Dividend Income – Sept 2016 Update

October is upon us and that means NBA and NHL seasons are just around the corner. I think this is the best time of the year when it comes to sports, as there is something to watch for all four major professional sports: MLB, NFL, NBA, and NHL. Too bad we don’t own a TV eh? This is when online streaming comes in handy.

October also means we have 3 more months to go before the end of 2016. It’s hard to believe that we are near the end of 2016. We saw a record dividend income of $1,115.20 in August. Will we see another record? Let’s take a closer look at dividend income from September 2016.

Dividend Income

In September we received dividend income from the following companies:

Pure Industrial REIT (AAR.UN)
Brookfield Renewable Partners (BEP.UN)
BP (BP)
Care Capital Properties (CCP)
Corus Entertainment (CJR.B)
Canadian National Railway (CNR.TO)
ConocoPhillips (COP)
Chevron (CVX)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
Dream Industrial REIT (DIR.UN)
Enbrdige (ENB.TO)
Evertz Technologies (ET.TO)
Fortis (FTS.TO)
H&R REIT (HR.UN)
High Liner Foods (HLF.TO)
Intact Financial (IFC.TO)
Intel (INTC)
Inter Pipeline (IPL.TO)
Johnson & Johnson (JNJ)
KEG Income Trust (KEG.UN)
McDonald’s (MCD)
Manulife Financial (MFC.TO)
Magna International (MG.TO)
MCAN Mortgage Corp (MKP)
Prairiesky Royalty (PSK.TO)
Qualcomm (QCOM)
Royal Dutch Shell (RDS.B)
RioCan REIT (REI.UN)
Saputo (SAP.TO)
Suncor (SU.TO)
Target (TGT)
Unilever (UL)
Visa (V)
Ventas (VTR)
Vanguard Can All Cap (VCN.TO)
Vanguard All-World Ex Canada (VXC.TO)
WestJet (WJA.TO)
Waste Management (WM)
Wal-Mart (WMT)

Wow what a list! In total we received $1,074.16 in dividend income in September 2016. I can’t believe that we received dividends from a total of 40 companies! Talk about income diversification. We received a total of $333.15 in US currency and the rest, $741.01, was in CAN currency. This was about a 30-70 split like what we saw in August 2016. 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 came from Manulife Financial, Enbridge, Suncor, Chevron, and Intact Financial. The top 5 payouts correspond to about 33.5%of our September dividend income. The 6th to 15th top contributors were close in terms of the dollar amount as well. This is an indication that our September dividend income was truly well diversified.

Why is having a well diversified dividend income important? Because when bad times come and one of the companies decide to cut or freeze dividends, our dividend income won’t take as big of a hit. This is exactly what we experienced when the likes of Kinder Morgan, Potash, Dream Office, and Husky Energy decided to cut or freeze their dividend payments. Yes a decrease in dividend income sucks but when these cuts or freezes only impact our annual dividend by less than 2%, that’s a win in my book.

tawcan-dividend-income-sept-2016

Dividend Growth

Compare to Sept 2016, we saw a 30.25% YOY increase. I was completely shocked to see such high YOY increase, especially considering that we received $824 in dividend income last September. I suppose this is a result of us investing $45k of new capital into our dividend portfolio so far in 2016. Definitely very happy to see our progress so far.

dividend-income-yoy

It’s pretty cool to see that we are averaging 24.17% YOY increase comparing 2015 to 2016. Hard to believe September’s YOY increase of 30.25% wasn’t even the highest that we saw this year. The 42.76% that we saw in June was absolutely ridiculous!

Quite a few readers commented (thank you for all your comments) in my recent post of The impending doomsday AKA bear market that they are turning off dividend reinvestment and holding on cash instead. For now we are still DRIPing whenever we can. The way I see it, if the stock price goes banana, dividend amount that we receive will be less than the stock price, so we won’t be able to DRIP. Essentially we would be receiving the entire dividend payment in cash. In recent months, some of the stocks that we enrolled in DRIP have gone bananas, hence dividends received were no longer sufficient to buy 1 share of the stock. That means cash reserve for us, thank you very much.

tawcan-dividend-income-sept-2016-chart

 

Dividend Increases

In September a number of companies that we own in our dividend portfolio announced dividend increases:

  • Fortis increased dividend by 6.7% to $0.40 per share
  • Verizon increased dividend by 2.21% to $0.5775 per share
  • McDonald’s increased dividend by 5.62% to $0.94 per share

These announcements meant our forward dividend has increased by $24.65. It’s a small amount of dividend increase but I am not complaining. To add $24.65 in forward dividend, we would have to make an investment of $821.67 given a 3% dividend yield. Getting paid and getting a raise for doing absolutely nothing? Sign me up!

Conclusion & Moving Forward

This is the 7th month that we received over $1,000 in dividend income. Looks like $1,000 per month will be the norm, which is comforting. At $20/hr, that means each month we are able to save ourselves from needing to work 50 hours. That’s equivalent of 1 week and 1.25 days of work (at 8 hours a day). Needless to say, I’m very happy to see such progress.

So far in 2016 we have received $9,213.31 in dividend income. At this time, it looks like it will be challenging to achieve our goal of receiving over $13,000 in dividend income this year. I knew it would be a challenge when we first set the goal at end of 2015 as it meant a YOY increase of about 26%. Regardless, both Mrs. T and I thought we could do it. To meet this challenging goal, our annual dividend income should be around $9,750 at end of September . This means that we are $536.17 or about 5.5% behind target. It will be challenging to make up this 5.5% difference with only 3 months to go. Having said that, if we continue the 24% YOY average, we would be on track to receive a total of $12,794.34 in dividend income, which would be pretty AWESOME still. Can we keep up the 24% growth or achieve something even higher? We will have to wait and see. šŸ™‚

Dear readers, how was your September dividend income?

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33 thoughts on “Dividend Income – Sept 2016 Update”

  1. Nice dividend income Tawcan! I can see the advantages of being so diversified if a company cuts dividends!

    Don’t feel too bad about missing your goal – I’m going to miss my dividend goal by a lot. I projected $48k in dividends, but will probably only get to $43k this year.

    Prices just seem a little too high to invest all my excess cash.

    Reply
  2. A thousand bucks a month! That’s rad. We clear a lot less in dividends with our indexing strategy, which always makes me a bit jealous of the dividend investors. Love hearing about other paths to Rome. šŸ™‚

    Reply
    • Hi Done by Forty,

      Index ETFs do not pay as much dividends but they pay some too. As long as you’re executing your investing strategy, we can all get to FI, just a slightly different path.

      Reply
  3. Wow that’s an explosion in passive income from 2011. You’ve come such a long way and have a lot more passive income to collect, I’m guessing šŸ™‚ dividend income blogs are selling me so much on investing in DGI stocks..

    Reply
  4. Congrats Tawcan!

    I wish one day I will get such high income from dividends šŸ™‚

    I am wondering… having dividends from 40 companies in one month isn’t too much time consuming when it comes to analyzing/tax issues/monitoring etc? I see the point in diversification, but I have read somewhere that when portfolio is bigger than 30 marginal benefits from adding one more company to diversity portfolio is virtually zero…

    Anyway, congrats!

    Reply
  5. Tawcan,

    NICE!! Cruising over 4 digits yet again and a HUGE 30%+ dividend increase, great job over there. Also 40 companies is insane, haha, so awesome. You just may still get there, I have a strong feeling your November & December will be huge! Keep it up and thanks for sharing.

    -Lanny

    Reply
  6. Tawcan, excellent month again, and it is great to see you consistently getting over $1000 per month. I think I will be there by the 2nd QTR or next year as well…once my next rental property becomes active that is. I love your YoY analysis. Most people do it, but yours is very thorough. I’m actually only about 5 months into the start of my site, so I will have to wait to add that piece of commentary. And best of luck on stretching for your goal. Mine was $10k, and I think I may come up short as well. Oh well. Thanks for sharing!

    Reply
  7. A truly inspiring amount of income! I am actually inspired to reach what you have reached – there’s a long way to go though!

    I’m impressed that you’ve invested so much new capital during the year so far, it takes belief and bravery to keep going, when others are leaving the DGI field.

    I hope you get as close to your target as possible, good luck šŸ™‚

    Tristan

    Reply
  8. Congrats on that awesome total and record dividend income received. That chart above paints a very nice picture and seeing so many months of four digit dividend income received keeps pushing me towards my next long term goal of averaging $1k a month. As always, a nice long list paying you in September. Keep pushing for another quarter whether it’s by reinvesting or collecting cash for a ‘rainy’ day to pounce on. Thanks for sharing.

    Reply
  9. I like your thinking and how you look at dividend income in terms of hours you would need to work to generate that level of income. Something everybody needs to consider when they are thinking of buying some luxury item that they don’t really need. What is the cost of the item in terms of hours worked? I think this would change the purchasing decision in many cases.
    Also nice to see how the dividend increases are exceeding the cost of inflation.
    Nice job!

    Reply
    • Hi Mike,

      It’s definitely a great idea to think about how many hours you need to work on a specific item that you want to purchase. This way of thinking has definitely stopped me from buying a few things. The trick is to calculate the after tax hourly wage.

      Reply
  10. Great stuff Tawcan,

    Your $13000 target is definitely still within reach, usually more companies have their dividend payout during Q4 (based on my limited observation, no scientific facts XD). Well, never hurt to set the bar higher.

    Cheers,

    Jack

    Reply
    • Hi Jack,

      Some companies like KO pay dividends in December instead of Jan so it’s possible that we might reach the $13k goal. We’ll have to wait and see. šŸ™‚

      Reply
      • My income isn’t high like some peoples. So I find it not necessary yet to invest alot in my RRSPs. Hence I’ve been just buying Canadian stocks in my TFSA and Non-reg. So i am pretty much 100% Canada. Whats your opinion on that?

        Reply
        • Hi Steve,

          It’s fine having 100% Canada if you’re just starting out but I believe it’s extremely important to have some geographical diversification. Hence investing in US or other non-Canadian stocks is a good idea. Although not preferred, you can always invest in US stocks with non-registered accounts. It just means that you will lose 15% of the dividend income due to witholding taxes and the US dividend income will be treated as regular income rather than getting preferred dividend tax treatment. However you do end up getting some tax credits.

          Reply

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