In September of 2017, I obtained barely over $100K from my former employer, representing the commuted worth of my pension plan. I made a decision to take a position 100% of this cash in dividend progress shares.
Every month, I publish my outcomes on these investments. I don’t do that to brag. I do that to point out my readers that it’s attainable to construct a long-lasting portfolio throughout all market circumstances. Some months we would seem to underperform, however you could belief the method over the long run to judge our efficiency extra precisely.
Efficiency in Overview
Let’s begin with the numbers as of September 2nd, 2022 (earlier than the bell):
Unique quantity invested in September 2017 (no extra capital added): $108,760.02.
- Portfolio worth: $202,761.78
- Dividends paid: $4,379.58 (TTM)
- Common yield: 2.16%
- 2021 efficiency: +16.78%
- SPY= 28.75%, XIU.TO = 28.05%
- Dividend progress: +3.14%
Whole return since inception (Sep 2017- August 2022): 86.43%
Annualized return (since September 2017 – 60 months): 13.27%
Sector allocation calculated by DSR PRO
Quitting My Job, And Investing My Pension Plan
Wow… time actually does fly once we are having a lot enjoyable! 5 years in the past, I returned from a one-year RV journey with no cash and no job. To be truthful, all my cash was invested in my retirement account, and I didn’t have a security web as a result of I used all my assets to finance our journey. A call, to this date, that seems to have been the perfect resolution I ever made.
The second-best resolution I made (moreover marrying my spouse, after all) was to give up my job upon my return from Central America and focus all my consideration on Dividend Shares Rock (DSR). In September of 2017, I made one other essential resolution: I took the cash I had in my former employer’s pension plan and determined to handle it myself. It was considerably demanding because it was the majority of my retirement nest egg. Plus, the market was buying and selling at its all-time excessive, and most buyers agreed the market was vastly overvalued at the moment.
5 years later, I’ve executed higher than the pension plan managers (they’ve guidelines to comply with, and I perceive that). However most significantly, I can see the fruits of my labor. I’ve constructed and improved DSR as I managed my portfolio. I created instruments for my members and used the identical instruments to make sure that I might retire stress-free. I’ve discovered a lot throughout these previous 5 years as an entrepreneur and investor.
Be true to your self and assist others
The creation of DSR was first prompted by my want to assist individuals with their investments. I’ve seen that too many buyers have unanswered questions or search for the assist they’ll’t get from their advisor or their financial institution. My plan was to create a useful resource for every investor so they may really feel empowered in making their investments. It’s enjoyable to construct a enterprise and see it thrive, however it’s much more significant while you see your members succeed. I thank everybody for his or her belief, and I pledge to proceed to ship on our promise of serving to you make investments with confidence and conviction.
Subsequent week, on Thursday, September 22nd, I’ll host a webinar on investing throughout a disaster. I’ll handle the fragile state of affairs of being a retiree (or soon-to-be retired particular person) on this loopy market.
Save your spot now (restricted to 500 stay attendees).
We all know nothing about valuation
Once I obtained my pension examine in early September of 2017, many readers recommended that I wait earlier than investing the cash. I took about 3 months to totally make investments my cash as my consideration was cut up between constructing my enterprise and investing my pension plan. Subsequently, I purchased on the market’s 5-year peak when everyone stated the market was vastly overvalued. Curiously, I by no means went under the unique quantity invested since then. Not even on the backside of the 2018 bear market, nor on the backside of the 2020 covid crash.
Time out there beats market timing
I’ve made errors with this portfolio (Lassonde Industries and Andrew Peller for instance), and I additionally made some nice strikes (like Alimentation Couche-Tard, Apple, and Microsoft). Nevertheless, my portfolio nonetheless beat the market after 5 years and two bear markets (and shortly 3) as a result of I stayed invested the entire time. Choosing high-quality dividend growers will make you a winner over the long term. You will need to belief the method, keep targeted, and keep out there!
Dividend progress investing works throughout good occasions and unhealthy occasions
If you’re not a DSR member, it’s possible you’ll not know, however my “veterans” know that my portfolio even ended 2018 on a optimistic observe. Whereas most buyers had been down 5% to 10% (the S&P 500 ended the yr at -4.5% and the TSX at -7.8%, together with dividends), my portfolio was up by just a few factors. What was the key? A good foreign money shift and regular dividends are paid to reduce losses. I’m not in optimistic territory this yr, however I’m doing a lot better than the market. These regular funds proceed to work their magic whereas I keep invested.
Take dangers; life should be enjoyable
This one isn’t about investing; it’s about life basically. To many people, I took an enormous threat by quitting a 6-figure job padded with a bullet-proof pension plan. However I made a decision to have enjoyable as a substitute. Quitting my job wasn’t a lot about taking a threat. In reality, I felt it was a option to safe my future monetary state of affairs. Being in management and absolutely chargeable for your funds are the keys to attaining a profitable retirement. At present, I don’t assume I’m employable anymore. I simply love doing what I do and relish the liberty to decide on what I do every day.
If you happen to do what you like, you don’t should work
This one appears apparent, nevertheless it takes every part it’s a must to make it occur. You will need to go towards social strain about what is usually accepted, however when you actually do what you like, you gained’t should work a single day of your life.
More often than not, I select to remain at my laptop to complete a publication or learn a monetary article. I simply love doing what I do. I hope I’ve efficiently transferred a few of that keenness to you while you learn my publication, watch my webinars, or take heed to my podcasts!
Smith Manoeuvre Replace
To this point, I’m breaking even with my technique. I admit that I didn’t anticipate a lot from this portfolio over just a few months. I nonetheless want to offer it a while to carry out (particularly contemplating this loopy market).
I need to provoke a pause in my SM contributions. Within the coming months, I’ll keep my funding replace, however I can’t add one other $500 month-to-month for awhile. My journey to Africa received uncontrolled and I need to take just a few months to get well financially. While you do a leveraged technique, it’s best to by no means make investments the cash you don’t have. I’m following my very own recommendation. I’ll resume my month-to-month investments shortly, however I might moderately play it secure within the meantime.
Right here’s my portfolio as of September 2nd, 2022 (earlier than the bell):
|Firm Title||Ticker||Sector||Market Worth|
|Canadian Web REIT||NET.UN. V||Actual Property||$422.22|
|Nationwide Financial institution||NA.TO||Financials||$521.88|
Let’s take a look at my CDN portfolio. Numbers are as of September 2nd, 2022 (earlier than the bell):
Canadian Portfolio (CAD)
|Firm Title||Ticker||Sector||Market Worth|
|Algonquin Energy & Utilities||AQN.TO||Utilities||$7,531.02|
|Alimentation Couche-Tard||ATD.B.TO||Cons. Staples||$21.098.43|
|Granite REIT||GRT.UN.TO||Actual Property||$9,382.40|
|Magna Worldwide||MG.TO||Cons. Discre.||$5,247.90|
|Nationwide Financial institution||NA.TO||Financials||$10,524.58|
|Royal Financial institution||RY.TO||Monetary||$7,313.40|
My account reveals a variation of -$4,485.01 (-4.7%) because the final earnings report on August 4th. Mockingly, I misplaced about the identical sum of money I made the final month. All that to say that when monitoring your portfolio month-to-month, don’t go loopy on short-term fluctuations (good or unhealthy!)
There have been a number of Canadian shares reported previously few weeks; right here’s my evaluate:
Algonquin Energy & Utilities
Algonquin reported robust income progress of 18%, largely pushed by latest acquisitions. Adjusted EPS was up 7%. The utility firm accomplished two initiatives just lately. In April, the Blue Hill Wind Facility began producing energy (175 MW) in Saskatchewan. In August, the Renewable Vitality Group accomplished its acquisition of Sandhill Superior Biofuels. Earlier investments are beginning to pay some severe money flows!
Alimentation Couche-Tard is just good!
ATD beat analysts’ expectations with robust progress (Income up 37%, EPS up 20%). Outcomes had been pushed by larger street transportation gas margins, comfort shops’ natural progress and share buybacks. What’s to not love? Even higher, the corporate introduced it should present 7,000 of its comfort shops (largely Couche-Tard and Circle Ok) with AI-powered self-checkout cashiers. ATD will even create a reward program to know extra about its prospects (spending habits, quantities, time, kind of purchases, and many others.).
We now have additionally mentioned ATD among the many Greatest Information from Q3 on this latest podcast episode.
Brookfield Renewable retains rising
Brookfield Renewable reported FFO of $294 million or $0.46 per Unit for the three months ended June 30, 2022, a ten% enhance on a per Unit foundation. Progress was pushed by robust asset availability, larger energy costs, and continued progress by way of improvement and acquisitions. The corporate continued advancing many initiatives and closed or agreed to take a position $3 billion throughout numerous transactions and areas.
CAE received bombed!
CAE created a bomb with this quarter. Whereas income jumped 24% (bolstered by acquisitions), CAE reported adjusted EPS of $0.06, down by 68% and lowered its outlook for the present yr. CAE is going through main headwinds within the protection sector, particularly provide chain pressures, labor shortages, and a slower protection contracting surroundings leading to unfavorable contract revenue changes in Protection. No less than, Civil aviation reported income progress of 11% and Working earnings progress of 26%. We imagine CAE’s headwinds within the protection sector gained’t final eternally and the corporate will report stronger earnings in 2023.
Enbridge retains flooding my account with dividends
Enbridge reported an okay quarter, however the market was upset by the shortage of EPS progress. Nevertheless, the distributable money circulation (DCF) was up from $2.5B to $2.7B. We’re speaking about a rise from $1.24 to $1.36 (+10%) on a per-share foundation. A dividend of $0.86 brings the payout ratio for the quarter to 63.2%, consistent with the corporate’s goal. Administration reaffirmed 2022 full-year steerage vary for EBITDA of $15B to $15.6B and DCF per share of $5.20 to $5.50 (payout to be between 62.5% and 66%).
Fortis is boring and that’s what I like about it
Fortis reported Q2 2022 EPS of $0.57, a 3.6% enhance in comparison with the identical interval final yr, and lacking estimates by $0.02. Income reported for the quarter was $1.94B, a 13% enhance versus Q2 2021, and beating estimates by $166.80M. Progress in earnings was pushed by charge base progress and better earnings from the vitality infrastructure phase. The next U.S.-to-Canadian international alternate charge additionally favorably impacted outcomes. Progress in earnings was partially offset by losses on investments that assist retirement advantages at UNS Vitality and ITC, reflecting market circumstances. Fortis achieved a 20% discount in Scope 1 emissions by way of 2021.
Granite REIT retains ramping up AFFO double-digit
Granite REIT reported one other strong quarter with FFO up 8% and income up 17%. The AFFO payout ratio was 75% for the second quarter of 2022 in comparison with 79% within the second quarter of 2021. Progress was fueled primarily by web acquisition exercise starting within the second quarter of 2021. Similar property web working progress was 3.6%, exhibiting how lease will increase can no less than partially battle inflation. Granite additionally accomplished mass grading at its improvement web site in Brantford, Ontario and after the quarters finish signed an approximate 20-year lease settlement with a number one producer of chocolate and cocoa merchandise for 0.4 million sq. toes.
Magna Worldwide did higher than anticipated
Magna Worldwide reported Q2 2022 EPS of $0.83, lacking estimates by $0.09. Income reported for the quarter was $9.36B, representing a 4% enhance when in comparison with Q2 2021, and beating estimates by $437.12M. Income progress was primarily pushed by the elevated manufacturing of sunshine autos of two%, largely pushed by a 14% enhance in North America. EBIT as a share of gross sales decreased to three.8% in comparison with 6.2%, largely due to larger web manufacturing enter prices, in addition to working inefficiencies and different prices at a facility in Europe. Lastly, the corporate reported a dividend fee of $0.45, which was flat in comparison with the earlier quarter.
Nationwide Financial institution is robust through the storm
Nationwide Financial institution reported flat EPS (web earnings down 2%), however income grew by 8%. Income grew throughout all segments, however larger PCLs for U.S. + Intl phase crashed the earnings social gathering. Private & Industrial earnings was up 11%, bolstered by mortgage quantity progress and stronger web curiosity margin. Wealth Administration was up 10%, largely pushed by progress in web curiosity earnings. Monetary Markets was up 12% on stronger income. U.S. + Intl phase was down 22% as a result of larger PCLs (however income was up 10%). In different phrases, if PCLs aren’t realized, Nationwide Financial institution will make large cash subsequent yr for a similar quarter.
Royal Financial institution received burnt by Provisions for Credit score Losses (PCLs)
Royal Financial institution reported a double-digit EPS decline of 15%. Outcomes included a provision for credit score lack of $340M (vs -$540M final yr) because the financial panorama will get darker. Private & Industrial Banking was down 4%, largely as a result of PCLs. Outcomes had been partially offset by mortgage progress (+10%) and deposits (+9%). Wealth Administration did nicely at +4%, fueled by robust quantity progress. Insurance coverage was down 21%, primarily as a result of impression of recent longevity reinsurance contracts within the prior yr. Capital Market was down 58%, as a result of impression from mortgage underwriting markdowns of $385M primarily within the U.S., largely pushed by difficult market circumstances.
Sylogist is doing one thing good (about time!)
Lastly! Sylogist is placing a smile on buyers’ faces as the corporate reported report income of $13.7M (up 44%) and a rise of fifty% in EPS. We aren’t out of the woods but, nevertheless it’s a step in the fitting course. A lot of the progress was pushed by latest acquisitions, however the firm nonetheless reported natural progress of seven%. Recurring revenues from subscriptions and upkeep had been $9.0 million, in comparison with $7.9 million, a rise of 13%. Up to now two quarters, we have now seen robust income progress and now EPS is again with optimistic numbers. We anticipate one other robust quarter this fall.
Right here’s my US portfolio now. Numbers are as of September 2nd, 2022 (earlier than the bell):
U.S. Portfolio (USD)
|Firm Title||Ticker||Sector||Market Worth|
|Texas Devices||TXN||Inf. Know-how||$8,308.00|
|VF Company||VFC||Cons. Discret.||$3,354.21|
The US whole worth account reveals a variation of -$4,145.47 (-4.6%) because the final earnings report on August 4th. There was solely Disney left to report their earnings in August. Disney is again in enterprise child! The corporate reported a robust quarter as Disney Parks income jumped 70% to $7.39B. Total, EPS was up 36% whereas income jumped 26%. One other nice piece of stories is that DIS is now tied to the world largest streaming providers in time period of subscribers (exhausting to imagine, proper?). The corporate added 14.4M Disney+ subscribers, a 31% year-over-year leap that introduced that service to 152.1M subscribers. If you happen to mix all providers (Disney+, Hulu, ESPN+), you get 221.1M subscribers vs 221.67M for Netflix.
My Complete Portfolio Up to date for Q3 2022
Every quarter, we run an unique report for Dividend Shares Rock (DSR) members who subscribe to our particular extra service, DSR PRO. The PRO report features a abstract of every firm’s earnings report for the interval. We now have been doing this for a complete yr now and I needed to share my very own DSR PRO report for this portfolio. You possibly can obtain the total PDF exhibiting all of the details about all my holdings. Outcomes have been up to date as of July 7th, 2022.
Dividend Revenue: $414.77 CAD (+29.60% vs August 2021)
It was an important month by way of dividend funds! In reality, that is the place my focus is, particularly throughout downturns! Once I see that my portfolio generates extra earnings yr after yr, I do know the companies I personal are wholesome. Subsequently, the worth of their shares isn’t related.
This month, my portfolio’s dividend was bolstered by extra shares of Nationwide Financial institution, new funds from Granite and several other dividend will increase over the previous 12 months (Royal Financial institution, Starbucks, and Texas Devices).
I obtained much less in Apple dividends since I bought just a few shares alongside the way in which whereas I needed to kiss my Lazard share goodbye.
Lastly, the USD is getting stronger because the market is weaker (+6%).
Right here’s the element of my dividend funds.
Dividend progress (over the previous 12 months):
- Magna Intl: (paid in August 2021)
- Royal Financial institution: +18.5%
- Granite: new
- Nationwide Financial institution: +96% (added shares)
- Starbucks: +8.9%
- Texas Devices: +12.74%
- Apple: -18% (bought shares)
- Foreign money issue: +6%
Canadian Holding payouts: $261.63 CAD
- Magna Intl: $40.45
- Royal Financial institution: $76.80
- Granite: $33.06
- Nationwide Financial institution: $111.32
U.S. Holding payouts: $116.40 USD
- Starbucks: $41.65
- Texas Devices: $57.50
- Apple: $17.25
Whole payouts: $414.77 CAD
*I used a USD/CAD conversion charge of 1.3156
Since I began this portfolio in September 2017, I’ve obtained a complete of $17,752.14 CAD in dividends. Keep in mind that this can be a “pure dividend progress portfolio” as no capital might be added to this account apart from retained and/or reinvested dividends. Subsequently, all dividend progress comes from the shares and never from any extra capital added to the account.
I’ve seen how the USD has gained energy over the CAD over the previous few weeks. This can be the proper alternative to promote some shares of Apple as I highlighted in my earlier publication. I may money acquire on just a few shares after which profit from the robust USD to switch cash into CAD.