In the previous post I blabbered on about how amazing dividends are. They really are amazing- once you start investing in them you can’t stop! They’re like Pringles Chips. You can’t have just one.
I didn’t realize their potential until recently, and since then, my portfolio has been lookin’ pretty fine. I’ve recouped all of my losses since I started investing in the first place about 5 years ago (the losses are thanks to the dreaded “other investments” )(NB: the best way to learn how to invest is to do it and learn from your own experience!), and am well in the glorious green.
A few months ago, I calculated the dividend yields of all the dividend producing stocks I own. Doing this reinforces me NOT SELL prematurely because of the dividend yield I will get per year. It switches my mentality from: “sell this thing and take profit” to “if it dips, then I’m picking up more”. My goal is to be able to increase my positions on dividend yielding stock, so that I can not only reinvest it to build my portfolio further, but hopefully one day it can replace my income (or a large portion of it) and I can retire early at 35.
Wishful thinking, huh?
I wrote the % return per annum and the resultant amount in $ that I would get per year with the number of stocks I own.
Without further delay, here’s a list of my annual yield from dividends (and income trust distributions):
|Stock||Percentage Dividend Yield||Amount per Year|
|XDV||3.6% (but has MER)||$73|
|CPD||5.1% (has small MER)||$25|
|SU||0.5%||$12 (not so hot!)|
I hope to increase my positions on more dividend paying stocks and slowly increase my passive income this way. Of course, this will look a little different next year, when the Income Trusts (those with a .UN at the end) that I have in my TFSA account are going to be incorporated.
Note: The Income Trust distributions are NOT dividends- because these companies aren’t corporations- they are taxed different (and taxed heavily) so try not to hold income trusts outside of TFSA or an RRSP or else you will be taxed to the nines. After 2011. some of the income trust companies that I own will keep their yield, and some of the companies will have their yields slashed, but at least it will be tax efficient.
There you have it. This list has changed slightly since I calculated it a few months ago, for example, I got rid of LUX because any dividends paid out from this is considered foreign income, hence it’s taxed at 100% my marginal rate= NOT tax efficient.
If you like dividend portfolio voyeurism (really, who doesn’t?) DividendLover.ca has a super detailed excel spreadsheet.
Readers, do you have any favourite dividend yielding equities you like?