Can you believe it was only last month when Donald Trump won the US presidential election? For some reason, I feel like the presidential result happened years ago. Weird eh? Since the presidential election, we have seen worldwide stock exchanges rallying. Will we have another 4 years of bull market? I guess we will have to wait and see.
To be honest, I don’t like to speculate or predict how the stock market would perform. In fact, I have rarely kept up with financial news. The other day my brother asked me about OPEC’s recent meeting decision over oil production and I simply replied “I think OPEC decided to cut oil production…but I could be wrong.” Rather than keeping up with all the daily news and market noises, I just keep executing our investing strategy – adding dividend paying stocks when they are on sale and collecting dividend income each month. My keep-it-simple investing strategy reminded me a debate that Mark from My Own Advisor and I had with another blogger on the merits of dividend stock investment at the 2016 Canadian Personal Finance Conference after party. Although all three of us believed in passive index ETFs investing and agreed that index ETFs offered more diversification (especially when it comes to international stocks), we had different views on dividend investing. Mark and I both liked the idea of relying on dividend income as the main source of retirement income rather than selling stocks. When you selling stock in retirement, you’re at the mercy of the market. Imagine if you retired in 2001 during the internet bubble or 2008 during the financial crisis and you were forced to sell part of your portfolio to sustain your expenses. That would have been tough to have to sell despite your portfolio value dropping 40% or more! Therefore, I will take secured dividend income over the need to sell stocks at a not-so-desirable price. Relying on dividend income doesn’t necessary mean we will never sell our dividend stocks. It simply means we can delay this process by using dividend income first.
Anyway, let’s take a look at our November 2016 dividend income.
November Dividend Income
In November we received dividend income from the following companies:
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)
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)
Prairiesky Royalty (PSK.TO)
RioCan REIT (REI.UN)
Royal Bank (RY.TO)
In total we received $1,077.06 in dividend income in November 2016 from 22 different companies. We received a total of $271.61 in USD and $805.45 in CDN. It’s nice to see that we have received more dividend income in US currency than last month. Please note, we use a 1 to 1 currency rate approach, so we do not convert the dividends received in US dollar into Canadian currency. Reason for doing this is to keep the math simple and avoid fluctuations in dividend income over time due to changes in the exchange rate.
The top 5 payouts were Royal Bank, National Bank, Bank of Montreal, Omega Healthcare, and Procter & Gamble. The top 5 payouts correspond to 62.6% of our November dividend income.
Dividend Income Growth
Compared to November 2015, we saw a 16.7% YOY increase. Certainly not one of the best YOY performance months in 2016 but still quite respectable growth considering we received over $900 in dividend income last November.
If you are wondering, our dividend growth is contributed by three things – investing fresh capital, purchasing of additional shares through dividend reinvesting plan (DRIP), and individual dividend stock’s organic dividend growth each year. We believe in utilizing the power of all three of these factor to grow our dividend income exponentially.
As you can see from the table above, our YOY increase average dropped from 23.19% to 22.61%. At above 22% YOY average is still quite reputable, given we received an average of over $850 in dividend income each month in 2015. Considering our December 2015 dividend income was almost $1,000 and we haven’t made any purchases in a few months, I am guesstimating that our YOY percentage growth for December to be around 15% range. This would put us on a ~21% YOY increase for the entire year of 2016.
Looking at the chart below it’s comforting to see how much progress we have made in the last 3 years. In 2016, we have more than doubled our monthly dividend income compared to 2013 monthly dividend income. I would be very pleased if we can double our dividend income in another 3 years (it is pushing it to double again in 2 years? We’ll see!).
In November a number of companies that we own in our dividend portfolio announced dividend increases:
- Starbucks Corp (SBUX) raised its dividend by 25% to $0.25 per share
- Canadian Natural Resources (CNQ) raised its dividend by 8.7% to $0.25 per share
I am very happy with these dividend increases because it means we will get paid $14.96 more moving forward. Getting a raise without having to go through a performance review? Sign me up!
Conclusion & Moving Forward
So far in 2016 we have received $11,373.84 in dividend income. To put this to perspective, it means at a $20 per hour wage ($41.6k per year), we have saved ourselves over 71 working days, or 14 weeks. Even at $100k annual salary ($48.08 per hour), we have saved ourselves almost 30 working days, or 6 weeks. Either way, our dividend portfolio has been working hard for us instead us having to physically work to generate income. I will always say yes to any forms of passive income.
Dear readers, how was your November dividend income?