Dividend Income – November 2022 Update

Wow, it’s hard to believe that the holidays are just around the corner and a new year is almost upon us. Do you think time moves faster as you get older? I sure do! When I was much younger, a year felt like a long time but as I get older, a year seems to fly by quickly. Weird.

In November, Mrs. T and I went for a staycation in Vancouver by ourselves and celebrated my 40th birthday (a belated birthday celebration). For this staycation, we stayed at uber-fancy J.W. Marriott Parq by using Marriott Bonvoy points. Before checking in, I told the front desk that we were celebrating my birthday and the hotel surprised us by upgrading us to a one-bedroom suite and gave us a warm welcome.

That night, we went to Minami in Yaletown and had a very nice Japanese dinner. The food quality and service were excellent.

We also checked out the Beyond King Tut immerse experience exhibition, which was super cool and interesting.

I would love to see all the King Tut artifacts in person in Egypt one day in the future.

This year, instead of having the usual advent calendars, we decided to focus on experiences for the four advent Sundays. Since Christmas Eve falls on a Saturday, it means we had the first advent Sunday in November.

Despite living in Vancouver for many years, we have never been to VanDusen Botanical Garden’s Festival of Lights. So we booked tickets to check out the beautiful lights as part of the first advent Sunday experience.

We were all very impressed with all the lights and had a jolly good time at VanDusen. Kid 1.0 recently got very interested in photography so he took Mrs. T’s cameras and took A LOT of pictures.

Finally, to prepare for next year’s backyard garden harvest, Mrs. T and the kids planted garlic. Because we waited a bit too long this year, the ground was frozen solid so it took a bit of work.

Did you know that 80% of the world’s garlic came from China? Roughly 21 million tons of garlic were produced in 2020 to meet global demands! Can you imagine how much CO2 was produced from transporting all that garlic? Since garlic is so easy to plant, I think most people should consider planting some garlic themselves. If most of us can do this, it will cut down a lot of carbon.

Dividend Income – November 2022

In November we received pay cheques from the following companies:

• Apple (AAPL)
• AbbVie (ABBV)
• Bank of Montreal (BMO.TO)
• Costco (COST)
• Dream Industrial REIT (DIR.UN)
• Emera (EMA.TO)
• Granite REIT (GRT.UN)
• Metro (MRU.TO)
• National Bank (NA.TO)
• Omega Healthcare (OHI)
• Power Corp (POW.TO)
• Procter & Gamble (PG)
• RioCan REIT (REI.UN)
• Royal Bank (RY.TO)
• Starbucks (SBUX)
• SmartCentres REIT (SRU.UN)
• Verizon (VZ)

The 17 dividend pay cheques added up to $2,833.05. November is usually one of the low dividend months because not as many companies pay out dividends per the Canadian Dividend Calendar.

Overall, we are pretty pleased with our November 2022 dividend income, especially considering back in November 2021 we only received $1,913.03 in dividends.

In fact, when compared to the same month last year, we saw a mind-blowing YoY increase of 48.09%!

WOW, WOW, WOW!

If we look at the quarterly dividend income breakdown, the Q4 2022 dividend income bar is already getting really close to the dividend income from Q4 2021. With one more month to go, it’s pretty much a guarantee that we’ll crash the Q4 2021 numbers.

The real question is whether the Q4 2022 bar will be higher than the Q3 2022 bar. I’m optimistic that it will.

Out of the $2,833.05 received, $466.10 was in USD and $2,366.95 was in CAD. Or roughly a 20-80 breakdown. Despite wanting to increase our USD dividend income, it is difficult due to the lack of cash in our RRSPs (already maxed out for 2022) and the poor exchange rate.

Please note that we do not convert USD to CAD when reporting our dividend income. This is because we want to keep the math easy and avoid fluctuations in our monthly dividend income caused by changes in the exchange rate.

In case you’re wondering, the top five dividend payers from November were the Bank of Montreal, Emera, National Bank, Power Corp, and Royal Bank. The total from these five dividend payers was $2,114.88 and accounted for 74.6% of our November dividend income.

Dividend Reinvestment Plans

Each month, we reinvest our dividends by enrolling in drips whenever we’re eligible. Dripping allows us to dollar cost average over time without paying any trading commissions.

In November we dripped the following shares:

• 3 shares of Bank of Montreal
• 3 shares of Bank of Nova Scotia
• 2 shares of Emera
• 5 shares of National Bank
• 3 shares of Omega Healthcare
• 2 shares of RioCan REIT
• 4 shares of Royal Bank
• 5 shares of SmartCentre REIT

Thanks to DRIP, we added 25 shares for free in November and reinvested $1,838.02 of our November dividend income immediately. This corresponds to a DRIP ratio of 64.88%.

By enrolling in DRIP, we added $84.53 toward our annual dividend income.

Dividend Increases

In November, we were happy to see the following companies announcing dividend hikes:

• Waste Connections (WCN.TO) increased its dividend payout by 10.9% to $0.255 per share.
• Canadian Natural Resources (CNQ.TO) increased its dividend payout by 13% to $0.85 per share.
• Telus (T.TO) increased its dividend payout by 3.7% to $0.3511 per share.
• Granite REIT (GRT.UN) increased its dividend payout by 3.2% to $0.2667 per share.
• Canadian Tire (CTC.A) increased its dividend payout by 6% to $1.725 per share.
• Suncor (SU.TO) increased its dividend payout by 11% to $0.52 per share.

Phew, that was quite the list!

Thanks to these dividend hikes, we saw an organic dividend growth of $167.35 in November.

Combining dividend growth from DRIP and dividend hikes, we saw an increase of $251.88 toward our annual dividend income in November. At a 4% yield, that’s equivalent to adding $6,297 toward our dividend portfolio.

After 11 months, we successfully grew our annual dividend income by $2,931.82 without lifting a finger! Our money has been working hard for us so we don’t have to!

At a 4% dividend yield, it would take $73,295.50 of new cash to generate this amount of dividends.

$73,295.50. Let that number sink in. Our dividend snowball sure is getting bigger and bigger by itself!

Looking ahead

With 2022 about to end, we have been busy saving up money for the 2023 TFSA contribution room. Due to inflation, the 2023 TFSA contribution limit has been increased from $6,000 to $6,500. We’re looking forward to moving $13,000 in total toward our TFSAs on January 2nd and purchasing some dividend stocks.

For now, we haven’t put too much thoughts into what we will buy with our new TFSA contributions. To keep things easy, we probably will end up going with one of the top Canadian dividend stocks we already own.

On November 29, Royal Bank announced that it has entered an agreement to buy HSBC Canada for $13.5B. The deal is expected to close by late 2023. HSBC Canada had $134 billion in assets as of September 30, 2022, and approximately 130 branches and 4,200 employees. HSBC Canada’s banking segment accounts for roughly 2% of Canadian deposits and mortgages.

As Royal Bank shareholders, we like this acquisition A LOT! When this deal goes through, Royal Bank will become an even bigger bank by adding about 6% to its earnings per share in 2024.

In addition, last week Brookfield Asset Management completed its division into two publicly traded companies – Brookfield Corporation Inc. (BN.TO), and Brookfield Asset Management Ltd (BAM.TO). This is equivalent to a 4:1 split with BAM.A shareholders receiving 0.25 share of BAM.TO for each BAM.A share. BAM.A shares will then convert to BN.TO shares at a 1:1 conversion.

What makes this split very interesting is that BAM.TO intends to pay quarterly dividends equal to approximately 90% of its distributable earnings. The company also plans to grow the dividend by 15 – 20% annually. This should be a nice dividend pump compared to BAM.A.

As shareholders, we intend to keep shares in both companies for now and see what the dividends and profitability are like before deciding whether we are going to sell one of them or not. It’s most likely we end up keeping both companies in our dividend portfolio.

If the stock market remains volatile in 2023, it should provide some great buying opportunities for us and allow us to continue accumulating more shares of dividend paying stocks. Fingers crossed that the market will remain volatile next year.

Summary

After 11 months, we have received a total of $38,724.80 in dividend pay cheques. Thanks to this total, we exceeded our goal of $36,000 in dividend income for 2022 already. 🙂 Considering last December’s dividend income was $2,820.13, at this point, I think it’s safe to assume that we’ll end up with over $40,000 at end of the year.

If we use the average YoY growth rate of 37.85%, we’d expect about $3,800 in dividend income for December. If that is the case, we’d end up with over $42,000 in annual dividends for the year.

If that were to happen, that’d be absolutely amazing.

It would also mean that we fast-tracked our dividend income projection by a year. Who knows, maybe in 2023 we can receive over $50,000 in dividend income? We can dream right?

As usual, I like to put things into perspective. At $38,724.80, that’s the equivalent of…

• $115.94 per day or $4.83 per hour our dividend portfolio generated for us after 334 days.
• $158.06 per day of working wage, or an hourly wage of $19.76. This hourly wage would result in $41,100.80 after 52 working weeks.

Since we estimate that we’d need about $60,000 in dividend income to be financially independent, that’s equivalent to about $165 per day. We have a bit more work to do to hit this target. Can we hit this target by 2025 as we had planned? It’s looking quite possible.

As many readers may know, the last few years have been extremely challenging financially for many people. Therefore, I’d encourage readers to donate to their favourite local charities if they can. We have already donated money to the local food bank, Christmas bureau, and BC Children’s Hospital. Please help out people in need if you have the financial means.

Thank you!

Dear readers, how was your November dividend income?