December 2011 Dividend Income Update


A very Happy New Year everyone!

Before we jump too far into 2012, it’s time to take a look back at my last dividend income update for 2011.

Although more dividend income in 2011 (over 2010) was not an explicit financial goal for us this year, it happened.  But dare I say it, it was not a surprise.  That’s because we’re buying and holding (and hopefully never selling) established companies that pay dividends regardless of what calamity Mr. Market creates.  Actually, we don’t care very much if equities go down and Mr. Market has some fun – we’ll just buy more of these companies.  In 2011, we did just that!

Last year the following companies we owned increased their dividends, like they have for many years, decades in fact.  Past performance is never a perfect indicator for any future returns, but it’s a start.  Some of these companies have been paying dividends for over 100 years.  I’ll take my chances for another 30 or 40 years they’ll do the same.

  • Bank of Nova Scotia – In March 2011, the purse strings were cut loose – BNS hiked their dividend by about 6% to $0.52 per common share.
  • CIBC – In August 2011, Canada’s # 5 lender earned over $800 million for the third quarter that ended in July 2011 and rewarded shareholders accordingly, increasing its quarterly dividend to $0.90 per common share.
  • Emera – In October 2011, a little under the radar in my opinion, they announced a quarterly dividend bump to $0.3375 from $0.325 per common share.  Since January 2008, Emera has increased their dividend by about 40%.

And, just in time for Christmas…

  • Enbridge – In December 2011, they announced their quarterly dividend will be $0.2825 per common share in March 2012.  That represented a 15% dividend increase.
  • Bell Canada – In December 2011, they announced their quarterly dividend will be $0.5425 per common share payable in April 2012.  For investors like me keeping track, that’s the 7th dividend increase for BCE in the last 3 three years.   BCE’s common share dividend has grown almost 50% since the fourth quarter of 2008.
  • Fortis – Canada’s only true dividend aristocrat was at it again, increasing its quarterly dividend a few weeks ago to $0.30 per common share payable in March 2012.

There are more companies we own that increased their dividends in 2011 but you get the picture.   Dividend-investing isn’t the be-all, end-all but for part of our retirement portfolio, to compliment indexing in our RRSPs dividend-investing is working for us.  It’s a killer one-two hard-hitting retirement punch in my opinion.

To wrap up the 2011 calendar year we made a little over $5,200 in dividend income.

That’s almost $1,000 more than the 2010 calendar year.  Most of our companies are running synthetic DRIPs, that is, dividends are reinvested to buy more whole shares every quarter.  The rest of the funds (dividends not used for reinvestment purposes) go towards our cash account to buy new companies such as Progressive Waste Solutions (BIN) in 2011 or pay down mortgage debt.

Long-term, we hope this dividend income will keep rising in order to fund part of our retirement dreams, complimenting our passively indexed RRSPs.  Time will tell for sure but for 2011 at least, it was a good time to be a dividend investor in the companies above.

I encourage you to stay tuned to my monthly dividend income updates for 2012, as I continue to build my stock portfolio, marching towards financial freedom.  You can find these types of posts every month under the category “Monthly Dividend Income Update”.

Got some feedback or questions about my dividend-investing journey?   Fire away!

25 Responses to "December 2011 Dividend Income Update"

  1. As far a dividend yield on my portfolio, I try for an overall yield of 3.5% on my portfolio. However, I have stocks yielding from 1% (Alimentation Couche-Tard Inc. ) to 7.4% (Davis & Henderson Corp) and lots around 3% (Fortis at 3.6%)

    1. Same here Susan. I think 3.5-4% is a nice sweet spot for yield. I don’t chase it, but on the other end, I wouldn’t own many companies around 1% yield. Take POT (Potash) for example. Don’t own it. I also don’t own SU (Suncor) (yield about 1.4%) but never say never 🙂

  2. I am fairly new to blogs but to earn 5.2K in the year how much capital have you got invested?
    I only attained $1256 from 23K but I don’t know it that is a good or bad ratio!

    1. Hey BigE,

      Thanks for checking in. I prefer not to disclose my captial invested in a couple of my accounts (for many reasons) but let’s just say I’ve building it for many years, the last couple, very seriously.

      About $1200 in dividends from $23 K is about 5% yield – which is great. I think my yield is a bit lower.

  3. Yes, hubby and I are dividend investors as well :-). We’re on track to pass the $13K mark in dividends by the end of 2011 (just need to wait to receive the last statement from our brokerage sometime this week to confirm the actual final figure).

    1. Wow, nice stuff. You guys are rockin’!

      Any investing goals you and hubby have for 2012?

      I hope to be posting my goals for 2012, next week. I have a few, but dividend income isn’t one of them explicity. Investing in TFSA (stocks TBD) and optimizing RRSPs are though.

      Thanks for responding, I hope you continue to follow along and comment often this year!

  4. Happy New Year MOA and congratulations on the achievement!

    Just out of curiosity, was your $5200 in dividends pure dividends or do you also include interest income from stocks and return of capital as well? Just wondering if you strictly track just pure dividends or if you include everything?

    1. Happy New Year to you as well Calgary Girl!

      Thanks for the kind words.

      The $5,200 does not include return of capital. It only includes income paid from dividends.

      For example, Sun Life stock (I own) decreased about 50% in value this year. Very bad for folks looking for capital appreciation. Great if you’re reinvesting dividends, since now my dividends are buying twice as much stock each quarter 😉

      I recall you’re a dividend investor as well?

    1. Thanks! It has taken a few years, lots of investing, some mistakes along the way, but as My University Money eluded to, we’re finally starting to see the power of dividend growth, increases and compounding can provide.

      I hope $6,000 is within reach. I’m going to try!

    1. Hey Steve,

      Yeah, I thought the bar chart would be good to include. Again, graphs can be great visuals.

      As for your question, how do I handle synthetic DRIPs when accounting for dividend income?

      Well, basically I have a spreadsheet that tracks # of shares/stock owned and I sum the dividend income generated by those shares.

      Say for example, earlier this year, I have 200 shares of CIBC.

      Prior to CIBC dividend bump in August 2011:

      On July 28, 2011, I owned 200 shares x $0.87 = $174 dividends paid. Dividends bought 2 more shares of CIBC stock. I now hold 202 shares as of early August.

      After dividend bump happened in August 2011:

      On October 2011, I owned 202 shares x $0.90 (new dividend rate) = $181.80 dividends paid. That bought 2 more shares of CIBC stock. I now hold 204 shares.

      I keep a column to sum the dividends paid each quarter ($174 + $181.80 + …) for the entire year, for CIBC and every other stock I own. At the end of the year, I know approximately what was paid to me.

      I hope that makes sense?

      Thanks for your question!

  5. Great job MOA!

    To increase your dividend income by almost $1,000 in one year, you must have invested a ton of money. Great job being disciplined. I’m definitely looking forward to the day I cross that $5k mark.

    I hope 2012 brings you the same success. Take care!

    1. Thanks Mantra! I invested quite a bit no doubt but those dividend hikes really helped.

      From my CIBC dividend increase alone, not including any dividends reinvested over the 2011 year, my dividend income rose almost $20. I know that doesn’t sound like much, but you get 10-15 other stocks doing the same thing it really makes a difference!

      Thanks for following along and I hope you stop by often to check out 2012 progress.


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