In September of 2017, I received slightly over $100K from my former employer which represented the commuted value of my pension plan. I decided to invest 100% of this money in dividend growth stocks.
Each month, I publish my results on those investments. I don’t do this to brag. I do this to show my readers that it is possible to build a lasting portfolio during all sorts of market conditions. The market will inevitably go down, as it did last year. But I continued to enjoy cashing consistent and growing dividends despite that negative market action! And, most importantly, I stayed fully invested in the market and have enjoyed the market recovery in 2020 that has continued into 2021.
As you know, I also take the opportunity during my monthly income report to add some relevant market commentary. This time, you’ll see how I felt the impact of two major investment themes for 2021: inflation and supply chain disruption.
Performance in Review
Let’s start with the numbers as of December 3rd, 2021 (before the bell):
Original amount invested in September 2017 (no additional capital added): $108,760.02.
- Portfolio value: $215,159.79
- Dividends paid: $3,973.02 (TTM)
- Average yield: 1.85%
- 2020 performance: +20.3%
- SPY=18.17%, XIU.TO = 5.27%
- Dividend growth: +7.7%
Total return since inception (Sep 2017- Nov 2021): 97.83%
Annualized return (since September 2017 – 51 months): 17.41%
SPDR® S&P 500 ETF Trust (SPY) annualized return (since Sept 2017): 17.60% (total return 99.20%)
iShares S&P/TSX 60 ETF (XIU.TO) annualized return (since Sept 2017): 11.79% (total return 60.58%)
Sector allocation calculated by DSR PRO
Let’s look at my CDN portfolio. Numbers are as of December 3rd, 2021 (before the bell):
Canadian Portfolio (CAD)
| Company Name | Ticker | Market Value |
| Algonquin Power & Utilities | AQN.TO | 5,888.43 |
| Alimentation Couche-Tard | ATD.B.TO | 17,052.50 |
| Andrew Peller | ADW.A.TO | 4,541.50 |
| National Bank | NA.TO | 7,724.80 |
| Royal Bank | RY.TO | 7,688.40 |
| Brookfield Renewable | BEPC.TO | 1,921.92 |
| CAE | CAE.TO | 6,232.00 |
| Enbridge | ENB.TO | 7,707.07 |
| Fortis | FTS.TO | 5,547.96 |
| Intertape Polymer | ITP.TO | 7,314.00 |
| Magna International | MG.TO | 7,042.70 |
| Sylogist | SYZ.TO | 4,833.03 |
| Cash | 373.42 | |
| Total | $83,867.73 |
My account shows a variation of -$5,647.53 (-6.3%) since the last income report on November 3rd. Many companies disappointed the market in November with their results. This partially explains the poor performance and the other cause is another variant that is killing companies like CAE and Disney in my US portfolio!
I have felt the impact of two major investment themes for 2021: inflation and supply chain disruption. Unfortunately, both themes will continue well into 2022.
Algonquin Power & Utilities annoyed investors with another round of debt and share issuance. The acquisition of Kentucky Power for $2.8B was the reason for their having to raise capital. The utility has been very aggressive with its growth by acquisition strategy over the past 10 years. It paid well, but investors are starting to worry over the massive load of debt and new shares that were created in the process. They are getting penalized for doing what they do best? I’ll be happy, however, to keep this one in my portfolio for a long time.
Alimentation Couche-Tard is feeling pressure on their margins as their expenses have increased. While the 2nd largest convenience store chain reported robust revenue growth (mostly due to fuel sales bouncing back), profits lagged. ATD has avoided the employee shortage crisis so far, but it also had to pay those employees more to keep the company running. Minimum wages won’t be that “minimal” going forward. You can also watch my latest video on ATD below.
Andrew Peller can’t seem to find growth vectors anymore. I’m starting to get seriously annoyed by this one. While the dividend increase is steady, I need more than that moving forward. My portfolio deserves better. Don’t be surprised to see me selling ADW in 2022.
Banks have killed it this quarter! National Bank announced a 23% dividend increase and Royal Bank went for an 11% paycheck raise. My guess is that interest rates will rise in 2022 and banks will enjoy better margins. On the other hand, this may be a rough year for wealth management services as the market usually drops on strong interest rate announcements. In any case, I’ll enjoy more money coming in quarterly from this duo!
I have reviewed all the Canadian Banks Q4 on my YouTube channel. Here it is.
Magna International can’t keep increasing its revenue as chip shortages impact the auto industry. Results were negatively impacted by lower light vehicle production substantially due to continued industry semiconductor chip shortages. This narrative will continue next year, but I’m not worried. As I have said many times, this is a short-term problem and I’m a long-term investor.
Intertape Polymer did well this quarter, but management had to revise its guidance. ITP is another victim of supply chain shortages and port congestion. This has slowed down orders and ITP’s ability to meet their customers’ needs. At least, they will be able to continue passing the inflation from the rising costs of raw materials on to their customers. It’s not like you can run your business without tapes and packaging when you are in the shipping or food business.
I’ll be waiting for Sylogist quarterly earnings as the company didn’t increase its dividend this year. Therefore, I expect a strong growth plan including acquisitions to explain this shift in the dividend growth policy.
Here’s my US portfolio now. Numbers are as of December 3rd, 2021 (before the bell):
U.S. Portfolio (USD)
| Company Name | Ticker | Market Value |
| Apple | AAPL | 15,720.96 |
| BlackRock | BLK | 12,863.90 |
| Disney | DIS | 6,624.00 |
| Gentex | GNTX | 8,133.35 |
| Lazard | LAZ | 4,488.00 |
| Microsoft | MSFT | 19,769.40 |
| Starbucks | SBUX | 9,470.70 |
| Texas Instruments | TXN | 9,679.00 |
| VF Corporation | VFC | 5,999.67 |
| Visa | V | 9,914.50 |
| Cash | 196.41 | |
| Total | $102,859.89 | |
The US total value account shows a variation of -$2,017.34 (-1.93%) since the last income report on November 3rd. It has been a relatively quiet month for my holdings. Some went up, some went down. Some concerns rose as Amazon announced it will block Visa cards in the UK for 2022. The stock was already not doing well on the market, it was enough to make it plunge a little deeper. Visa is down this year, but I expect the company to keep posting double-digit growth in the coming years. Visa is known for rapidly adapting to its changing markets.
My Entire Portfolio Updated for Q3 2021
Each quarter, we run an exclusive report for Dividend Stocks Rock (DSR) members who subscribe to our very special additional service called DSR PRO. The PRO report includes a summary of each company’s earnings report for the period. We have been doing this for an entire year now and I wanted to share my own DSR PRO report for this portfolio. You can download the full PDF showing all the information about all my holdings. Results have been updated as of September 2021.
Download my portfolio Q3 2021 report.
Dividend Income: $336.60 CAD (-7% vs November 2020)
The largest difference this month was the absence of Hasbro’s dividend in my portfolio ($31.28 last year). Ironically, the conversion rate was pretty much the same (1.2754 vs 1.2764 this year). Canadian banks just announced their dividend increases that will come into play in 2022. Apple, Texas Instruments, and Starbucks keep doing what they do best (low yields, but high dividend growth!) and Lazard too (meaning it keeps getting on my nerves). I’ll take some time during the holidays to clear this one off the books!
Here’s the detail of my dividend payments.
Dividend growth (over the past 12 months):
- National Bank: 0% (but just announced a 23% dividend increase!)
- Royal Bank: 0% (but just announced an 11% dividend increase!)
- Apple: +7.3%
- Texas Instruments: +12.75%
- Lazard: 0% (I’m really upset!)
- Starbucks: 8.9%
- Conversion: 0%
Canadian Holding payouts: $121.60 CAD
- National Bank: $56.80
- Royal Bank: $64.80
U.S. Holding payouts: $168.21 USD
- Apple: $21.12
- Texas Instruments: $57.50
- Lazard: $47.94
- Starbucks: $41.65
Total payouts: $336.30 CAD
*I used a USD/CAD conversion rate of 1.2764
Since I started this portfolio in September 2017, I have received a total of $14,413.99 CAD in dividends. Keep in mind that this is a “pure dividend growth portfolio” as no capital can be added into this account other than retained and/or reinvested dividends. Therefore, all dividend growth is coming from the stocks and not from any additional capital being added to the account.
Final Thoughts
I have made my peace and I’ll be selling Lazard. The reason why I haven’t done it yet is mostly related to the fact that I’m working a lot on my most significant dividend payer: Dividend Stocks Rock! With a second massive software upgrade this year (in February we installed a completely new platform including the stock screener, and now we have added a revamped DSR PRO section, new quarterly reports, and a database including non-dividend paying stocks, ETFs, CEFs, and preferred shares), I don’t have much time to take care of my personal business. It’s a good thing that most of my portfolio is on autopilot! That’s another great advantage of dividend growth investing!
Cheers,
Mike.
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