One Raise at a Time | More Dividends From Canada

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Getting a pay raise while sitting on the couch?  Sign me up!  Thanks TD Bank for yet another dividend increase!
Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?  Dividend growth investing is far from a get rich quick investment strategy, rather you need to remain focused on the long term goal to be successful.

On Thursday last week the Board of Directors at Toronto Dominion Bank (TD) announced an increase to their quarterly dividend payout.  The dividend was increased from $0.60 CAD per share up to $0.67 CAD per share.  That's an excellent 11.7% raise.  Toronto Dominion was previously a Dividend Contender with 16 consecutive years of dividend increases; however, dividend growth was put on hold in 2010 in the midst of the "Great Financial Crisis".  TD Bank has since given investors a dividend increase every year making them a Dividend Challenger with 7 consecutive years of increases.  Shares currently yield 3.60% based on the new annualized payout.

Since I own 23 shares of TD in my FI Portfolio this raise increased my forward 12-month dividends by $5.01.  This is the 3rd dividend increase I've received from Toronto Dominion since initiating a position in July 2015.  Cumulatively, the organic dividend growth has totaled to 31.4% over that time.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 4.6%.  That's dividend growth investing at work.

A full screen version of this chart can be found here.

Much like Bank of Nova Scotia, Toronto Dominion Bank has a very lengthy history of paying dividends to shareholders.  In fact they've paid dividends every year since 1857.  You know for 160+ years now.  The dividend hasn't been increased every single year, but more often than not the dividend moves higher over time and far outpacing inflation.

Since 1970 Toronto Dominion has amassed a 20 year growth streak, followed by a 3 year pause, then resumed with a 16 year growth streak before the 1 year pause due to the aforementioned Great Financial Crisis and 2018 will mark 8 straight years of raises.  As long as the raises come over time I'm more than happy to wait out a few lulls in between.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1970 can be found in the following chart.  

A full screen version of this chart can be found here.

*2018's dividend assumes the new quarterly payout of $0.185 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $5.01 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.83% this raise is like I invested an extra $177 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

So far in 2018 I've received 16 dividend increases combining to increase my forward 12-month dividends by $143.64.  

My FI Portfolio's forward-12 month dividends increased to $6,028.84.  Including my FolioFirst portfolio's forward dividends of $78.47 brings my total taxable accounts dividends to $6,107.31.  My Roth IRA's forward 12-month dividends remain at $336.46.

How much leeway do you give companies that freeze their dividend from time to time?

Please share your thoughts below.


  1. Still sitting out most of the Canadian stocks due to the additional 15% tax levied on the dividends. Thanks JC. Tom

    1. Tom,

      The 15% tax for US owners of Canadian stocks is a pain, but to me they're still solid investments. Especially when you factor in the prospect of a falling dollar too.

      All the best.

  2. Nice recap, JC. It is great to see additional increases. And you're right - receiving pay hikes as dividend holders for simply owning shares in companies with good businesses is a great way to continue to generate wealth. As you highlighted, it also can keep inflation at bay. - Mike

    1. Mike,

      Dividend increases are always great to see. Who doesn't like getting paid more for doing nothing? March should be pretty slow barring some unexpected increases, but there should be one coming my way tomorrow too which I'll be eagerly awaiting.

      Thanks for stopping by!


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