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Q3 2018 Dividend Report

Get Rich Brothers profile picture
Get Rich Brothers


  • I've made four stock purchases this quarter with one being a new addition to the portfolio.
  • I have once again hit a new record for dividend income.
  • I am in a solid position heading into the home stretch of the year.

My Background

Each investor faces a different set of circumstances. Now 31, I have been investing since I was 22 years old. My first investment in individual stocks was made in the heart of the financial crisis back in May of 2009. I purchased 40 shares (80, split-adjusted) of Toronto-Dominion Bank (TD). However, for years before making that purchase, I had been researching the best methods available for both wealth creation and preservation.

I don't believe in taking unnecessary risks and felt the whims of the stock market were too fickle as far as capital gains are concerned to base my aspirations of financial freedom on. Dividend growth investing stood out as it seemed far more predictable that a healthy company might increase its dividend by 6% than to make any sort of prediction about stock price volatility over the short term.

On this basis and from my initial foray into the markets with TD, I've built a portfolio of 24 cash flowing equities. My goal is ultimately to have a stock market portfolio which provides enough income to cover all of my expenses. While some feel that it only requires ten companies to achieve ultimate diversification, I believe there is room for a healthy level of redundancy to avoid the hiccups involved with company-specific performance. Regardless, I endeavour to always own the best of breed companies in their respective industries. I can live with a bit slower growth if it means greater security for my invested dollars.

This is a strategy I have researched over time and came to trust because it can work for me both as a young investor and likewise carry me through the decades to come. While it may not turn heads at a dinner party, it has proven its value over the past few hundred years

This article was written by

Get Rich Brothers profile picture
I’m a mid-thirties Canadian presently employed at my day job with a healthcare facility working in Clinical Informatics—software and programming, specifically. I’ve been investing in individual equities since 2009 when I made my first purchase in Toronto-Dominion Bank (TD). I still hold those shares and have continued on my path of being a net accumulator of assets under the dividend growth investing model. I believe cash flow is king and focus my investment efforts on building an ever-growing source of passive income which will someday fuel my financial freedom. My life philosophy is simple: Leave all things a little better than how you found them.

Analyst’s Disclosure: I am/we are long TD, RIOCF, KO, JNJ, BCE, CM, CBYDF, BNS, TU, RCI, FTS, CDUAF, CNI, CP, WM, MCD, YUM, YUMC, PEP, WMT, V, TSE:CSH.UN, MTRAF, BEP. 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.

All Canadian companies owned in CAD on Canadian exchanges.

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.

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Comments (24)

I love to read stories like yours.......keep up the good work! I started investing 5 years ago and I also own TD, TU and another one I hold is BIP........my next purchase will be ECL on a pull back and a utility and a railroad.
Get Rich Brothers profile picture
Hey duolibster,

Glad you enjoyed the article. I definitely love sharing with people like yourself to hear about what you are also buying and how you're thinking about your portfolio; it's actually the reason I take the time to write at all.

If you keep on the road and just keep accuulating, you'll hit your goals and that diligence will pay off in all areas of your life... not just in money.

Take care,
Profitcripper profile picture
Just my two cents. You are going down a wonderful road of investing that majority of human-beings don’t have the guts nor the patience to learn how to manage their own money.

The only stock tips you should know, are the ones you have done your own due diligence on. Keep diversifying over different sectors, avoid the ones you don’t understand or don’t like at all. But keep a open-mind to them.

Have patience, be patient on learning new financial strategies. That includes credit card use into your daisy chain of financial instruments. Know your balancing points. Test your debt levels. You have a job, right; see how long it will take you to pay off a credit card you use in obtaining more stocks for future advantage. The money has not gone no nowhere.....It’s just that you are using today dollars to obtain more future dollars.

Watch your capital gains taxes every year, do less selling and more buying for dividends relocation to other instruments. Watch out on selling any investments that are over $10,000 threshold on the US stocks, capital gains will be close to $1000 for taxes. For Canada, I have no idea on that topic.

And you will be managing a portfolio in the big numbers at the rate you are going. $100,000-1,000,000 Remember not to panic in a down market which is your best friend, continue to be humble with your money, avoid big purchases unless it’s going to put equity or money in your pocket. A windfall is easy to manage once you get a hang in putting money in every securities every single month.

Manage your debt properly, avoid paying them off in a swift swoop. Their will be debts!!!- everything from medical surgery to new cars, it depends how you handle it without selling your stocks to pay them off, manage your dividends around all of it.

Avoid friends who do not understand financial strategy of this type, it’s a waste of time to convince them to manage this way. Give no one an idea of your net worth!!! It’s a waste of time!!!

Continue obtaining “pipelines”. That’s dividend-investing stocks that can help your income growth. Those could be your beat-down stocks you have been watching for a while and you know that they can keep their dividends rate. I Love those!!!

Every stock that you own, continue to observe their behavior during good times and bad times - Economics 101..... that’s the way you will learn what works for you or don’t work for you.

Last!!! Avoid a lover, spouse or partner who loves to spend money!!! It will bleed your financial strategy dry, probably kill it. If they can contribute without they knowing the details great. Happiness is here for you. God Bless.
Get Rich Brothers profile picture
Hey Profitcripper,

Thank you for all if that incredible wisdom. There is plenty in there to reflect on and I will do exactly that. I can tell you are speaking with experience behind you and I appreciate you passing it on to me. I will carry it with me and I am sure other readers will as well.

Kind regards,
Where is the 2.5 percent savings account?
Get Rich Brothers profile picture
I have it at Tangerine, B F.

I believe they currently have a deal for 2.75% for six months on new accounts at the moment (in addition to a signing bonus). Hit me with a private message if you have more questions and I'd be happy to discuss.

Take care,
TaiPan profile picture
KO and JNJ are on the Canadian dividend list. Yet these are US companies, and not listed on a Canadian stock exchange, I believe. Please correct me if I am wrong.

Even if these stocks WERE listed on a Canadian exchange, they would not be considered "qualified dividends", i.e. would not be eligible for the tax breaks available to Canadian investors for Canadian--company dividends, I believe.
Fair to assume it is a simply mistyped. As far as "eligible for the breaks", what does this even mean? Stock's are never eligible for tax breaks, the accounts their held in is what matters.

If you put U.S. stocks in an RRSP(retirement account), then you don't pay U.S. withholding tax, if you put U.S. stocks in a taxable, or TFSA then you will pay withholding tax on dividends/distributions.

Basically what this means is you should put U.S. dividends stocks in RRSP, and U.S. non-dividend stocks in TFSA(you don't pay U.S. tax on capital gains as a Canadian ever), or in a taxable if TFSA is full. There is never 'enough' room when it comes to RRSP/TFSA, but there is enough room to be pretty well diversified outside of Canada and never pay U.S. taxes if that is the desire.
Get Rich Brothers profile picture
Hi TaiPan,

I hold these in CAD despite them paying in USD and ththe currency being converted. I have them in my Tax-Free Savings Account (TFSA) which at the time did not allow for U.S. currency holdings, though I still wanted to own these companies (even though that meant foregoing the 15% withholding tax with no way to reclaim it). I have added a disclosure in previous articles but, to your point, I need to make that clearer in articles going forward.

Thank you for bringing this back to my attention.

Get Rich Brothers profile picture
Hi ActivBoisson,

I think TaiPan was referring to the dividend tax credit for eligible Canadian companies (which KO and JNJ wouldn't qualify for).

There are definitely many tax considerations to consider between TFSA, RRSP, and non-registered. When I started out, I had no where near the amount of income I would need to hit all the limits and really didn't need the shelter of a RRSP). As such, TFSA was really where I wanted to focus and which explains how I've structured things. When having to choose, from a philosophical perspective I like to pay now and be in line for zero taxes later as with the TFSA.

Thanks for adding your perspective.

dividendchamp profile picture
Nice article. Check ENB should be right up your alley and pay a nice yield with no K1!!! They have been experiencing some-temporary weakness last several weeks. I hopped in at ~33. I will a year from now this price point will be long gone. 😀
Get Rich Brothers profile picture
Hey dividendchamp,

ENB is definitely on my radar. I do love the business model of charging for a service rather than dealing directly in a commodity.

Glad you enjoyed the article.

schizoidmantoo profile picture
I am not familiar with the Canadian stocks in your portfolio for the most part. Your US portfolio, however seems to be a little overloaded in food, PEP, YUM, YUMC, MCD. Also, V seems like an odd choice given your investment strategy. It's yield is only 0.56% and it's dividend growth rate, while is looks pretty good, has been slowing. (10 year average growth was 30%, but over the last 3 years it has dropped to 18%.)
Get Rich Brothers profile picture
Hi schizoidmantoo,

V has a low dividend but is one of the best companies in the world in my view. To be honest, I feel my only mistake with it was waiting too damn long to get in. I kept waiting for a real pullback that never came. Low yield but everything else in a company I could really want.

Canada doesnt't have food service companies of the ilk that I have on my USD side and so I found my diversification in this manner. There are areas I feel Canadians need to go foreign (including U.S.) to get what they need.

I appreciate the insight.

schizoidmantoo profile picture
One of my best performing stocks is FDX. It has a dividend yield of only 1.09%, but the payout ratio is only 16.72% and has a high dividend growth rate that I suspect will continue for quite some time. Compared to UPS with a higher yield, but only because it has a much higher payout ratio. UPS dividend growth rate is much slower as well. If UPS dropped their payout ratio to 16.72%, their dividend yield would drop to 0.84%. Since the author is young FDX would be a good option. If you need current income now, UPS may be the better choice.
Great advice! Too many younger jumping into higher yielding slow growers and think dripping will make you wealthy. Not so, as you point out.

Those big increases (and cap gains) from growth & income stocks over 20-30 years are what will make you wealthy. I also own fdx but just recently on the pullbacks.
Get Rich Brothers profile picture
Definitely a company on my radar. Over time as companies like AMZN grow (and just with the secular changes happenfing), these service companies will be like those who sold shovels and overalls during thr Klondike Gold Rush.

Get Rich Brothers profile picture
Hi JDoe20,

I agree that DRIPing on its own isn't necessarily the answer. I believe there is room in a portfolio for both low yield/high growth and high yield/low growth companies. I've been working to achieve just such a healthy balance by taking Mr. Market's opportunities.

Thanks for taking the time to weigh in.

dunnhaupt profile picture
Good solid portfolio. I would suggest you add the Canadian pipelines ENB and TRP which pay high and safe dividends. Remember they are not pulling the stuff out of the ground. They are just moving it which protects them from fluctuations in the oil and gas prices.
Get Rich Brothers profile picture
This has absolutely been on my mind, dunnhaupt. I have quite a few friends working on the pipelines and they seem to have plenty of work to keep them busy. Anecdotally, that is inded an encouraging sign.

Thank you for reading and offering the recommendation.

Ah those lazy, entitled millennials earning dividends and increasing their net worth by doing absolutely nothing but intense research into profitable investments that will provide financial security for decades to come for themselves and their future generations. Darn millennials ;-)
Get Rich Brothers profile picture
Haha ludsjr,

I love it. I'm of the opinion that people of all generations have had options available to them. We all decide what to do with our time and energy each day when we wake up and look in the mirror.

I appreciate your humour.

Take care,
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