Dividend Income- September 2021 Update

Mrs. T and I are very glad that school is back. We can finally sit down together and have afternoon coffee hygge without kids climbing all over us on weekdays!

Fall also means more backyard garden harvests. As you can see from below, we have our own pumpkin patch this year with a hefty harvest. Surprisingly, there are more pumpkins in the garden we need to harvest later. I guess we’ll be having a lot of pumpkin soup, roasted pumpkins & pumpkin seeds, and pumpkin pies this fall.

We also have been busy harvesting tomatoes, cucumbers, and potatoes.

The fall rainy season also means we have been busy making delicious homemade items…

Scouting has also returned too. Baby T1.0 “graduated” to Cubs and Baby T2.0 started Beavers. I am volunteering as a leader for both Cubs and Beavers. This means 2.5 hours of meeting time each week plus all the pre-meeting planning. Scouting should keep me pretty busy for the entire school year.

I went through Scouting myself for over ten years as a youth, earning the Chief Scouts Award, the Queen Venturers Award, and all three levels of the Duke of Edinburgh’s Award. I have had a fabulous experience with Scouting and some very awesome memories. I wouldn’t be who I am today without my involvement in the Scouts. I am volunteering to be a Scouts leader not only to look after my kids, but also to share my knowledge with other youths and leaders, and to give back what I have received over the years.

Reaching financial independence is not about retiring early and do absolutely nothing. I truly believe it’s more than that. It’s about doing something extraordinary and providing a helping hand to your community.

Dividend Income – September 2021

In September we received dividend payments from the following companies:

• BlackRock (BLK)
• Brookfield Renewable Corp (BEPC.TO)
• Canadian National Railway (CNR.TO)
• Canadian Tire (CTC.A)
• Canadian Utilities (CU.TO)
• Dream Industrial REIT (DIR.UN)
• Enbridge (ENB.TO)
• European Residential REIT (ERE.UN)
• Fortis (FTS.TO)
• Granite REIT (GRT.UN)
• Hydro One (H.TO)
• Intact Financial (IFC.TO)
• Intel (INTC)
• Johnson & Johnson (JNJ)
• McDonald’s (MCD)
• Manulife Financial (MFC.TO)
• Magna International (MG.TO)
• Metro (MRU.TO)
• PepsiCo (PEP)
• Qualcomm (QCOM)
• RioCan REIT (REI.UN)
• SmartCentres REIT (SRU.TO)
• Suncor (SU.TO)
• Target (TGT)
• Unilever plc (UL)
• Visa (V)
• Waste Management (WM)
• Wal-Mart (WMT)

The 28 dividend paycheque added to $2,665.14, resulting in a fantastic month! The monthly dividend amount is quite a bit lower compared to a quarter ago (June) but that’s mostly because we received a sizable distribution from XAW.

Out of the $2,665.14 received, $448.88 was in USD and $2,216.26 was in CAD. Long time readers will know that we do not convert USD to CAD when reporting our monthly dividend income. We are doing this to avoid fluctuations in our monthly dividend income caused by changes in the exchange rate. So in reality, our monthly dividend income in CAD is a bit higher than indicated.

The top five dividend payers for September were Brookfield Renewable, Fortis, Enbridge, Manulife Financial, and Canadian Utilities (not in order). The top five payments added to $1,850.13 or 69.4% of our September dividend income.

Dividend Growth

After a negative YoY growth last month, we are back to positive! Compared to September 2020, we have a dividend YoY growth rate of 23.13%!

If we compare the nine months in 2021 to the same period in 2020, our overall YoY growth is 15.95%. Since we’re starting to hit the law of the big numbers, It is nice to see the overall YoY growth hovering just above 15%. We will be working hard to maintain this rate and hopefully get it closer to 20%.

Dividend Transactions

Every month we continue to save money and use that money to buy more dividend paying stocks. September was the same.

We purchased the following stocks in September:

• 126 shares of Telus (T.TO)
• 48 shares of VICI Properties (VICI)

We took advantage of the broad market pullback and added more Telus shares. I quite like Telus and its long term profitability potentials, especially considering Telus has a few possible spinoffs in the works that should boost its revenues and widen its moat.

Although I mentioned VICI Properties in last month’s dividend update, some readers may not be very familiar with the company. VICI Properties is an experiential REIT that owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations. Their portfolio includes the world-renowned Caesars Palace and Harrah’s. In total, the geographically diverse portfolio consists of 28 gaming facilities comprising 47 million square feet and features about 17,800 hotel rooms and more than 200 restaurants, bars, nightclubs, and sportsbooks.

I have been monitoring VICI Properties for a while and what really caught my attention was the announcement of a $17.8 billion strategic acquisition of MGM Growth Properties. This acquisition will incrementally improve VIC’s AFFO per share over time and provide significantly diversify its tenant concentration will reduce from 84% to 41%. Furthermore, this will lead to 84% of VICI Properties’ rent coming from S&P500 tenants with a 100% rent-paying track record throughout the COVID-19 pandemic.

More importantly, this acquisition will enhance VICI’s portfolio with 7 premier Las Vegas resorts including Park MGM, Excalibur, New York-New York, Luxor, The Mirage, MGM Grand, and Mandalay Bay. This means VICI will be owning key locations on the Las Vegas strip.

Although the COVID-19 pandemic rages on, I believe Las Vegas will continue to be an attractive tourist destination. Prior to COVID, many of my friends and co-workers frequently went down to Las Vegas to have a quick short vacation. The pandemic has put a stop to this trend but I think it will definitely return post-COVID. In fact, I have been reading news that Las Vegas is already quite busy nowadays.

In addition, this acquisition also gives VICI 8 marketing-leading regional properties in the US.

Is VICI Properties a risky investment? Possibly, but my initial investment is only a small fraction of our dividend portfolio so our risk is limited. I plan to continue monitoring VICI over the new few months and may considering buying more shares. I think VICI has a lot of future growth and I quite like the destination REIT niche that VICI is in.

In case you’re curious, you can read more about the acquisition here. Joseph Carlson has also put out a few Youtube videos about VICI Properties that I find quite interesting.

For October, we plan to add more dividend paying stocks and probably will focus mostly on Canadian dividend stocks like Bank of Montreal, National Bank, and Algonquin Power & Utilities Corp.

• Best Canadian Utility Stocks

On the US side, I continue to like Apple, VICI Properties, and Realty Income Corp.

Dividend Reinvestment Plans (DRIP)

Once we own a dividend paying stock, we add more shares over time so we are eligible to enroll in DRIP. By enrolling in DRIP, we can take advantage of dollar cost averaging and adding more shares without paying any trading commissions.

For the dividends not dripped right away, we let the amount accumulate until it’s over $1,000. Because there are trading commissions for Questrade and TD, when we buy something, we make sure the total transaction is more than $1,000, so the trading commission is less than 0.5% of the overall transaction cost.

• Questrade vs. Wealthsimple Trade review

For September we dripped the following shares:

• 2 shares of Brookfield Renewable Corp (BEPC.TO)
• 19 shares of Enbridge (ENB.TO)
• 1 shares of European Residential REIT (ERE.UN)
• 3 shares of Fortis (FTS.TO)
• 1 share of Hydro One (H.TO)
• 1 share of Intel (INTC)
• 6 shares of Manulife Financial (MFC.TO)
• 1 share of Rogers (RCI.B)
• 1 share of RioCan REIT (REI.UN)
• 3 shares of SmartCentres REIT (SRU.UN)
• 4 shares of Telus (T.TO)

In total, we dripped 42 more shares in September re-invested $1,708.92 of the September dividend income right away. In other words, we had a DRIP ratio of 64.1% in September.

Dividend Increases

It has been a few quiet months on the dividend increase front, so I was very happy to see a few dividend raises in September.

• Emera (EMA.TO) increased its dividend payout by 3.9% to $0.6625 per share.
• Fortis (FTS.TO) increased its dividend payout by 6% to $0.535 per share.
• Verizon (VZ) increased its dividend payout by 2% to $0.64 per share.
• McDonald’s (MCD) increased its dividend payout by 7% to $1.38 per share.
• Starbucks (SBUX) increased its dividend payout by 8.9% to $0.49 per share.

All these payout increases added $99.58 toward our annual dividend income. At a 4% dividend yield, this is the equivalent of adding $2,489.50 to our dividend portfolio. It’s nice to get a sizable pay raise without having to do anything.

Summary

So far this year, we have received a total of $22,774.79 in dividend income. By the end of October, our dividend income will definitely exceed 2019’s annual total. If we have a very strong dividend income in October (and all sign points to that), there’s a slight possibility that we might get very close to the 2020’s annual total too.

Needless to say, we have made significant progress over the last few years on our dividend income. Mrs. T and I are very pleased with our progress.

Since I like to put things in perspective, the dividend income received allows us to…

• Earning $3.49 per hour, an improvement of $0.05 per hour compared to last month.
• Earning $14.23 per hour after 40 working weeks. Considering BC’s minimum wage is $15.20 per hour, our “dividend wage” is getting very close to BC’s minimum wage. In actuality we are probably earning more given a large percentage of the dividend income is from TFSA and RRSP.

The stock market has been slightly volatile over the last month. While it is still hovering near all-time highs, we plan to purchase more dividend paying stocks when we have the money to do so and diversify through time. We believe that time in the market is far superior than timing the market.

Dear readers, how was your September dividend income?