In September 2017, I received slightly over $100K as a result of the commuted value of my pension plan. I decided to invest 100% of this money into dividend growth stocks. Each month, I publish my results. I don’t do this to brag, I do this to show you it’s possible to build a portfolio during an all-time high market. The market will crash… eventually. In the meantime, I rather cash some juicy dividends!
Is investing like Groundhog Day?
As I spend most of my days reading financial news and analyzing stocks, I skim through lots of headlines. At one point, it really feels like investing is like Groundhog Day; we constantly announce the next bad thing. Therefore, no matter how the stock market really does, we always have a feeling it’s not doing so well (or it’s about to crash).
July 2018 was the highest point of the TSX, and the S&P 500 started its correction in September of the same year. Suddenly, the world was about to crash and burn back in December. Now, nobody seems to realize 2019 recovered all losses and more.
When we were at the peak last year, I didn’t do anything special. I followed my investing strategy.
When we hit the severe correction in November-December, I didn’t do anything special. I followed my investing strategy.
Today, the market is back up close to peak levels. I won’t do anything special. I follow my investing strategy.
I manage a portfolio based on dividend growth investing principles. Companies I hold constantly increase their payout. My portfolio value eventually goes up throughout time. I stick to the plan. I guess investing is like Groundhog Day!
Let’s look at how last month went.
The numbers are as of July 1st, 2019 (during the afternoon):
Canadian portfolio (CAD)
| Company Name | Ticker | Market Value |
| Alimentation Couche-Tard | ATD.B.TO | $7,087.25
|
| Andrew Peller | ADW.A.TO | $5,706.25 |
| National Bank | NA.TO | $4,976.80 |
| Royal Bank | RY.TO | $6,244.20 |
| CAE | CAE.TO | $7,042.00 |
| Enbridge | ENB.TO | $7,615.29 |
| Fortis | FTS.TO | $5,119.29 |
| Intertape Polymer | ITP.TO | $5,523.00 |
| Lassonde Industries | LAS.A.TO | $4,130.28 |
| Magna International | MG.TO | $4,561.20 |
| Cash | $1,329.47 | |
| Total | $59,335.03 |
My account shows a variation of +$1,304.83 (+2.2%) since the last income report.
When I looked at my June 2018 report, I noticed this was the time I sold my position in Shopify (SHOP.TO) and Canopy Growth (WEED.TO). Both were volatile plays where I had put a stop sell. Looking back today, I realize I “cashed a good profit”, but I left lots of money on the table! At least, my current holdings didn’t do bad either (with less volatility).
Andrew Peller announced its 7th dividend increase
Andrew Peller (ADW.A.TO) posted a flat quarter for its sales, but their year-to-date numbers are up by 5%. Sales during the second half of the fiscal year 2019 were impacted by increased competition from new low-priced imported wines and market softness primarily in Western Canada. Management has made investments in the launch of new products, such as Wayne Gretzky No. 99 Rye Lager, and a comprehensive marketing campaign for Peller Family Vineyards to drive future sales growth. The company uses its cash flow to increase its dividend by 4.8% and to pay down its debts (from $171.1M to $154.8M at March 31st). It’s their 7th consecutive dividend increase. Andrew Peller is part of the “3 Canadian underdogs” dividend investors should consider.
CAE is skyrocketing… this is not a simulation!
CAE (CAE.TO) is literally flying with a record quarter as the company surfs on a strong aerospace industry. Annual Civil training centre utilization was 76%, reflecting continued strong usage of existing simulators and the recent deployment of additional simulator capacity to meet new demand from customers. Defence booked orders for $265.0 million. Notable wins include a contract with Boeing to provide a P-8A aircraft simulator for the Royal Air Force and simulator upgrade programs with the U.S. Navy. CAE Healthcare reached several strategic milestones during the year, strengthening its position as the innovation leader in simulation-based healthcare education and training.
Intertape Polymer is fueled by acquisitions
Intertape Polymer (ITP.TO) posted a solid revenue jump as revenue increased 17.1% to $277.8 million, primarily due to the Polyair, Maiweave, and Airtrax acquisitions. EPS dropped by 5%. The decrease was primarily due to an increase in SG&A, an increase in financial costs, mainly due to higher average debt outstanding related to the Polyair Acquisition; Greenfield manufacturing facilities in India; higher average cost of debt, including the impact of the Senior Unsecured Notes, and an increase in income tax expense. Cash flow from operations improved due to a larger decrease in accounts payable in the first quarter of 2019.
You can read about how I managed my portfolio as a Canadian (e.g. mixing both CDN and US investments): Investing the Canadian Way – Tricks I use to Boost My Returns. I discuss my sector allocation, how I manage currency fluctuations and my favorite sectors.
Numbers are as at July 1st, 2019 (during afternoon):
U.S. portfolio (USD)
| Company Name | Ticker | Market Value |
| Apple | AAPL | $6,223.56 |
| BlackRock | BLK | $6,576.57 |
| Disney | DIS | $6,343.20 |
| Garrett Motion | GTX | $45.48 |
| Gentex | GNTX | $5,731.65 |
| Hasbro | HAS | $4,871.85 |
| Lazard | LAZ | $3,507.27 |
| Microsoft | MSFT | $8,103.60 |
| Resideo Tech | REZI | $107.10 |
| Starbucks | SBUX | $7,150.62 |
| Texas Instruments | TXN | $5,815.00 |
| United Parcel Services | UPS | $3,794.35 |
| Visa | V | $8,665.00 |
| Cash | $707.60 | |
| Total | $67,642.85 |
The US total value account shows a variation of +$6,350.61 USD (+10.4%) since the last income report.
Months on the US market are like a roller coaster. After losing 7% in May, I’m up 10% for June. This is one of the reasons why I don’t give too much attention to what’s happening in my portfolio from one month to another. I look at it, I record it on this blog, but I’m not going to scream “panic” or “genius” for each movement. I rather keep my eyes on the horizon and enjoy the sunset.
My entire portfolio quarterly updated!
Each quarter, we run an exclusive report for Dividend Stocks Rock (DSR) members 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 giving all the information about all my holdings. Results have been updated as of June 21st.
Download my portfolio Q2 2019 report.
Dividend income: $445.27 CAD (+39.5%)
This month included a major improvement compared to last year. One of the reasons is the regular dividend increase coming from my holdings (detailed below). However, a good part of my dividend increase for this month comes from a few more additions. When I sold my positions in Shopify and Canopy Growth, I replaced them with dividend payers. This explains why June is my second highest dividend month so far in this portfolio. Here is the dividend growth detailed. The growth is compared to June 2018 (not a necessarily a recent dividend increase):
- Fortis: +5.9%
- Enbridge: +10%
- Magna International: +13.5%
- Lassonde: -26.5%
- Visa: +19%
- UPS: +5.5%
- Microsoft: +9.5%
- Currency factor: flat.
If you wonder what happened with Lassonde, I detailed it here.
When you combine both dividend growth and capital growth in this portfolio, you get great results! I never been looking for high yielding stocks. I think the balance between dividend growth and capital growth is important in one’s portfolio.
Canadian Holdings payouts: $285.73 CAD
- Fortis: $44.55
- Enbridge: $118.82
- Magna International: $33.90
- Lassonde: $12.50
- Intertape Polymer: $55.96
- CAE: $20.00
U.S. Holding payouts: $121.82 USD
- Visa: $12.50
- UPS: $35.52
- Microsoft: $27.60
- BlackRock: $46.20
Total payouts: $445.27 CAD
*I used a USD/CAD conversion rate of 1.3096
Since I started this portfolio in September 2017, I have received a total of $5,142.14 CAD in dividend. Keep in mind that this is a “pure dividend growth portfolio” as no capital can be added into his account (it’s a LIRA). Therefore, all dividend growth is coming from stocks and not from additional capital.
Final thoughts
My portfolio had a great ride so far in 2019. This recovery is so strong that I can now take a 27% hit on my portfolio I would still have a few hundreds over my original amount. This shows you how it’s impossible to know when and by how much the market will crash.
If you are worried it will happen, I suggest you read “Sell Now – It’s About Time Someone Tell You This”. This article will tell you what you should toss in your portfolio and what you should keep.
Nicely done Mike. I’ve been looking at Andrew Peller for a while but haven’t pulled the trigger.
We ended up with over $2,000 in dividend income in June. Finally broke the $2k monthly milestone. 🙂
wow! 2K/monht is amazing! keep up the good work!
Andrew Peller is now up by 15% in my portfolio so it’s a nice safety net (on top of the dividend).
Cheers,
Mike.