Dividend Increase | Toronto-Dominion Bank (TD)

Dividend | Dividend Growth | Financial Independence | Freedom | Passive Income
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks TD for the dividend increase!
There's an old Chinese proverb that says "the best time to plant a tree was 20 years ago, the next best time is now".  The reason for this is that it takes time for a tree to grow and prosper and for you to start reaping its benefits.  Dividend growth investing is much the same way.  It takes consistent saving and investing as well as time and patience to let the power of dividend growth take hold.

That's why one of my favorite things is when one of the companies I own decides to pay out more in dividends.  You mean I get a pay raise just for owning a small piece of a company?  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.  

On February 27th the Board of Directors at Toronto-Dominion Bank approved an increase in the quarterly dividend payment.  The dividend was increased from $0.74 CAD to $0.79 CAD.  That works out to a solid 6.8% increase.  Toronto Dominion is a Dividend Challenger with 9 consecutive years of dividend growth.  Shares currently yield 4.56% based on the new annualized payout.

The new dividend will be payable April 30th to shareholders of record as of April 9th.  

Since I own 23 shares of Toronto Dominion in my FI Portfolio, this raise increased my forward 12-month dividends by $3.43.  This is the 5th dividend increase I've received from Toronto Dominion since initiating a position in July 2015.  The total organic dividend growth over that time comes to 54.9%.

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

Toronto Dominion has been paying dividends to shareholders since 1857.  That's a truly incredible record considering that covers 163 years.  There's been some hiccups along the way with pauses to dividend growth; most recently in 2010 during the financial crisis and prior to that from 1991 to 1993.

Dating back to 1970, Toronto Dominion's 5-year annualized dividend growth has ranged from 2.1% to 20.9% with an average of 11.4% and a median of 11.4%.

The rolling 10-year annualized dividend growth rates have ranged from 7.3% to 16.0% with an average of 11.4% and a median of 10.8%.

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.


Wrap Up

This raise increased my forward dividends by $3.43 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my FI Portfolio's current yield of 3.24% this raise is like I invested an extra $106 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.

I've now received 15 raises from 15 of the 54 companies in my FI Portfolio increasing my forward-12 month dividends by $107.49.

My FI Portfolio's forward-12 month dividends are $8,053.94.  Including my FolioFirst portfolio's forward dividends of $101.84 brings my total taxable accounts dividends to $8,155.78.  My Roth IRA's forward 12-month dividends are $663.39.  My Rollover IRA's forward dividends are $2,558.12.  Across all accounts I can expect to receive $11,377.29 in dividends over the next year.

I've also started compiling dividend data on many of the companies that I own or would like to own.  Toronto Dominion's can be found here which includes the dividend history (as far back as I can find without spending hours hunting it down), rolling dividend growth rates and dividend yield theory.  To see other companies that I've already gathered the data on you can check out the Dividend Companies page.  Check it out and let me know what you think.

Do you own shares of Toronto Dominion?  What about any of the other Canadian banks?

Please share your thoughts below.


  1. Nice Article. Thank you for sharing the informative article with us. Stock Investor provides latest Indian stock market news and Live BSE/NSE Sensex & Nifty updates.Find the relevant updates regarding Buy & Sell....


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