September Dividend Income Report

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Includes: AAPL, ADWPF, ANCTF, CAE, DIS, ENB, FTS, GNTX, HAS, HON, ITPOF, LAZ, LSDAF, MGA, MSFT, NTIOF, RY, SBUX, TXN, UPS, V
by: The Dividend Guy

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 some juicy dividends!

***UPDATE*** In September 2018, I hosted a live webinar on how I used my investing methodology to build this portfolio. I'm going back to my screening methods and how I invested the full amount in the market to get the result I'm presenting today.

Portfolio holdings

The month of September is always a great month for me. First, it has a meaning of a "fresh start" after summer. I always enter in this month with great motivation. Plus, it's my birthday! And this year, I have something to celebrate; my pension portfolio is 1 year old! When I started investing this money a year ago, I was confident of doing a good job, but I would have preferred to start in September 2009 rather than 2017! Still, I fearlessly invested my money following my 7 investing principles. Let's take a look at the latest numbers…

Numbers are as at October 3rd, 2018:

Canadian portfolio (CAD)

Company Name Ticker Market Value
Alimentation Couche-Tard (OTCPK:ANCTF) ATD.B.TO $5,471.32
Andrew Peller (OTC:ADWPF) ADW.A.TO $6,814.30
National Bank (OTCPK:NTIOF) NA.TO $5,144.00
Royal Bank (NYSE:RY) RY.TO $6,173.40
CAE (NYSE:CAE) CAE.TO $5,180.00
Enbridge (NYSE:ENB) ENB.TO $6,997.06
Fortis (NYSE:FTS) FTS.TO $4,093.65
Intertape Polymer (OTCPK:ITPOF) ITP.TO $5,775.00
Lassonde Industries (OTC:LSDAF) LAS.A.TO $5,011.65
Magna International (NYSE:MGA) MG.TO $4,830.70
Cash $731.53
Total $56,214.36

My account shows a negative variation of $588.12 since the last income report.

I didn't make any trade this month as the portfolio is fully invested. Small variations here and there were mostly caused by the NAFTA negotiation (and resolution). At this point, I don't feel I will move any money around. I'm quite satisfied with this portfolio and the results that were published by my companies.

Lassonde is on a bad slump lately, mostly due to US sales underperformance. Sales from OOB (Old Orchard Brands) added $12.4 million to the company's second-quarter sales. Excluding OOB's sales and a $9.5 million unfavorable foreign exchange impact, the company's second-quarter sales increased by $4.7 million (1.2%) year over year, largely due to sales price fluctuations that had a favorable impact on national brand sales. EPS drops are partially due to OOB sales and weaker margins in the U.S.

Magna International is also going sideways on the market lately. However, its latest earnings were great. Double-digit EPS and revenue growth (including a record quarter in sales) weren't enough to please the market as analysts were expecting more. What's the problem? The market fears Magna will not be able to keep up with this pace going forward. Tariffs and a strong US dollar are at the center of those concerns. We think the company will continue to do well and this small pull-back is just a buying opportunity.

Numbers are as at October 3rd, 2018:

U.S. portfolio (USD)

Company Name Ticker Market Value
Apple AAPL $7,199.44
Disney DIS $5,265.90
Gentex GNTX $4,954.97
Hasbro HAS $4,744.43
Honeywell HON $5,293.12
Lazard LAZ $4,866.42
Microsoft MSFT $6,917.70
Starbucks SBUX $4,725.15
Texas Instruments TXN $5,424.00
United Parcel Services UPS $4,353.05
Visa V $7,476.13
Cash $664.89
Total $61,884.13

The US account shows a positive variation of $477.55USD since the last income report.

Companies I picked from the top dividend tech stock list continue to do extremely well. There is definitely a strong wind of optimism around any businesses using cool buzzwords such as "cloud," "AI" or "big data." I think we are not done with this wave and many companies are not even at the "bubble" stage yet. But with AAPL, MSFT, and TXN, I'm already well served in the tech sector.

While my overall portfolio didn't move much over the past 30 days, I've almost matched my record month in term of dividend received. With the help of a special dividend paid by Lazard, I've made $408 in February. This month, I was only nine bucks short of beating that record…

Dividend income: $400.15 CAD

Starting next month, I'll be able to compare my dividend received with last year. I'm fairly confident to beat October as it was my smallest month. What I like about this real-life portfolio example is that I can't blind you with some extra savings abilities that would increase the money invested in the portfolio (and therefore its dividend paid each year). The final amount that has been invested will always remain $108K as it is a "locked" account. We will then see the power of dividend growth in real action without being supercharged by additional capital.

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

Canadian Holdings payouts: $280.38 CAD

  • Alimentation Couche-Tard: $8.60
  • CAE: $20.00
  • Intertape Polymer: $54.63
  • Lassonde: $17.01
  • Magna International: $30.03
  • Enbridge: $108.03
  • Fortis: $42.08

U.S. Holding payouts: $93.21 USD

  • Visa: $10.50
  • UPS: $33.67
  • Honeywell: $23.84
  • Microsoft: $25.20

Total payouts: $400.15CAD

*I used a USD/CAD conversion rate of 1.2850

Since I started this portfolio in September 2017, I have received a total of $2,506.89 in dividend. This is good for an average dividend yield of 2.32% based on my cost of purchase. But keep in mind that I started investing my money in September, but I've completed my portfolio around January the year after. Therefore, I expect my dividend income to be a lot more in 2019.

I don't have the full calculation (because I spend more time looking at companies than tracking numbers that already happened in my portfolio), but I think my holdings grew their dividend by roughly 12% on average over the past 12 months. Therefore, I can expect to receive more than $2,800 in dividend.

Final thoughts

Overall, we can say that my global portfolio didn't do much in term of variation. This is partially due to the fact that the currency movement affected my US portfolio by about 1% and my Canadian portfolio didn't perform that well.

On the other side, I can appreciate the $400 in dividend payment that helped me go through a lesser good month. This is one of the many advantages of having a dividend portfolio; when you are having a bad month on the market, your dividend payment takes over and makes you forget!