September 2018 Portfolio Update

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Includes: BEP, CBYDF, CDUAF, CNI, CWSRF, FTS, HRNNF, JNJ, MCD, MTRAF, PEP, RIOCF, V, WM, WMT, YUM, YUMC
by: Get Rich Brothers
Summary

I hit a record dividend income total in September.

I refocused my portfolio to emphasize cash flow.

My cash stockpile has grown and awaits deployment.

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, through 2018 I have also been providing monthly income updates.

CAD Dividends

Company CAD Payments ($)
RioCan Real Estate Investment Trust (OTCPK:RIOCF) 31.32
Johnson & Johnson (JNJ) 75.15
Corby Spirit and Wine Ltd. (OTCPK:CBYDF) 50.60
Fortis, Inc. (FTS) 68.00
Canadian Utilities Limited (OTCPK:CDUAF) 78.66
Canadian National Railway Company (CNI) 6.83
Hydro One Ltd (OTC:HRNNF) 59.80
Chartwell Retirement Residences (TSE:CSH.UN) 4.90
Metro Inc. (OTCPK:MTRAF) 3.60
Brookfield Renewable Partners L.P. (BEP) 35.18

USD Dividends

Company USD Payments ($)
Waste Management, Inc. (WM) 19.77
McDonald’s Corporation (MCD) 18.03
Yum! Brands, Inc. (YUM) 11.94
Yum China Holdings, Inc. (YUMC) 3.32
PepsiCo, Inc. (PEP) 7.89
Walmart Inc. (WMT) 6.63
Visa Inc. (V) 1.79

Dividend Summary

September brought in record overall dividend totals. I brought in $414.04 CAD and $69.37 USD from seventeen different high quality companies. I began the year with a simple plan to really double down on companies I already own rather than initiating new positions. I have already done extensive research on those companies within my portfolio and so I decided that I would focus my further investments rather than spreading my capital too thinly. This will remain my emphasis for the foreseeable future.

The critical mass that I have found as a self-directed investor is 20-25 companies. At that point, my portfolio is diversified enough to not take a huge shock from one or two poor investments while still offering me the opportunity to do the ongoing “maintenance” research involved in following quarterly results, reading annual reports, and generally remaining aware of what is transpiring within my companies. Less than 20 companies magnifies company-specific risk, which can be very real; anyone watching the ongoing saga over at Tesla, Inc. (TSLA) regarding the company’s CEO know well enough how something seemingly as trivial as a tweet can have a huge impact on a company. I prefer to be insulated to a degree from one or two bad cases.

Market Activity

September is only my second month (aside from April) this year in which I have not made any stock purchases. I have been endeavoring this year to invest more regularly and have, on the whole, been able to achieve this.

I did, however, manage to consolidate my portfolio somewhat recently. As discussed in last month’s update, I previously closed out my entire CGC position on the strength in the stock. This month I went further and have liquidated all cannabis investments. I sold all ACBFF for net proceeds of $739.30 CAD and all SPLIF for net proceeds of $802.55 CAD.

While there is certainly plenty of momentum supporting the cannabis sector in advance of Canadian recreational legalization coming in October, this ultimately all falls well outside of my wheelhouse as a DGI.

Consequently, I’ve been able to raise capital through the profits I’ve earned, which poses me to be in a great place heading into the final quarter of the year with this additional combined $1,541.85 in fresh powder. Should opportunities present, I will be looking to take advantage of weakness in companies already owned within my portfolio.

Primarily, I am looking south of the border to the U.S. where I have a few small positions already in companies such as PEP and V. They are both up from my initial purchase prices, but I would still like to build those positions out to boost my dividends received in USD. They are also two companies the like of which do not exist in Canada. As such, making the foreign investment can be sensible within my portfolio.

Cash

I continue to earn 2.5% from my high interest savings account and so I am comfortable at the moment stockpiling cash between stock purchases. Interest income has been a healthy source of passive income throughout the year; each month has brought in over $40.

Given that I was able to finish paying off my truck last month, I have been able to set aside an additional $260 bi-weekly toward investment goals. This cash has the opportunity to begin compounding as soon as it hits my savings account before being deployed in the markets.

Conclusion

It is a great feeling to hit another milestone in my investment portfolio. September’s totals are over $100 greater than what I earned in June which demonstrates the growth in overall dividend income by virtue of the commitment I have made to investing fresh capital over the past few months. The snowball of passive income is reaching levels where compounding begins to become even more effective.

I am pleased to have liquidated my cannabis positions; even if they were to rise further still, I am content knowing I am getting my portfolio back to fundamentals. As Warren Buffett has warned us, we only find out who is swimming naked when the tide goes out. As steward of my portfolio, it is my job to ensure it can withstand both high and low tides.

Looking forward to the end of the year, I hope to deploy the capital I have set aside from the cannabis sales in dividend paying equities to continue boosting my passive income totals.

Thank you for reading.

Disclosure: I am/we are long RIOCF, JNJ, CBYDF, FTS, CDUAF, CNI, HRNNF, TSE:CSH.UN, MTRAF, BEP, WM, MCD, YUM, YUMC, PEP, WMT, V. 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.

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.