May Dividend Income Report


In September 2017, I received slightly over $100K as a result of the commuted value of my pension plan. I decided to invest 100% of this money into dividend growth stocks. Each month I publish my results. I don’t do this to brag, I do this to show you it’s possible to build a portfolio during an all-time high market. The market will crash… eventually. In the meantime, I rather cash out on some juicy dividends!

Portfolio holdings

Numbers are as of June 1st 2018:

Canadian portfolio (CAD)

Company Name Ticker Market Value
Alimentation Couche-Tard ATD.B.TO $4,681.84
Andrew Peller ADW.A.TO $7,594.50
Royal Bank RY.TO $5,888.40
Canopy Growth Corp WEED.TO $6,974.50
Enbridge ENB.TO $6,417.46
Fortis FTS.TO $4,079.79
Lassonde Industries LAS.A.TO $6,019.02
Magna International MG.TO $5,845.00
Shopify SHOP.TO $7,816.40
Cash $335.12
Total   $55,652.03

As of June 1st, both portfolios show strong returns. My Canadian portfolio shows a ytd total return of 9.4% and my US shows +9.6%. This is quite a performance for the Canadian portfolio, as the ETF I use for benchmark, iShares Canadian Select Dividend ETF (XDV.TO), is showing a total negative return of -5.66%. Hum… maybe I should charge for portfolio management… oh wait! I actually have portfolio models! Haha!

While my positions in Alimentation Couche-Tard, Fortis, and Enbridge continue to drag behind, I have several winners doing well.

Canopy Growth, continues its crazy roller coaster trajectory, and is now up by 25% in my portfolio. I find it very interesting to have such a holding in my portfolio, to show you what you can expect when you make a “bet trade”. Those are highly volatile. All you can hope for is that the company finally unlocks value to shareholders with real numbers at one point. In the meantime, it’s a sit and don’t watch game!

Lassonde posted strong earnings growth, but sales were affected by unfavorable currency impact. Still, LAS shows a revenue decrease of -0.9% in neutral currency. As the juice market is slowing down on both sides of the border, Lassonde focuses on low-calorie products to boost sales in 2018. In April, management announced it will acquire Old Orchard Brands, LLC (“OOB”) for a total cash consideration of US $146.0 million

Magna reported another strong quarter beating of both revenue and earnings expectations. Those results were achieved even if Magna saw a small decrease, for light vehicle (-2%), in North America. Once again, Europe is the best performing market with +14% growth. The raise of steel prices shouldn’t affect Magna’s overall performance, as most of the increase will be relayed to customers by automakers.

Numbers are as of June 1st 2018:

U.S. portfolio (USD)

Company Name Ticker Market Value
Apple AAPL $5,897.44
Disney DIS $4,471.20
Gentex GNTX $5,654.10
Hasbro HAS $4,006.14
Honeywell HON $4,802.88
Lazard LAZ $5,264.22
Microsoft MSFT $6,047.40
Starbucks SBUX $4,837.35
Texas Instruments TXN $5,740.00
United Parcel Services UPS $4,338.25
Visa V $6,542.50
Cash $256.73
Total   $57,858.21

I like to compare my performances with the Vanguard Dividend Appreciation ETF (VIG). It gives me a good idea of how well, or not so well, I’m doing vs ETF coach potato investors. As of June 1st, VIG shows a total return (including dividend) of 1.026%. My portfolio shows a total return of 9.6%. Not bad. Here are a few comments on some of my holdings;

UPS posted a solid quarter with double-digit growth everywhere (EPS, revenue and dividend!). A strong economy supported UPS growth as both US (+7% revenue) and international (+15%) contributed to UPS success. The company also invested $1.5B in capital expenditure to support its growth strategy. Shares on the market are getting better lately.

It was another quarter with the same growth story for TXN. Revenue was driven by the automotive markets. I expect this trend to continue for a few more years. The stock hasn’t been a top performer on the market recently, if you can pick shares below $100, that’s a steal. Management uses only 45% of its cash flow for dividend payment, leaving plenty of resources for R&D and sales growth, through their important marketing team. Free cash flow for the past 12 months is up by 17%, leading the way for more dividend hikes!

When I listen to Visa earnings call, the CEO had me at “terrific.” This company looks like a rocket launched at the end of the galaxy. Don’t get fooled by the DDM valuation, showing a lower value for V. This valuation method has its limits when it comes down to look at a low yielding stock. As payment volume grows by 11% with 12% more transactions, management expects to keep-up with low double-digit revenue growth for the rest of the year. There will definitely be another double-digit dividend raise waiting for you around December.

Dividend income: $253.76 CAD

As this portfolio is going through its first year of existence, I have no clue what to expect for my monthly dividend report. After a weak month in April (I received little under $60), I’m back with a solid month at over $250. The bulk of those payments are coming from my US holdings.

Canadian Holdings payouts: $56.40 CAD

  • Royal Bank: $56.40

U.S. Holding payouts: $152.99 USD

  • Hasbro: $28.98
  • Apple: $22.63
  • Lazard: $17.14 + $27.74
  • Texas Instruments: $31
  • Starbucks: $25.50

Total payouts: $253.76 CAD

*I used a USD/CAD conversion rate of 1.29.

Since I started this portfolio in September 2017, I have received a total of $1,414.19 in dividend.

Final thoughts

This quarter was particularly promising as I’ve shown many companies announcing solid dividend raises:

LAS.A.TO +33%

AAPL + 16%

UPS +10%

LAZ +7%

While my portfolio average yield is somewhat low for a “classic” dividend investors, I have plenty of time in front of me to double and triple those payments before I retire. With so many double-digit dividend raises, I don’t have to worry about inflation!

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