Dividend Income Update – Jan 2020

Wow, the first month of the new year just flew by! In early January, we flew from Copenhagen back to Vancouver. Originally we were scheduled to fly with Iceland Air by connecting via ReykjavΓ­k. But due to a major snowstorm, our original flights got cancelled, and we were rerouted to connect Toronto via Air Canada. Unfortunately, the CPH -> YYZ -> YVR route meant spending an extra 3 hours in the air compared to the original flight. Somehow the kids stayed up for the entire flight so, by the second flight, they were overtired (it was past midnight Copenhagen time) and ended up having nightmares on the flight (i.e. kicking & screaming).

After having 14 flights in 12 days in December and spending over 147 hours in the air in 2019, I was happy to stay on the ground for most of January. I’m not quite sure what my work travel plans are for February but I sense some air travel might be coming up for me…

January Dividend Income

In January 2020, we received dividend payments from the following companies:

  • BCE Inc (BCE.TO)
  • Bank of Nova Scotia (BNS.TO)
  • CIBC (CM.TO)
  • Canadian Natural Resources (CNQ.TO)
  • Dream Office REIT (D.UN)
  • Dream Industrial REIT (DIR.UN)
  • H&R REIT (HR.UN)
  • Inter Pipeline (IPL.TO)
  • KEG Income Trust (KEG.UN)
  • Nutrien Ltd (NTR.TO)
  • Prairiesky Royalty (PSK.TO)
  • Rogers (RCI.B)
  • RioCan REIT (REI.UN)
  • SmartCentres REIT (SRU.UN)
  • Telus (T.TO)
  • TD (TD.TO)
  • TC Energy Corp (TRP.TO)
  • Domtar Corp (UFS.TO)
  • Vanguard Canada All-Cap ETF (VCN.TO)
  • Ventas (VTR)
  • Wal-Mart (WMT)
  • iShare Ex Canada ETF (XAW.TO)
Tawcan dividend income Jan 2020 chart

In total, we received dividend payments from 22 companies which added up to $2,249.72. This was a great start to the new year as this was the highest monthly amount ever since we started investing in dividend-paying stock since 2007. Amazing stuff!

This month was a month that was heavy on CAD dividend payments. We only received $24.34 in USD dividend and the rest was all in CAD. Please note, we use a 1 to 1 currency rate approach. We do not convert dividends received in USD to CAD, because we want to keep the math simple. This is our way to avoid fluctuations in dividend income over time due to changes in the exchange rate.

The top five dividend payouts in January 2020 came from BCE, CIBC, TD, Inter Pipeline, and Bank of Nova Scotia (not in order). These five companies’ dividend payouts accounted for $1,374.66 or 61% of our January dividend income.

Dividend Growth

Compared to January 2019, we saw an amazing YoY growth of 39.79%!!! Holy cow, what a way to start the new year eh?

Tawcan dividend income Jan 2020 YoY growth

Given we had an extremely ambitious and challenging dividend goal of $30,000 for 2020, it means we need to maintain a growth of at least 30.16% for the entire 2020. This isn’t going to be an easy task!

Dividend Increases

The following companies announced dividend increases in January:

  • Canadian Utilities increased dividends by 3% to $0.4354 per share.
  • Brookfield Renewable Energy increased dividends by 5% to $0.5425 per share.
  • Metro increased dividends by 12.5% to $0.225 per share.
  • Canadian National Railway increased dividends by 7% to $0.575 per share.
  • Intel increased dividends by 4.8% to $0.33 per share.
  • Exco Technologies increased dividends by 5% to $0.095 per share.

All these raises have increased our forward-looking dividend income by $61.46. It’s not as good as the $291.22 raise we received in Dec 2019, but I’ll take a small raise over no raise at all.

Dividend Stock Transactions

I hinted in our Dec dividend income update that we will be busy in January and I sure wasn’t kidding! We had a crazy month in terms of dividend stock transactions.

One of my goals for 2020 is to reduce the number of stocks we hold in our dividend portfolio. We were previously holding more than 60 individual dividend-paying stocks and I would be the first one to admit that is too many. I hope to reduce that number to 50 by the end of this year.

With that in mind we closed out our position for the following stocks:

  • Evertz Technologies (ET.TO)
  • Chevron (CVX)
  • General Mills (GIS)

I decided to sell Evertz Technologies and General Mills mostly because the two companies haven’t had any dividend increases in the last couple of years. The stock price also hasn’t done too much. I figured my money can work harder somewhere else.

I have wanted to sell Chevron shares for a while now but never managed to pull the trigger. If you look at our dividend portfolio, you’ll see I am trying to get away from investing in cyclical oil-producing companies. Instead, I think there are better upsides with pipeline companies.

I think I made the right decision to close out these three positions but I suppose time will tell.

With our 2020 watch list in mind, the proceeds from these three transactions, the new TFSA contributions, and some additional capital contributions in RRSP and taxable accounts, I then purchased the following stocks throughout January:

  • 12 shares of Canadian National Railway (CNR.TO)
  • 450 shares of European Residential REIT (ERE.UN)
  • 260 shares of Brookfield Property Partners (BPY)
  • 100 shares of Brookfield Renewable Partners (BEP)
  • 20 shares of Pepsico (PEP)
  • 14 shares of Bank of Montreal (BMO.TO)
  • 68 shares of TD Bank (TD.TO)
  • 450 shares of Inter Pipeline (IPL.TO)

The sale of the three stocks and the purchase of eight stocks increase our annual dividend income by $1,305.15. At 4% dividend yield, that’s an equivalent of adding $32.628.75 of fresh capital.

We already own Canadian National Railway, Brookfield Renewable Partners (Canadian shares), Bank of Montreal, TD Bank, and Inter Pipeline. So we are simply adding more shares to these stocks as I see good future growth for every single one of them.

We hold Brookfield Renewable Partners in the Canadian shares (BEP.UN). I purchased the US shares this time as a way to collect dividends in USD.

I purchased European Residential REIT because the company has been buying up apartments in the Netherlands. The numbers are showing some fantastic growth potential. In other words, this is a potential growth play since the dividend yield isn’t very high and the dividend history has not been consistent. I wanted to invest in a smaller REIT stock since we already own big REITs like RioCan, H&R, and Dream Office. Another reason for picking up a smaller REIT is that there is a greater chance of it getting acquired in the future. We used to own AAR.UN and DRG.UN and both companies were acquired, and we received a sizable profit because of that. Maybe ERE.UN will do the same, we’ll have to wait and see.

I picked up Brookfield Property Partners to increase our exposure in the REITs sector. BPY price hasn’t done much in the last little while. With a 7+% dividend yield, I can wait for the stock price to recover and collect dividends in the meantime.

When it comes to Pepsi, this is a stock I’ve wanted to own for a very long time. At a PE ratio of ~16 and a ~2.8% dividend yield, I am happy that we finally own part of Pepsi. Owning both Pepsi and Coca-Cola means that we now own a big portion of the beverage business sector.

Summary

With one month down, we received $2,249.72 in dividend income, only $27,750.28 more to go to meet our annual dividend goal of $30,000.

Tawcan dividend income Jan 2020 summary

I was extremely pleased that we broke our all-time monthly dividend income record in January 2020. With a significant amount of dividend stock transactions in January, it should propel us to even higher monthly dividend income amounts for the rest of 2020.

At $40 per hour, it means we already saved over 56 hours of work hour or 7 days. It’s an amazing feeling to know that our money is working hard for us so we don’t have to.

Dear readers, how was your January dividend income? Did you purchase any stocks?

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21 thoughts on “Dividend Income Update – Jan 2020”

  1. very nice Bob

    That is a tonne of flying man, crazy stuff..

    Got to love that growth year over year. 40% on these numbers is crazy and congrats on a new all time record.

    Gis is one I have debated selling as well. I’ll hold it now and see what happens this year. I really like that blue buffalo purchase. The lack of dividend raises makes me question it though.

    I just sold our position in cvs for that exact reason. Great additions to the portfolio, added a tonne to that forward income. Surely you will surpass this record later in the year.

    keep it up, incredible stuff
    cheers!

    Reply
  2. Congratulations Bob! You have really grown your dividends. You will be able to be financially independent soon!

    I also had to fly in January to London for work, I’m still researching how to offset the CO2 from the flight. For last year I used less.ca, which was endorsed by Suzuki and Air Canada. This year I’m considering treecanada. Have you looked into this?

    Vox had a good educational piece on the topic, check it out.

    Reply
  3. I am wondering about your geographic asset allocation? I understand that you have them all in different accounts based on taxation. But roughly & overall speaking, how much is your portfolio invested in Canada, U.S and the rest of the world, if you don’t mind sharing?

    Do you also hold any bonds at all? Or you are 100% stocks? I assume your own house is considered your bond portion mostly (a lot of people do).

    Reply
    • About 355% of our portfolio is international (US and ROW). It’s a bit hard to separate US vs. ROW, since we hold many US dividend stocks that are “international” and XAW, is mostly invested in the US too.

      We hold some bonds through my work’s RRSP account but that amount is pretty small.

      Reply
  4. i mean, come on man. That is a lot of dividend income right there. Congratulations on the excellent month. What I love most is the activity that will help set you up for future successful growth. Those dividend increases, those purchases. Man this was a lot of fun to read. Keep it up and keep on motivating.

    Bert

    P.S. Hopefully you earned a ton of frequent flyer models. That is a lot of air time.

    Reply
  5. Wow! you’re rocking the gains, way to go!! Your year over year is impressive but also love what you’ve accomplished since 2011. You’re certainly on track for a very comfortable retirement my friend. Best wishes and continued success on your personal journey! AFFJ

    Reply
  6. Wow, Tawcan! That’s quite the haul of dividends. Nearly $2,300 is more than enough to cover my entire expenses. And almost a 40% YoY increase at this level. I like your holdings too. I’m holding CM, BNS, and RCI.B.

    Reply
  7. Over $2,000 in a month from passive income is nothing to sneeze at Bob! Congrats. You guys just keep growing that dividend income year after year.

    You guys are doing great! Keep up the hard work!

    Reply
  8. This is awesome bob.

    Really trying to take after you and build up my dividend portfolio so that I have a good stream of passive income (except im more investing in the US and HK stock markets).

    May I ask what the value of your entire portfolio is right now? That would be a great insight as to what it takes to get the kind of Dividend income you currently generate..

    Reply

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