Seeking Alpha

July Dividend Income Report

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Includes: AAPL, DIS, GNTX, HAS, HON, LAZ, MSFT, SBUX, TXN, UPS, V
by: The Dividend Guy
The Dividend Guy
Dividend growth investing, independent research, long-term horizon

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 dividend income report. 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'd rather cash some juicy dividends!

Portfolio holdings

Numbers are as of August 1, 2018:

Canadian portfolio (CAD)

Company Name Ticker Market Value
Alimentation Couche-Tard ATD.B.TO $5,138.50
Andrew Peller ADW.A.TO $6,847.50
Royal Bank RY.TO $6,093.00
Enbridge ENB.TO $7,438.20
Fortis FTS.TO $4,234.23
Intertape Polymer ITP.TO $5,157.00
Lassonde Industries LAS.A.TO $5,569.20
Magna International MG.TO $5,546.79
Cash $10,706.45
Total $56,730.87

My Canadian portion is showing a double-digit return since the beginning of the year (+11.3% as of July 27). I think that's a pretty good return considering the total return of the iShares Canadian Select Dividend ETF (XDV.TO) is a whopping… -4.66%! (so much for investing in ETFs, right?). On top of my two successful trades with WEED.TO and SHOP.TO, my other dividend holdings also posted great results.

Alimentation Couche-Tard (OTCPK:ANCUF) dropped like a rock after publishing their latest quarter's results. Unfortunately, analysts' expectations are sometimes hard to meet. While revenue was boosted by acquisitions (this is ATD's core strategy after all), same-store sales growth was only significant in Europe. Fuel margins have improved and synergy coming from the CST acquisition already has reached the mark of $103M.

Going forward, we think ATD will continue its growth by this acquisition strategy. As convenience stores around the world are a highly fragmented market, there is virtually no limit on ATD's growth in the upcoming years. Its unique ability to integrate rapidly and generate synergy will continue to drive the business success. Finally, management announced an 11% dividend increase. While you don't buy ATD for its yield, a double-digit dividend raise is always welcome.

Shareholders had a good reason to celebrate recently as the state of Michigan finally approved the Line 3 replacement plan. There were concerns about regulation approval as many thought Michigan would only approve work on the existing pipeline route. In the end, the project was approved as submitted by ENB.

Everything seems to be falling in line for Enbridge, and it would not be surprising to see its share price going over $50 by the end of the year. The company will become easier to analyze as it is currently integrating all parts into one entity. In the meantime, you can enjoy a strong dividend payment and look forward to another double-digit dividend increase in 2019.

Trade: Bought 300 shares of Intertape Polymer (OTCPK:ITPOF) (ITP.TO) @ $16.89

At the beginning of the month, I had $15K to invest in the market but I was on vacation most of the month. Therefore, I only added one position.

Intertape Polymer makes one of my favorite products for RVing…. Duct Tape! But the company is more than making this famous product, it also manufactures a full range of packaging tapes and materials. The company also manufactures and sells a variety of paper and film-based pressure-sensitive and water-activated tapes, polyethylene and specialized polyolefin films, woven coated fabrics and complementary packaging systems for industrial and retail use.

With the rise of online shopping, the packaging industry should benefit from this tailwind. ITP expects to reach $1.5 billion in sales by 2022. Intertape is #1 and #2 in its main market in North America, and shows international expansion opportunities. Management also expects to grow by acquisition to expand its current line of products, consolidate its activities, and open additional doors in international markets.

Numbers are as at August 1, 2018:

U.S. portfolio (USD)

Company Name Ticker Market Value
Apple AAPL $5,898.99
Disney DIS $5,110.20
Gentex GNTX $5,452.00
Hasbro HAS $4,582.06
Honeywell HON $5,108.80
Lazard LAZ $5,538.60
Microsoft MSFT $6,364.80
Starbucks SBUX $4,453.14
Texas Instruments TXN $5,566.00
United Parcel Services UPS $4,435.93
Visa V $6,837.00
Cash $413.59
Total $59,347.52

While my Canadian portfolio did well, I can say the exact same thing about my US one, too! As of July 27, my US portfolio shows a total return of 14.0%. This is a very good performance compared to the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) at +5.27%.

Great performances by AAPL (+20.98% since I bought it) and MSFT (+41.24%) in their recent earnings helped in pushing my portfolio higher. While non-paying dividend techs such as Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) saw their shares falling after their results, my two tech stocks pretty much killed it on the market!

Hasbro (NASDAQ:HAS) also made a big jump after reporting better-than-expected results. Everybody was afraid of the impact of Toys"R"Us's financial troubles. In the end, Hasbro has demonstrated those problems were already behind them. They took the hit and now the company is moving forward with the acquisition of another popular toy brand; Power Rangers (for $500M). As the company shows unmatched experience to make cool toys from this brand, this acquisition should bring significant traction for Hasbro. The company also posted strong revenue growth in the gaming industry (+14%).

Dividend income: $104.03 CAD

Let's take a look at which company paid me this month:

Canadian Holdings payouts: $21.29 CAD

  • Andrew Peller: $21.29

U.S. Holding payouts: $63.65USD

  • Gentex: $25.85
  • Disney: $37.80

Total payouts: $104.03CAD

*I used a USD/CAD conversion rate of 1.30.

Since I started this portfolio in September 2017, I have received a total of $1,837.34 in dividend.

The "third" month of the quarter is always the weakest in my portfolio. However, I can see an improvement after receiving $93.45 in January and $59.77 in April, I passed the $100 mark this time. In August, I expect to receive about $250 in dividend. This will be a great month!

Final thoughts

I have my plate full for August! With 10K in hand, I have two more companies to add to my portfolio. I already have an idea for one of them, but need more research before I invest the full amount. My objective is to be fully invested again by the time I write this report. Having money sleeping in my account is definitely not my type!

I'm curious, do you have any suggestions?