Sunday, 31 August 2014

Recent Dividend Increases!

Dividend Increases! These two little words are exactly what I like to see from companies whose shares I own. They generally mean business is going very well and so the companies are willing and able to give back a bit more of their profits to investors! This month has been quite good for my portfolio, with three these three companies declaring dividend increases: Algonquin Power & Utilities (AQN), the Bank of Nova Scotia (BNS) and the Royal Bank of Canada (RY). It's just so nice to be getting paid more, even if it is just a few cents more for simply holding onto a quality company and looking forward to higher dividend payouts and hopefully more dividend increases in the future.

Here is a breakdown of the dividend increases and how they are affecting my portfolio.
Algonquin Power & Utilities (AQN):
CDN$.085 to US$.0875 or ~CDN$.0955, an increase of 12.4%, dividend yield of 4.22%

    This month they did a few things to their dividends that have had an impact on dividends for both Canadian and American shareholders. First, they changed their dividend payout from Canadian dollars to American dollars. Which means all Canadian shareholders receive an extra ~9 cents per dollar, and American's 'recover' an ~8 cents per dollar due to exchange rates ( As of August 31st).

   Additionally, the dividend went from CDN$.085 to US$.0875, which means that Canadians are now receiving ~$.0955 per quarter; this however will fluctuate slightly as the exchange moves around. Just think, if the exchange rate goes back to 1999 levels, the equivalent dividend would be CDN$.52! Keep in mind it could go the other way though. I have mixed feelings about this development, I do like getting a roughly 12.4% dividend hike, however I also value consistency and like knowing exactly how much income my shares will give me.
This dividend increase has increased my yearly income by $3.74.

Bank of Nova Scotia (BNS):
CDN$ .64 to $.66, an increase of 3.1% , dividend yield of 3.66%

   Staying in line with analyst expectations BNS had a great quarter, making 604 million dollars more than they did in the previous years quarter! With such great on going results, they increased the dividend by $.02, an increase of 3.1% which may not seem like much except that this is the second dividend increase this year! BNS is currently a small position of mine, consisting of only 4% of my portfolio at this time, so sadly the net income gain for me is quite small. In the long run though, all those pennies make a difference!

This dividend increase has increased my yearly income by $.48.

Royal Bank of Canada (RY):
CDN$.71 to .75, an increase of 6%, dividend yield of 3.71%

    Just like BNS, Canada's largest bank by market capitalization had another record breaking quarter and has rewarded shareholders by increasing their dividend by a healthy 6%. Paying out an additional $.04 per quarter to put their dividend at $.75, this is also their second dividend increase of the year! I really do appreciate strong companies consistently rewarding their shareholders and I am looking forward to additional increases in the years to come.

This dividend increase has increased my yearly income by $1.12.

    Overall a pretty good month for dividend increases for my portfolio, with a total an increase of $5.34 in dividend income per year. That's an increase in income roughly equivalent to having bought two more shares of BNS! Having only been 'actively' investing and building my portfolio for about a year now, its very nice to start seeing how dividend increases are making a difference on the portfolios income and comparing the previous years monthly income getting beating by this years and looking forwards to next August's being even better!

    Did any of you have any nice dividend increases this month? Would love to hear about them, I'll hopefully have some fresh capital to deploy in September. Thanks for stopping by.

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