May 2016 Dividend Income

Welcome to another monthly dividend income update. May was another month of steady dividends and I’m happy to report that the monthly totals are slowly increasing. In the short term I don’t know where the markets are headed, but if they go down I do have some cash ready to be used if some stocks start to go on sale. It’s pretty fun watching dividends come in every month with no work involved, and I have a feeling the end of each month will be my favourite time – as that’s when most are paid.

Account Activity

I did make one purchase in May – I bought shares in Target. In case you didn’t notice Target shares dropped dramatically due to a weak quarter, so I was able to get them on sale (under $67). In the short term I think they may have some struggles with increased competition in retail, and their launch in Canada was a disaster, but I am hoping in the long term they’ll be fine. The nice thing is that despite their recent setbacks they continue to increase the dividend which is a great sign, as it means I’ll be able to hold it long term and look forward to more increases in the future

My plans for the next couple months are to wait and see how the markets turn, if they start to go down (and I hope they do) then I will start buying again, otherwise I am finding it difficult to buy most stocks at these prices. My plans for my investment accounts haven’t changed – I plan on buying more US dividend stocks in my RRSP and Canadian stocks in my TFSA. Luckily I still have some US cash to invest that I converted a couple months ago, so I’ll be on the hunt for more US dividend stocks that are on sale.

 

May Dividend Income

I received dividend income from the following sources:

  • RioCan REIT
  • Crescent Point Energy
  • Surge Energy
  • Bird Construction
  • ETF: iShares Canadian Dividend Aristocrats (CDZ)
  • ETF: iShares Select Dividend Index Fund (XDV)
  • Cineplex Inc.
  • Canoe EIT Income Fund
  • Canadian Apartment REIT
  • Canadian REIT
  • Allied Properties REIT
  • Bank of Montreal
  • Boardwalk REIT
  • Emera Inc
  • Lowe’s
  • National Bank
  • Proctor & Gamble
  • Royal Bank of Canada

 

Total dividend income: $1,078.88

Note – some of the dividends received each month are in US currency which is converted at 1:1 for simplicity.

The total dividends are above $1,000 again for the second month this year which is great news. I don’t know if the growth will continue as I have been holding back some cash in the hopes the markets will go down, but I know eventually I’ll reach $2,000 per month. I am happy to report that every purchase made since September 2015 is showing a positive return, with the average of them all being around 12% (not including any dividends received).

Stocks I Am Watching

Costco has officially made my watch list, and it seems primed for more growth in the next 5-10 years. What I like about Costco is that in their annual report they specifically mention maintaining good relations with their club members (customers), something that I think can be lost on a lot of businesses their size. Almost every time I go to Costco I get good customer service and it seems like the employees are happy working there. Happy employees means increases in productivity and that’s always a good thing as a shareholder.

What’s even more promising about Costco is that they’ve paid two separate special dividends ($5 and $7 per share) in the past 5 years, which any dividend investor would love. Special dividends show a commitment from management to maximize shareholder value and I love that. They have a dividend stream of about 12 years, which means they have consecutively raised their annual dividend 12 years in a row. This is modest compared to other companies with streaks of 30 years (or more), but I think Costco can get there eventually with a continued focus on steady growth.

I don’t own shares of Costco but plan on buying in the next few months if/when the markets start to turn.

Conclusion: May was another slow & steady month – I bought shares in Target and have started to watch Costco with the hopes of buying shares in the  near future.

How was your investment income last month? What are you watching/buying?

Financial Lessons from My 20s

My 20s was a period of big changes in my life – in my career I started (and finished university), started working full time shortly after graduating and then articled for a few years to get an accounting designation. I also got married, bought a home, purchased a vehicle and a dog (the dog wasContinue Reading