April 2012 Dividend Income Update
Last month in my dividend income update, I wrote “as an investor, I should never lose sight of the risks direct stock ownership can mean.”
How true, because active money management comes with more risks than other types of investing. Unlike indexing for example, I’ll never be able to entirely set and forget my dividend investing approach but I really don’t mind. Dividend investing takes some active work, work I enjoy for now but the dividends certainly don’t take any effort. Dividend investing continues to be a great complement to my indexing products.
As of this month, I own 23 Canadian companies that pay me dividends every month or every quarter. Some are riskier investments than others (I’m looking at you TransAlta and CML HealthCare) but overall, I feel my portfolio is taking a more diversified and balanced shape with every new purchase I make. My Canadian dividend paying stocks are a nice complement to my RRSP, which is mostly indexed although I do keep a few U.S. dividend paying stocks in this account like Johnson & Johnson and Abbott Laboratories to name a few.
At the end of March, after dividends were paid and reinvested wherever possible, I mentioned our dividend income for the 2012 calendar year was projected to be $5,500. I said we’d hit this target as long as dividends weren’t reduced and the companies we own keep paying them. Well, they’re paying dividends alright and in some cases, the dividends are increasing! Recently, Canadian Oil Sands increased their dividend by 17% to $0.35 per share. That small $0.05 dividend hike increased our annual dividend income by over $25 right there! You might already know, dividends, if raised once per year, can fight inflation and preserve the purchasing power of goods and services you and I depend on. Dividend increases aren’t guaranteed every year but many of the companies I own have a history of increasing them often, so it’s a good reason to own such companies long-term.
During April, on the theme of goods and services I depend on, I also purchased some shares in Progressive Waste Solutions (BIN). I figure the need for waste management is not going anywhere anytime soon. Of course, no investment is risk-free and not even blue-chip companies are immune to short-term problems however the more different companies I own, the more diversified I am over time, the more reliable my passive income stream will be. Even if Canadian Oil Sands and Progressive Waste Solutions share prices drop, I will probably still get paid.
This past month alone, we were paid just over $500 in dividends, most of that money reinvested for our future, buying more shares in the companies we own. Left over cash, albeit small amounts accumulated again this month so later this year, I’ll be hunting for more companies to own. We’re on pace to earn just over $5,500 in dividends in 2012, inching closer to my indirect goal of $6,000.
I hope we get there and I’m looking forward to celebrating a little bit if and when we do.
@My Own Advisor
If I was making $30k/year in dividend income, I would start to look at places I could retire at a low cost.
I can dream. $30 K per year would be awesome. Again, we’ll see where I am in another 15 years 🙂
@My Own Advisor
Bought at 65$. Wonder if it was a good move. Let’s see in 20 years!
I don’t think I’ll add any though.
Wow, almost $1,500 per month?! I’ve got some catching up to do…but you’ve given me a nice target 🙂
Thanks for your blog support, as always.
@My Own Advisor
It’s going pretty well. So far in 2012, we’re averaging $1450/month in dividends. It’s amazing what compounding will do…. 🙂
Great job Mark!
It must be incredibly satisfying to know that you’re receiving over $5k/year in extra income that doesn’t require you to put in any extra hours at work. Although managing money can be a part-time job in itself, I’d say it’s closer to a hobby that just so happens to pay a pretty decent chunk of change. 🙂
Thanks Mantra. Step by step, I’m getting there. When I hit my long-term goal of $30,000 per year, I’ll be VERY happy 🙂
All in good time…
Good job! I love DRIP’s and how it’s possible to just “set it and forget it” :-).
I hear ya Calgary Girl. How is your portfolio coming along? I recall you have a bunch of dividend paying stocks?
Great job Mark, sounds like you are on track for reaching your goal. With the current wave of dividend increases you should be able to exceed 5 figures in dividends in a few years!!
I hope so Kanwal, 5-figures! I owe you an email now that I’m back from vacation. Look for that this weekend!
MOA, I am curious to know what do you think of PG lately? It seems like it won’t go anywhere short or mid term!
I think PG is still priced a bit high. I own a bit in my RRSP, but would love more. If PG drops under $60, I’m buying.
What about you?
Good job, Mark.
The amount of work dividend investing takes is easily offset by the excitement a dividend increase brings.
I enjoy reading up on what’s happening in the investment world each week, and for me that’s all the effort I have to put in managing my own portfolio; that and hitting the sell button when a stock isn’t pulling it’s own weight!
Thanks Steve. You’re doing very well yourself, and kudos to your plan…it seems to be working month, after month, after month for you.
I’m at about $100 per year so you are only 55 times ahead of me. That dividend increase must be really nice! Congratulations on the good month and inching closer to your goal of six grand.
Ha, it’s a journey Poor Student, this you know. I’ve also got at least 10 years on you.
The dividend increases are very nice. I hope they always continue. Thanks for the blog support and following along.
At a 3% dividend yield, it looks like you’ve got over $200K invested. $6000 per year would be a fantastic return! Truly passive income! I’m just now starting to build my portfolio of Dividend Aristocrats. I too have got JNJ in there.
My portfolio is not quite that high, but getting there. Anything you’re looking at now? Thanks for the support.