Dividend Income – September 2016

Only one quarter left to the calendar year and another record month in dividend income. Sounds impressive but the reality is that I should be having record months at least every quarter as my dividend income should be increasing if my dividend growth investing strategy works. Newly invested money leads to more dividends.

It’s only natural in the accumulation years that I would see my dividend income grow as I am focused on adding money to my portfolio. So far this year, I have invested $21,000. I would have to pick really bad stocks to not see an increase in dividend income. If you consider an average of 3% dividend yield on a portfolio, my dividend income should rise by $630 for the year depending on when it was added. When you factor in dividend increases, you can count on seeing more dividend growth. So far I am on target to have a $2,100 increase in dividend income for 2016 compared to the previous year.

Stock Trades

I made the final contribution to my TFSA in September and purchased more shares of Canadian National Railway TSE:CNR. CNR is a strong dividend growth stock and a Top 10 Canadian Blue Chip stock.

Dividend Income

My September dividend income reached $1,366.83. Fortis TSE:FTS recently provided investors with a dividend increase and I expect 4 companies to provide an increase in December. The consistent dividend growers found in the Canadian Dividend Aristocrats list tend to increase their dividends at the same interval annually which makes it easy to predict future income growth. As a Canadian, the Canadian Dividend Achievers list is even better as it tracks companies with 10 years of dividend growth vs 5 with the Canadian Dividend Aristocrats. The US has Dividend Achievers with 10, Dividend Aristocrats with 25 and Dividend Kings with 50.


Last month, I compared my portfolio performance to the Canadian stock index by comparing it with the TD e-series Canadian Index fund. I happen to beat the index by just under 1% and that’s not including the mutual fund fees. I realized that a large portion of my portfolio is also invested in the US and decided to compare the performance of my portfolio to Vanguard Total Stock Market ETF (VTI) and I also beat it by less than 1%. If I exclude the RESP account which has a shorter investing horizon, I beat it by 2.5%. I’d say my strategy and stock selection process works. Make sure you have rules for investing and stick to them while giving yourself the flexibility to improve them as you learn.

It’s not like I would switch my approach cold turkey even if I did not beat the index. The reality is that my portfolio is pretty much on the auto-pilot. I am not hunting for stocks, I am investing in my dividend investing strategy which focuses on buying blue-chip dividend growth stocks.

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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