February 2018 Portfolio Update
Summary
- My February dividends have been tallied.
- The Feb-May-Aug-Nov quarterly schedule has proven to be a light period for dividends.
- I made three stock acquisitions through the month.
As a dividend growth investor (DGI), I am driven to keep track of both my inflows and outflows. Increases in investment income represent one measure to assess whether I am winning or losing the game of money. While I have been diligent to track my progress on a quarterly and annual basis over the past few years, I have recently decided to move to monthly status reports.
CAD Dividends
| Company | CAD Payments ($) |
| RioCan Real Estate Investment Trust (OTCPK:RIOCF) | 31.32 |
| Jean Coutu Group Inc. (OTCPK:JCOUF) | 29.51 |
| Chartwell Retirement Residences (TSE:CSH.UN) | 4.80 |
Dividend Summary
My dividend income for the month of February amounts to a slim $65.63 CAD. Given that I only started tracking monthly dividend income last month, this is surprising to me to see. Of the 22 quarterly dividend payers in my portfolio, only one makes its payment in February. This comes in stark contrast to my January totals which rang the bell at $341.80 CAD and $13.36 USD. As a result, I expect next month to come in strong in similar fashion to January.
Even having noted the above, JCOUF is slated to be merged into Metro, Inc. (OTCPK:MTRAF) soon since the deal between these two companies was approved by shareholders recently. I am still on the fence as to whether I want to retain a position in MTRAF which, despite the fact that it will be merged with JCOUF, is a less desirable holding in my view. While I am going to take a deeper dive into this in the coming month, there is a fair chance that I will leave half of my investment here and take the other half in cash to reinvest elsewhere; likely by adding to a bank or utility already existing in my portfolio.
The lone standout this month is the increase of 2.13% from RIOCF. I already earn a very healthy YOC above 12% based on my original purchase price and factoring the distributions I’ve reinvested over the years. While prior to the financial crisis–which is incidentally when I bought my shares–RIOCF had a solid dividend growth track record, it has only had once increase prior to this one which came in early 2013. It is nice to see the company get back to upping payments to unitholders.
Market Activity
I remarked in my January 2018 Portfolio Update that that had been a busy month for me with two stock purchases. February proved to be far busier with a 50% uptick in purchases. Okay, it was only an increase from two to three, but it’s still a trend in the right direction. I believe that the key to market success is to be a net accumulator of assets by conducting far more buys than sells and reinvesting the dividends over the long haul.
In keeping with my 2018 theme of doubling down on companies I already own, all three buys this month were in companies I already had a stake.
The first was for an additional 30 shares of Fortis Inc. (FTS) on the Toronto Stock Exchange in CAD. On the current $0.425CAD quarterly dividend, I expect this to generate $12.75 quarterly or $51.00 annually.
My second buy was for 35 shares of Canadian Utilities (OTCPK:OTCPK:CDUAF) on the Toronto Stock Exchange in CAD. On the current $0.3933 CAD quarterly dividend which was just raised by 10%, I expect this to generate $13.77 quarterly or $55.06 annually.
Both FTS and CDUAF are utility companies operating within Canada. They are both among the longest-running dividend raisers within Canada, each boasting over 40 years of consecutive growth. While some companies seek to keep their streak going with minor increases, both of these all-stars have managed respectable increases. The past two years have seen 10% dividend increases from CDUAF. FTS has managed bumps of 6% recently and likewise provided guidance to investors that it will be targeting a 6% annual dividend growth rate through 2022.
My final purchase of the month was for 55 shares of Corby Spirit and Wine Ltd. (OTCPK:CBYDF) on the Toronto Stock Exchange in CAD. On the current $0.22 CAD quarterly dividend, I expect this to generate $12.10 quarterly or $48.40 annually. I had already bought some more CBYDF in January but then the price dipped another ~6% which just made the company even more attractive in my view.
CBYDF is a relatively small company currently hovering a market cap of $600M CAD. They market and distribute spirits and wines as their name suggests. Despite their size, the company's portfolio of brands includes J.P. Wiser's whiskey, ABSOLUT vodka, Chivas Regal, and other globally recognized names. The company has increased its dividend twice in the past two calendar years and also paid a special dividend of $0.62 CAD per share back in early 2016. These special dividends are not uncommon in Corby's history as the company prefers to send money to shareholders when it finds a surplus of cash on hand. Given that the company actually has no debt and has a track record of managing its cash flow effectively, I feel comfortable adding to my stake for the second month in a row.
Taken in aggregate, these three purchases are currently set to bring in $154.46 in annual forward income. It has been my goal to get out to a fast start in 2018. Making these acquisitions so early on sets the runway to have a successful year overall.
Conclusion
Taking monthly snapshots of my dividend income has already proven advantageous. I am confident that if I hadn’t begun paying closer attention to my portfolio on a regular basis in this way that I would not have already made five stock purchases to kick off the year.
Heading into March I haven’t set any expectations in terms of purchases I would like to make, but I remain financially and psychologically poised to opportunistically make the most of what the market offers up.
I would be curious to hear from any readers regarding how heavily (or lightly) weighted your portfolios are to the Feb-May-Aug-Nov quarterly dividend schedule and if you also experience monthly droughts as I have this time around.
Thank you for reading.
Full Disclosure: All Canadian companies owned in CAD on Canadian exchanges.
Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
This article was written by
Analyst’s Disclosure: I am/we are long RIOCF, JCOUF, FTS, CDUAF, CBYDF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Long TSE:CSH.UN.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Recommended For You
Comments (2)
Ryan