Wow it’s hard to believe that 5 months have already been in the books for 2019. Where did the time go? Since it’s beginning of the month, it means it’s time for the monthly dividend income update! For those of you who are new here, I am doing these monthly updates to keep us honest and demonstrate that it is possible to build up a sizable dividend portfolio so it generates sufficient dividend income to cover our expenses. When our dividend income and other passive income exceeds our annual expenses, we can call ourselves financially independent. Pretty simple right?
Market was quite volatile in May, so we were busy adding our cash reserve and buying dividend paying stocks when we could. When the weather was nice outside in May, we spent a lot of time tending our backyard garden. The garden is growing nicely, and we anticipate strawberry harvest sometime in June.
One of the weekends in May, we went camping in Chilliwack Lake. The weather didn’t corporate as it rained both Friday and Saturday. Thanks to a large tarp that Mrs. T and I set up at our campsite, all of us managed to stay dry and enjoyed making smore for dessert. The kids particularly liked running around the exploring the campground and the lake.
While May was great, an unfortunate event happened to us. While visiting friends in Kelowna, we were involved in a hit-and-run overnight. From the video recording obtained from a neighbour, a white truck backed up into our car middle of the night and drove away without leaving a note. It was not possible to get the license plate from the video. So that means we have to pay a deductible of $500 to get our car fixed. Since the driver door is dented and the door handle is gone, we are forced to get the repair done. It’s crappy to get hit by an unexpected expense but luckily we have enough buffer in our budget to take on this unexpected expense.
In May, we received dividend income from the following companies:
- Apple (AAPL)
- AbbView (ABBV)
- Bank of Montreal (BMO.TO)
- Costco (COST)
- Dream Office REIT (D.UN)
- Dream Industrial REIT (DIR.UN)
- Dream Global REIT (DRG.UN)
- Emera (EMA.TO)
- General Mills (GIS)
- H&R REIT (HR.UN)
- Inter Pipeline (IPL.TO)
- KEG Income Trust (KEG.UN)
- Laurentian Bank (LB.TO)
- National Bank (NA.TO)
- Omega Healthcare (OHI)
- Procter & Gamble (PG)
- Prairiesky Royalty (PSK.TO)
- RioCan REIT (REI.UN)
- Royal Bank (RY.TO)
- Starbucks (SBUX)
- SmartCentres REIT (SRU.UN)
- AT&T (T)
- Verizon (VZ)
In total, we received 23 pay cheques that added up to $1,732.38. Over $1,700 of dividend income for doing nothing at all is pretty darn good, I have to say.
Of the $1,732.38 received, $383.17 was in USD and $1,349.21 was in CAD or about a 25/75 split. Please note, we use a 1 to 1 currency rate approach. We do not convert dividends received in USD to CAD. We are ignoring the exchange rate 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 5 dividend payouts in May 2019 came from Bank of Montreal, Royal Bank, National Bank, Emera, and Inter Pipeline (not in order). Dividend payout from these 5 companies accounted for $1,023.94 or 59.1% of our May dividend income total.
Compared to May 2018, we saw a YoY increase of 18.68%. This is the lowest YoY number we’ve seen so far in 2019. For some reason, May has historically been our lowest performance month of the year (if we ignore January and February). Still, 18.68% quite respectable as we are starting to face the law of large number. I am very pleased with our dividend growth for the month of May 2019.
In May a few of the stocks that we own announced dividend increases:
- Telus raised its quarterly dividend by 3.2% to $0.5625 per share.
- Hydro One raised its quarterly dividend by 5% to $0.2415 per share.
- Nutrien raised its quarterly dividend by 4.65% to $0.45 per share.
- Bank of Montreal raised its quarterly dividend by 3% to $1.03 per share.
- National Bank raised its quarterly dividend by 4.62% to $0.68 per share.
- Laurentian Bank raised its quarterly dividend by 1.54% to $0.66 per share.
This added $88.23 toward our annual dividend income. At 4% dividend yield, that meant we saved ourselves from needing to add $2,205.75 of fresh capital in our dividend portfolio. Instead, when we use $2,205.75 to purchase more dividend-paying stocks, we’d bring in an additional $88.23. This is why organic dividend growth is so powerful.
Dividend Stock Transactions
We did a house cleaning of our dividend portfolio in May, closing out a few underperforming stocks. With the liquidation of these dividend stocks, we decreased our annual dividend income by $500 (calculated before the recent dividend cuts). If we were to hold onto these stocks, we would have seen our annual dividend income cut by roughly $180.
Using the cash from the house cleaning and additional cash, we purchased the following dividend paying stocks in May:
- 248 shares of Inter Pipeline
- 10 shares of Apple
- 35 shares of Bank of Nova Scotia
These purchases added $576.68 into our annual dividend income. So in net, we added $76.68 with all these transactions.
After 5 months in 2019, we have received $8,939.99 in dividend income. This amount already exceeded our 2014 dividend, and over 50% of our 2014 dividend income. It’s amazing to see how far we’ve come since we got serious with dividend growth investing.
If we were to put the $8,939.99 into a quantitative perspective, at $40 per hour rate ($83,200 annually), that would mean we have been able to save ourselves over 223 hours worth of work or an equivalent of over 5.5 weeks. This is absolutely amazing!
Dear readers, how was your May dividend income?
PS. Plutus Award nomination is now open. If you’re a fan of this blog, I’d really appreciate if you could nominate me for Best Canadian Personal Finance Blog and Best Financial Independence/Retire Early Blog here – https://www.plutusawards.com/nominate/ . Thanks you!