Dividend Income – April 2016

My taxes are done and I am getting a decent size return. Expect some new money and investments added to my accounts in the coming weeks to generate more dividend income. In fact, I will be able to complete the contribution to my TFSA for the year and complete the RESP contribution as well. That’s almost $10K worth to be invested.

It’s important to note that I don’t usually want such a high return as I want to invest my money early. The tax return may work for some but I have been in the habit of optimizing my taxes at the source and invest early. I am very disciplined at paying myself first.

Dividend Income

April is a lull month for my dividend income. I have earned $920.78. While I have reached the $1,000 dividend per month for March 2016, it will probably take the rest of the year and new money to reach $1,000 per month. Forecasting my dividend income for the year gives me a monthly average of $994.37.

Dividend Income - April 2016

Now, my monthly dividend income is not the current priority as I could easily switch to higher yield investments to reach that goal. In fact, my most recent purchase doesn’t pay much in terms of dividends but it has dividend growth and capital appreciation and I expect it to continue. As I hinted in my last dividend income review, I was looking at credit cards companies Visa, NYSE:V , MasterCard NYSE:MA , American Express NYSE:AXP  and settled on purchasing the market leader Visa. At 0.72% yield, you can see that it’s not going to lift my monthly dividend income but aside from a low yield, it was checking all the boxes I needed.

Let’s put the dividend yield and the stock performance in perspective with another great financial institution such as Royal Bank of Canada TSE:RY . Which of the two companies would you have preferred to have invested in over the past 5 years? In fact, with RY you only benefit from RY whereas with VISA, you benefit from all other banks in the world participating in the VISA program. A retiree in their retirement phase might look at it differently but when you are in the accumulation phase of your portfolio, you want your money at work and Visa does just that.

V vs RY

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.
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