Ding ding ding! It’s that time of the month again! Please come and join me in the happy dance and let’s move our hands in the air like we don’t care. Yup, it’s time to post an article on our dividend income for the month of September 2015. We love dividend income because the money keeps rolling in regardless how the market is doing. As long as the companies continue paying dividends, we’re golden. Although we went on a 2 week Japan vacation and didn’t pay attention to how the stock market did at all, we still got paid. How awesome is that? Our goal is to have dividend income covering the majority or all of our expenses one day. When that happens, we are financial independent and can live off our dividends. Some of you have been asking what our magic dividend number is to cover our expenses. To be conservative, $3,500 per month should be sufficient, less if we include other sources of passive income. This number does include putting money aside for investments and other savings like education for Baby T. Of course, since nothing is written in stone, this magic number can change. If you want to read more about how we plan to live off our dividends and some of the assumptions that we are making, check out this great interview I did with My Own Advisor.
For some reason, September is typically the quieter month for us but I was pleasantly surprised to see how many companies paid us dividend in September 2015. Here’s a list of stocks that we received dividends in September 2015:
Pure Industrial REIT (AAR.UN)
BP plc (BP)
Care Capital Properties (CCP)
Chorus Aviation Inc (CHR.B)
Corus Entertainment (CJR.B)
Canadian National Railway (CNR.TO)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
Energyplus Corp (ERF.TO)
Evertz Technologies (ET.TO)
H&R REIT (HR.UN)
Intact Financial (IFC.TO)
Inter Pipeline (IPL.TO)
Johnson & Johnson (JNJ)
KEG Income Trust (KEG.UN)
Liquor Store (LIQ.TO)
MCAN Mortgage Corporation (MKP.TO)
RioCan REIT (REI.UN)
Royal Dutch Shield plc (RDS.B)
Unilever plc (UL)
Waste Management (WM)
Phew what a list! In September we received a total of $824.69 in dividends from 32 companies with $275.17 in US currency and $549.52 in Canadian currency. Please note, we use a 1 to 1 currency rate approach, so we do not convert the dividends received in US currency into Canadian currency. We’re doing this to keep the math simple and avoid fluctuations in dividend income over time due to changes in the currency rate.
Looks like I was completely wrong when saying that September is a slow month! Sure we couldn’t keep the over $900 dividend income streak going, but what’s not to love about getting close to $850 in dividend income for doing absolutely nothing at all? Although our portfolio value has decreased due to the current market environment, we are still getting solid dividend income. This is why I love dividend growth investing so much. I get to see solid result each month. It’s that simple.
It’s really neat to see that we received dividends from a record 32 different companies. We are certainly generating dividend income from multiple sources. It’s also interesting to note that we received a lot of dividends from energy companies. We are well exposed to the energy & gas sector but have been adding new capital to take advantage of this discounted sector. Where do I think about this sector? We all know that the energy & gas sector has taken a beating so far this year but it appears that there have been some recoveries recently. The demands for oil appear to be slowly growing worldwide. According to oil demand statistics collected by the Joint Organization Data Imitative (JODI), oil demand rose 3.3% in the first half of 2015, compared to the same period in 2014. This data comes from 59 countries which accounts for about 80% of the world’s oil consumption. Having said that, we need to see what happens in China since China is a big player when it comes to oil consumption.
Compared to dividend income from September 2014, we saw a 29.2% YOY growth. I’m actually quite surprised by this number to be perfectly honest. Thanks to our purchase of 16 shares of Ventas back in August and the spin off of Care Capital Properties, we received additional $13.96 US in dividend income this past month. It’s a small amount but considering the two companies are planning to growth dividend payout at +10%, we will see this income grow over time.
While majority of the dividend growth is a result of adding more capital into our dividend portfolio, the growth also comes from companies increasing their dividend payout. Companies like Suncor, Saputo, and ConocoPhillips have increased their payout compared to a quarter ago. We are also improving our dividend growth rate by enrolling in synthetic DRIP and buying additional shares automatically with dividends received. For example, we’re buying 1 share of H&R REIT (HR.UN) each month from dividend received. In 10 months we have already increased dividend received from HR.UN by 2.5% compare to beginning of the year. Although a small number, everything does add up in the long run.
So far this year we’ve received a total of $7,474.53 in dividend income. If we put that into perspective, at $20/hour, that means we’ve saved the need of working actively for 374 hours, or 15.5 days! That’s 15 days that we can use to enjoy life, like going for a vacation in Japan.
The big question now is are we going to be able to receive over $10,000 in dividend this year. Looking at our past month dividend incomes in 2015, I think we should be able to. At $7,474.53, that’s only 25.25% to go. Hitting this 5 digit milestone will certainly be a huge accomplishment for us.
Thank you for reading and for your continued support. How was your September dividend income?