January 2018 Portfolio Update

by: Get Rich Brothers
Summary

I earned a personal record high for dividends earned in the month of January.

I received a Special Dividend payment which came as a pleasant surprise.

I made two purchases in the month; one pays a dividend while the other does not.

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. After spending a full year tracking my dividend income on a monthly basis, I have noticed that I have a much better understanding of how my portfolio functions.

I have also improved as a capital allocator as I am not allowing dividends to sit idly for as long before putting them back to work to keep the dividend compounding machine firing on all cylinders.

CAD Dividends

Company CAD Payments ($) Div Increase (%)
Toronto-Dominion Bank (TD) 53.60
RioCan Real Estate Investment Trust (OTCPK:RIOCF) 31.32
BCE Inc. (BCE) 166.10
Canadian Imperial Bank of Commerce (CM) 16.32
Corby Spirit and Wine (OTCPK:CBYDF) 101.20
Bank of Nova Scotia (BNS) 85.00
TELUS Corporation (NYSE:TU) 38.15 3.81
Rogers Communications Inc. (RCI) 26.40
Canadian Pacific Railway Limited (CP) 3.90
Chartwell Retirement Residence (OTC:CWSRF) (TSE:CSH.UN) 4.90

USD Dividends

Company USD Payments (%)
PepsiCo, Inc. (PEP) 6.50
Walmart Inc. (WMT) 6.63

Dividend Summary

January was a very solid start to the year. I was able to earn $526.89 CAD and $13.13 USD. This brings the total to $540.02 in currency-neutral terms and exceeds 2018's January total by nearly $185:

Monthly Dividend Graph

The surprise of the quarter came from CBYDF whose $101.20 payment was actually a Special Dividend which is over and above the regular quarterly dividend that the company pays. The company indicated that they felt this payment was warranted based on their surplus cash position which was beyond the company's needs for funding future growth. Since buying the company initially back in December of 2014, this is the second such extra payment I have received and I have to say it comes as a very welcome gift just for being a shareholder!

Given that it was a special payment and one I do not expect in the coming year, it is likely that this will be my best January at least through 2020.

Market Activity

I made a total of two purchases last month, only one of which pays passive income.

AbbVie Inc. (ABBV): I picked up 24 shares at a total cost of $1,929.95 USD. On the current quarterly payout of $1.07 USD, this should bring in $25.68 quarterly or $102.72 annually. This represents a simple averaging down from the purchase I made back in November where I also outlined my thesis for owning the stock.

After poor results were announced regarding its Imbruvica drug in a late-stage pancreatic cancer study and Q4 2018 results subsequently disappointed the analysts, ABBV's shares took a nosedive from ~$90 per share to below $76 at the trough. I like a good panic and figured it was a nice opportunity to pick up more shares of a high-quality company with seasoned management in an industry that is poised for continued growth over the longer term.

My belief is that if a company isn't worth buying more of during the rough patches, then I have no business owning it to begin with. After all, every company in the market falls out of favour at some point; just like people, companies experience difficulties whether of their own making or just based on the general business sentiment of the day. This is why it is eminently important to own best of breed companies in the first place.

My other, non-dividend paying purchase this month, came in the form of three shares of Berkshire Hathaway (BRK.B). Tipping the scales at just over $600 in total purchase costs, I had an ulterior motive with this one; my brother and I are planning a trip to Omaha, Nebraska, to the annual shareholder meeting!

While I've been to Kansas City on several occasions which is just a few hours down the road, neither of us have been to an annual shareholder meeting and so this marks a great opportunity to take part in an event which will be both educational and provide plenty of enjoyment. I'm most looking forward to seeing Warren and Charlie in person at the event, in addition to a host of other attractions. I'm confident the event will provide plenty of fodder for writing material along the way.

Cash

I continue to earn 3% on my cash sitting on the sidelines. At this point, I'm comfortable with sitting on a healthy five-figure stockpile as I feel the markets aren't offering anything too attractive at the moment. The Canadian banks have risen slightly just when they were getting interesting; I was hoping to put some more capital to work in that area and may well still do so should they oscillate back downward.

Conclusion

The influx of a Special Dividend from CBYDF was a welcome addition to the January income totals. It set the stage for a January total which will be challenging for me to top next year, though it certainly gives me something to aim for.

Adding some BRK.B to the portfolio which doubles as an admission ticket to the "Woodstock of Capitalism" is an exciting piece of news I'm glad to be sharing. It is an idea my brother and I have been tossing around for several years and it's about time to be pulling the trigger.

Thank you for reading.

- Ryan

Disclosure: I am/we are long TD, RIOCF, BCE, CM, CBYDF, BNS, TU, RCI, CP, TSE:CSH.UN, PEP, WMT, ABBV, BRK.B. 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.

Additional disclosure: All Canadian companies owned in CAD on Canadian exchanges.