Welcome to another monthly dividend income update.
In April the dividends kept rolling in as usual and I made a few purchases to add to the future income amounts (see more below). The big banks recently came out with their earnings and they all seemed pretty good, even TD didn’t seem to be affected by the negativity surrounding their sales practices.
April Dividend Income
I received dividend income from the following sources:
- RioCan REIT
- Crescent Point Energy
- Surge Energy
- 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
- Boardwalk REIT
- Bank of Nova Scotia
- BCE (Bell)
- Coca Cola
- First Capital Realty
- TD Canada Trust
Total dividend income: $1,228.19
Note – some of the dividends received each month are in US currency which is converted at 1:1 for simplicity.
April was a fairly busy month for buying (compared to prior months); I bought more shares of CCL Industries and also increased my investment in the big banks – CIBC, BMO and TD. I did this because they’ve been dropping recently and I wanted to take advantage of the lower prices. If the bank stocks continue to drop I will probably keep buying. I invested in CCL because they have an impressive dividend growth history and strong management.
I also bought shares in Saputo. If you’ll recall Saputo has been on my watch list for a while. It’s expensive right now but their history of stock appreciation and dividend growth has been impressive. As usual I see this as a long term hold.
You’ll also notice that both Saputo and CCL are both relatively low yield dividend stocks. So why would an investor focused on dividend income buy a stock that yields around 1%? The reason is growth. Similar to Costco, I see CCL and Saputo as offering great stock appreciation in the future. Sure, the dividend income is small, but I think the dividends will grow over time along with the stock price. I am trying to find a balance between yield and growth and I try not to get too focused solely on a stock just because it has a high yield.
Stocks I’m Watching
There are two stocks I’m currently watching:
Telus. They’ve done a good job growing their business in the past and have openly stated they plan to continue to grow the dividend.
CN Rail. I already own shares in CN but I like it so much I am watching for an opportunity to buy more. They’ve been able to successfully lower costs and improve their operating ratio over the past decade to become one of the most efficient railroads in North America, and their stock price reflects this.
New Investment Account
Right now I’m in the process of setting up a new investment account. This unregistered account will go along with the other 4 (registered) accounts and I’ll be using the same strategy with this one – buy and hold (and collect dividends in the meantime). As usual all dividends will be reinvested.
Why set up an unregistered (fully taxable) account? I am lucky enough to be in the position of having all 4 registered accounts maxed out (RRSP x 2, TFSA x 2). In the past every month I put money towards the investment accounts and it’s been a simple strategy – contribute the maximum for each account, which has never been an issue because I’ve never reached the maximum – until now. I thought about putting the money towards the mortgage but it’s hard to justify since the interest rate is so low (1.90%) and when I crunched the numbers it made more sense to put the money into dividend stocks.
Creating a new investment account won’t change much for dividends; it just means that some of the dividends will now be taxable. Luckily most of the dividend income is Canadian which receives favorable tax treatment.
How was your dividend income last month?