Dividend Income

March 2017 Dividend Income

Dividends

There remains a lot to be desired of current market valuations, but this month around I enjoyed opening a new position in Richard’s Packaging, to increase the diversity of my portfolio and get back to making larger increases to my dividend income through investments after two purchases in low-yielding Apple stock.

This month also marks breaking through $3,000 in life time dividend income.

March marks a full two years of receiving dividend income from the stock market.

If we look over this period on average, having earned $3,050 in the two years I’ve received dividends has added $127 of cash flow through each of those months.

Going forward, I am now averaging $221 per month. A solid foundation has been set to build off.

Summary of March Investment Activities

Throughout March, I’ve purchased:

One of my holdings increased their dividend.

None of my holdings were sold to recuperate capital.

None of my holdings reduced their dividends.

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Richards Packaging

Added $100 in dividends from Richard’s Packaging

Purchases

On March 15th, I added 80 shares of Richard’s Packaging Income Fund to The Dividend Beginner’s portfolio. I purchased the shares at $26.30, with a trading cost of $6.95 for a total investment of $2,110.95.

Reasons I bought Richard’s Packaging

  • Has a 1-year gain of 30%
  • Has a yield of ~5%
  • Pays a monthly dividend
  • Has increased the dividend for a consecutive 3 years
    • Just increased their dividend by 18% in March
  • Is continuing to make all-time highs
  • Provides exposure to the “Basic Materials” sector, of which I had none
  • 2016 payout ratio was 53% (richardspackaging.com)
    • Note that the distributions were return of capital (so I tax shelter this in my TFSA)
    • Management defines payout ratio as distributions and dividends declared over distributable cash flow

Dividend Income increased 4.13%

My new shares in Richard’s Packaging Income Fund add $105.60 to my annual dividend income, or $8.80 per month. RPI.UN has increased their dividend consecutively for 3 years.

Most recently, at the beginning of March, RPI.UN passed an 18% raise to the monthly distribution, from 9.35¢ to 11¢.

Before Net Increase After
Annual Dividend Income
$2,556.11
$105.60
$2,661.71
Monthly Dividend Income $213.01 $8.80
$221.81
Percentage Increase +4.13%
Canadian Natural Resources

CNQ Comes Through with Another 9% Dividend Raise

Dividend Raises

On March 2nd, “Canadian Natural Resources Limited announces its Board of Directors has declared a quarterly cash dividend on its common shares of C$0.275”. (cnrl.com)

This dividend payment compares to the previous quarter’s C$0.25 (paid in January), where it was also increased 8.7%. The quarterly distribution before that was C$0.23, paid in October 2016.

Canadian Natural Resources effectively increased their dividend by 16.4% in back-to-back dividend increases.

CNQ has increased their dividend for 16 consecutive years and I originally bought this name for it’s impressive dividend growth history – they have not let me down. It is my favourite Canadian stock for exposure to the oil exploration industry.

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Dividend Income

February 2017 Dividend Income

Dividends

As the market continues to offer little value I have not invested as enthusiastically as I did this time around last year, which is around when my investments really started heating up. Everything was dropping at that time so I picked up things that were going on sale. This time around it’s the opposite as share prices have heated up.

I continue to scour in the market and make up my monthly dividend watch lists which is how I find value in this heated market. While the market is expensive, there remain few stocks here and there which offer the value worthy of investment. I continue to tread cautiously, but I still would like to invest monthly and keep up with whichever direction the market is going. I, just like you, have no idea where we’re headed in the near-term.

I doubled my position in Apple last month after their incredible earnings release, and saw three dividend raises to boost income – saving my life hours by having these companies churn out more for me year after year.

Summary of February Investment Activities

Throughout February, I’ve purchased:

One of my holdings increased their dividend.

None of my holdings were sold to recuperate capital.

None of my holdings reduced their dividends.

*We only now realized a distribution increase of $1.32 by HR.UN

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Bank of Nova Scotia

Bank of Nova Scotia raises dividend 2.7%

Dividend Raises

On Feb. 28, 2017, as Bank of Nova Scotia announced their quarterly results they also added “our strong capital position allows us to grow and make investments in our businesses as well as return capital to our shareholders. This quarter we announced a 2 cent increase in the quarterly dividend to 76 cents per share – up 6% from a year ago.” (scotiabank.com)

While the dividend is up 6% from one year ago, they only increased the dividend by 2.7% this quarter. BNS is known to increase their dividend twice a year – both in the second and fourth quarter.
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Reverse Mortgage

Reverse Mortgage History and Basics

Sponsored

If you have heard great things about reverse mortgages but don’t really understand them, you aren’t the only one. Many people have no idea how such mortgages came about or how they work. Here are some reverse mortgage basics that can help you to understand them better and decide if you want them.

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Royal bank of canada

Royal Bank of Canada raises dividend 4.8%

Dividend Raises

On February 24, 2017, “Royal Bank of Canada (RY on TSX and NYSE) announced today that its board of directors declared an increase to its quarterly common share dividend of four cents per share, or five per cent, to 87 cents per share.” (rbc.com)

Royal Bank of Canada has seen an incredible run-up consisting of a 44% one year gain in share price. The stock is at an all-time high now and is constantly pushing on them, which is what I’m coming to really like in stock investing.

That’s the strategy I followed on Apple. Unfortunately, I don’t see as many catalysts with RY. However, the reason I chose RY over some other Canadian bank was due to it’s U.S. exposure, which comes second after TD. Overall I preferred RY’s valuation at the time I purchased my shares.

I have a pretty small position in RY which has increased 50% and makes it difficult for me to stomach adding any more at these prices. The share price has been pushing hard to reach $100.

I have positions in many of the Canadian banks and they have all done incredibly well in the last year. In addition, my exposure to the Financials sector is about 1/3 of my entire portfolio. I feel as though, unless I’m adding U.S. financials to geographically diversify, then I should be building my positions in other sectors as it’s slowly becoming sizable.

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Walmart

Walmart’s 44th Consecutive Dividend Increase

Dividend Raises

On Feb. 21, 2017, “The Board of Directors of Wal-Mart Stores, Inc. (NYSE: WMT) approved an annual cash dividend for fiscal year 2018 of $2.04 per share, an increase of 2 percent from the $2.00 per share paid for the last fiscal year.” (walmart.com)

Walmart’s share price rose significantly as they reported Q4 FY 2017 earnings. While their e-commerce appears to be gaining traction, there is a lot of uncertainty surrounding brick & mortar retail.

However I like Walmart’s business resistance in a recessionary period as they provide low-cost products. It appears lately they have been pushing for even lower costs from providers.

My largest concern for Walmart is President Trump’s border tax talk. The details have not yet been released but it does not favor Walmart… However with the tax cuts and deregulation, it’s possible that Walmart will still come out stronger despite everything. This is why, at least for the time being, I’m holding on to my WMT shares.

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H&R REIT

H&R REIT raised dividends 2.2% in Q3 2016

Dividend Raises

On November 24th, H&R REIT (TSX: HR.UN) released their Q3 press release which read: “the trustees have approved an increase in the current monthly distribution per Stapled Unit resulting in a $0.03 annual increase to a total of $1.38 per annum.” (hr-reit.com)

Note that this is a belated post. I missed this announcement in November, but want to keep my dividend income spreadsheet up-to-date. HR.UN is one of the first stocks I bought for real estate income; it’s roughly 6% dividend caught me in as I started my journey. I was recently thinking of selling this position to consolidate into PLZ.UN but finding out that they increased their distribution makes me think otherwise.

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Apple Technology

I Doubled My Apple Position Post-Earnings

Purchases

On February 8th, I added 11 shares of Apple (NADSAQ: AAPL) to The Dividend Beginner’s portfolio. I purchased the shares at $131.75, with a trading cost of $6.95 for a total investment of $1,456.20. Unfortunately this was all the $USD that I had left in my account.

To add more U.S. stocks to my portfolio I’ll have to convert my $CAD at an awful rate… still, I see much more growth coming out of the U.S. than Canada, at least in the near term. I also don’t see very much upside to our currency other than if there was a sudden large increase in the price of oil, while the U.S. will have lower taxes and higher rates propel it’s dollar.

Apple posts record results

Apple, in it’s 2017 Q1 press release announced they had, “posted all-time record quarterly revenue of $78.4 billion and all-time record quarterly earnings per diluted share of $3.36. These results compare to revenue of $75.9 billion and earnings per diluted share of $3.28 in the year-ago quarter.” (apple.com)

While I had high conviction at the complete end of 2016, when I first bought Apple stock – my first tech investment – the great results made me even more optimistic on this name. There are many catalysts that can propel Apple’s share price and total returns, and you can check out those reasons in my previous article.

Pushing all-time highs

While many were touting that the stock price had already increased so much and it was dangerous, it continued to climb and is now at $135.72; and I don’t see it stopping. Even though it just recently pushed all time-highs, that’s the way things are supposed to go. From one high to the next. It appears Warren Buffett quadrupled his investment in Apple in the last quarter, it was discovered from his filings.

Apple is a growth play for me as the dividend is below 2% (1.68% right now), while the majority of my portfolio yields 4% – 6%+. Not to mention, being a Canadian, I am automatically deducted 15% in U.S. tax withholding on those dividends.

Yield on cost lowered to 1.83%

By purchasing the last 11 shares for a cost basis of $1,456.20, my yield on cost was 1.72%.

In my first purchase of Apple last month for 12 shares at a cost basis of $1,409.39 , my yield on cost was originally 1.94%

Now with 23 shares and an average cost basis of $2,865.71 – $124.60 per share. With an annual dividend of $2.28, my final yield on cost is a paltry 1.83%.

This $US position is worth $3,752.79 CAD, the 4th largest position in my portfolio.

Dividend Income increased 1%

My new shares in Apple Inc. add $25.08 USD to my annual dividend income, or $2.09 averaged per month. AAPL has increased their dividend consecutively for 4 years since it was reinstated in 2012 after being cut in 1995. The corporation maintains a very conservative payout ratio of 26.68%, and shouldn’t have any problem increasing it for years to come.

Before Net Increase After
Annual Dividend Income $2,516.99 $25.08 $2,542.07
Monthly Dividend Income $209.75 $2.09 $211.84
Percentage Increase +1.00%
YTD Increase +1.70%

Keep in mind. When calculating my annual / monthly dividend income, I use a 1 : 1 ratio for converting USD to CAD to keep it simple (it also keeps things even more conservative).

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My publishings on dividendbeginner.com references an opinion and is for information or entertainment purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. I am not responsible for any decisions you make concerning finances, taxes, or investments. You must perform your own research and always take caution when extending capital.