out that it might be worthwhile to consolidate our holdings by trimming some of the smaller positions we own. Although we didn’t manage to purchase any dividend stocks in May, we managed to close out a couple of positions.

  • Liquidated all of our Sabra Health Care REIT (SBRA) shares
  • Received cash buy out for our Pure Industrial REIT (AAR.UN) shares

The shares of Sabra Health Care REIT were received from the Care Capital Properties merger. And we originally received a few shares of Care Capital Properties from the Ventas and Care Capital Properties split.

Blackstone had recently completed their purchase of Pure Industrial REIT. As shareholders, our shares were purchased back at a specific price, resulted in very a nice capital gain. Fortunately, we didn’t have to pay any capital gain tax as we held AAR.UN shares in our TFSA.

We only had a small amount of SBRA and AAR.UN, so we only lost less than $70 worth of annual dividend income. The dividend increases from Telus, Hydro One, Bank of Montreal, and National Bank roughly made up the difference. I do plan to deploy the cash that we received from these two transactions to purchase shares of dividend stocks that we already own. This will further increase our forward-looking dividend income.

Conclusion

So far in 2018, we have received a total of $7,138.89 in dividend income. At $25 per hour salary ($52,000 annual), that means we have already saved us over 356 hours worth of work. This is over  44 days of work or almost 9 weeks. Given there are 52 weeks in a year, that’s an equivalent of gaining 17.3% more time.

It’s pretty awesome to know that our money is working hard for us so we don’t have to.

Gotta love dividend income!

Dear readers, how was your May 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