Dividend Income Update: May 2021 | TSX Portfolio
Welcome to another update of my Wealthsimple Trade dividend portfolio. This is the sixth month of my investment journey towards financial freedom, and the sixth update as such. So, after a half a year of investing in dividend stocks, how is my dividend income risen? Let’s find out.
Dividend Portfolio Value
The market value of a dividend portfolio isn’t necessarily important. Investments into a dividend income portfolio will be more or less ‘invest and hold’ type, meaning you don’t plan to sell them quite frequently. However, if by chance I do have to liquidate these investments for an emergency, it is good to know that the portfolio has an unrealized gain of $164 or 17.6% all-time.
An unrealized gain is where the current market price of your investments is higher than your purchase price. For example, if you buy shares of Company A at $10 per share yesterday and by today it goes up to $12 per share. Within a day, you have an unrealized gain of $2 per share. This is a gain because the current market price is higher than your purchase price, and this is unrealized because you still haven’t sold your holdings. The gain will realize when you sell your holdings of Company A and cash out your profit.
Since starting my investment journey in December 2020, I have invested a total of $934 by May 2021. This includes $900 of my money, $30 of Wealthsimple Trade referral bonus, and, most importantly, about $4 of reinvested dividends.
As of May 2021 end, this $934 investment had grown to $1,098, which is also the first time my dividend portfolio crossed the one thousand dollar mark.
So far, my plan was to invest $100 a month (don’t ask how $100 * 6 months = $900!!). Investing is addicting. Cut me some slack. However, from June 2021 onward, I will be able to bump up my monthly investment amount to $200, thanks to a boost in my 9-5 salary. More money = more stocks = faster growth = FIRE!
Canadian Dividend Portfolio Update: May 2021
Now to the good stuff. We will dive into the holdings of my dividend portfolio as of May 2021.
At the end of April 2021, I held 10 different holdings, out of which 8 were dividend stocks. By the end of May, I was able to increase the total holdings to 12, out of which 10 are in dividend stocks. Essentially, I added completely new two different dividend companies to my portfolio.
I’m closing in on that sweet spot of the ‘how many different companies should a dividend portfolio hold?’ mark. I might aim for around 20 companies. But it is not my goal to diversify my portfolio to 20 companies as fast as possible.
Since most of the investments I have are up in value, I don’t want to buy more of them and increase my average purchase cost. I will have to do this at some point. But for now, I will hunt for more juicy opportunities.
I was able to lower my average cost on one holding (ENS.TO) during May since its market price had dropped by a few cents since I purchased it in April 2021.
| Company | Ticker | No. of Shares | Purchase Price | Total Value at Cost |
| Keyera Corp. | KEY | 4 | $22.89 | $91.56 |
| Manulife Financial Corp. | MFC | 4 | $23.12 | $92.48 |
| Pembina Pipeline Corp. | PPL | 3 | $30.71 | $92.13 |
| Shaw Communications | SJR-B | 4 | $22.10 | $88.40 |
| Canadian Utilities | CU | 3 | $31.72 | $95.16 |
| Enbridge Inc. | ENB | 2 | $45.31 | $90.62 |
| North-West Health Prop REIT | NWH.UN | 1 | $13.04 | $13.04 |
| E Split Corp (Class A) | ENS | 9 | $13.59 | $122.27 |
| Timbercreek Financial | TF | 12 | $9.27 | $111.24 |
| Dividend 15 Split Corp. | DFN | 12 | $8.22 | $98.64 |
| Total | $934.04 |
I also have another $38 invested in non-dividend paying companies. This is an ongoing experiment, the results of which I will reveal soon enough.
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Dividend Income Update: May 2021
May 2021 continued the momentum of increasing dividend income every month since I started the journey. May income was only second to the March 2021 dividend income which included several quarterly dividend payments.
So, in May 2021, my total dividend income was…$2.65, only 14 cents below the March high. So, June’s quarterly dividend income is going to be a blast!
Below is a breakdown of my total dividends received in my portfolio so far.
| Company | Dividend Frequency | Dividend Per Share | Jan 21 | Feb 21 | Mar 21 | April 21 | May 21 | Total Dividends |
| Keyera Corp. | Monthly | $0.1600 | $0.64 | $0.64 | $0.64 | $0.64 | $0.64 | $3.20 |
| Manulife Fin. Corp. | Quarterly | $0.2800 | – | – | $1.12 | – | – | $1.12 |
| Pembina Pipeline | Monthly | $0.2100 | $0.63 | $0.63 | $0.63 | $0.63 | $0.63 | $3.15 |
| Shaw Comm. | Monthly | $0.0985 | $0.40 | $0.40 | $0.40 | $0.63 | $0.63 | $1.99 |
| Canadian Ut. | Quarterly | $0.4398 | N/A | – | – | – | – | – |
| Enbridge Inc. | Quarterly | $0.8350 | N/A | N/A | – | – | – | – |
| North-West REIT | Monthly | $0.0667 | N/A | N/A | – | $0.07 | $0.07 | $0.14 |
| E Split Corp (A) | Monthly | $0.1300 | N/A | N/A | N/A | – | $0.91 | $0.91 |
| Timbercreek Financial | Monthly | $0.0575 | N/A | N/A | N/A | N/A | N/A | – |
| Dividend 15 Split Corp. | Monthly | 0.1000 | N/A | N/A | N/A | N/A | N/A | – |
| Total | $1.664 | $1.667 | $2.790 | $1.74 | $2.65 | $10.51 |
In the five months of my investment journey, I have collected total dividends of $10.51 on an investment of $934. This doesn’t seem much since most of the dividends are yet to yield. So, on an annualized basis, I am looking at a yield of 7.9%.
7.9% yield is rather high thanks to Dividend 15 Split Corp. (14.6%) and E Split Class A (11.48%). I also try my best to acquire investments that yield at least a 6% dividend return.
In total cash paid out, Keyera Corp. still remains to be my highest-yielding company. Since I acquired shares of Keyera while its share price was down due to the COVID-19 pandemic, I’m able to enjoy a sweet 8.4% yield. However, the two split-share companies I own would take over these returns soon.
Dividend Stock Purchases During May 2021
Timbercreek Financial Corporation
Timbercreek Financial Corporation (TF.TO) is a mortgage investment company, provides shorter-duration structured financing solutions to commercial real estate investors in Canada. The company was founded in 2016 and is headquartered in Toronto.
Canada has accelerated its COVID-19 vaccination program and some provinces have started relaxing public gathering restrictions. We will likely see people returning to retail stores, office buildings, and shops and malls. Timbercreek might find opportunity in this situation when such businesses look to boost or return to a normal cause of business.
Timbercreek Financial Corp. has not missed a dividend throughout 2020 even with the pandemic impacting all commercial spaces. The company can rely on their short and long-term loans given out which would have earned interests throughout 2020. However, the company ensures to evaluate the borrowers beforehand to minimize the default risk.
The share price of Timbercreek has steadily recovered from a dip in late 2020. So, I could not buy it at its lowest, but I was still able to secure a forward dividend yield of 7.44% at the share price of $9.27/share.
Dividend 15 Split Corp. (DFN.TO)
Dividend 15 Split Corp. is a close-ended equity mutual fund launched by Quadravest Inc. The DFN portfolio prides on some of the highest-yielding Canadian companies as mentioned below.
- Bank of Montreal
- Bank of Nova Scotia
- BCE Inc.
- CI Financial Corp.
- CIBC
- Enbridge Inc.
- Manulife Financial
- National Bank of Canada
- Royal Bank
- Sun Life Financial
- TELUS Corporation
- Thomson Reuters Corporation
- Toronto-Dominion Bank
- TransAlta Corporation
- TC Energy Corporation
Split-share companies are a special type of investment that have two types of shares to offer–Class A and Preferred shares. Granted the above list of companies has some of the highest yielding dividends in Canada. But, nothing matches DFN’s current 14.6% yield. The secret is covered call options. These profits boost the fund income which is distributed to Class A common shareholders and Prefered shareholders.
There are many more split-share companies in TSX with very attractive dividend yields. While these are very tempting, keep in mind that Class A share dividends are not guaranteed. Usually, each split-share company has its own benchmarks of performance to pay out dividends for Class A shareholders. Preferred shareholders are guaranteed a dividend return every month, but the yield is not as lucrative as that of Class A. So if you are diving into split shares, make sure to do your research on their Class A distribution consistency.
That’s it for this month, folks. I will catch you in the June update, which is going to be BIG.
Until then, happy investing.
