Dividend Income – May 2018

Dividend Income - May 2018 - HeaderI hope you don’t sell in May. That’s not a strategy worth following. That would be like timing the market and blindly doing it. I prefer to stay put, earn my dividend while it’s slow, average down with the DRIP and then ride the wave back up.

Stock Trades

I made no trades in May but I have decided to stop my DRIP in my RRSP account. I earn a decent amount of dividend and would like to start deploying the cumulative amount towards the stock that needs it most. The reality is that most stocks are worth over $100 and it’s pretty difficult to DRIP each stock anyways.

While I have not made any trades, I have spent some time with my accounting to derive the rate of return (ROR) of my individual holdings per account. The results provide a ROR per stocks as per the table below. The ROR is simply using the XIRR function.

Value today$5,000.00
Invested$4,000.00
Total Growth25.00%
June 12, 2018-$5,000.00
April 1, 2018$1,000.00
April 1, 2017$1,000.00
April 1, 2016$1,000.00
April 1, 2015$1,000.00
Annual ROR13.37%

There are multiple ways to look at performance. Above, you can see the growth of the stock and the annual rate of return. What do you make of the statement “My stock is up 50%”? The big question you should ask is “since when?”. A 50% growth over 1 year is amazing but a 50% growth over 15 years, that’s not much to brag about. I already had the total growth since that’s easy to calculate as you only need the top 2 values (total value and cost) but I wanted to really understand the performance of the individual holdings. To get the ROR for each holdings, I needed all the transactions.

I have some interesting observations considering there are a few holdings I have across a few accounts and I have made purchases at different times. I am able to see if there is averaging over time and performance convergence. With that said, here are my top 5 performing stocks per the ROR as of writing. Don’t get me wrong, I don’t expect this level of performance to continue every year.

  1. 44.20% AbbVie NYSE:ABBV
  2. 37.06% Visa NYSE:V
  3. 34.70% Costco NASDAQ:COST
  4. 27.40% Microsoft NASDAQ:MSFT
  5. 24.88% Apple NASDAQ:AAPL

Not surprised I would expect considering some of the names. The technology sector is definitely a growth sector. Here is how my TD Bank TSE:TD holdings perform across each account.

  • Account A: 25.02% (position started in 2017 – Just got lucky with the timing)
  • Account B: 14.20% (position started in 2017)
  • Account C: 12.90% (position started in 2012)

Having the data can really put into perspective what you should expect of the different sectors.

Sector Diversification – May 2018

My sector diversification is a snapshot on a specific day. On any day it fluctuates considering any market movement will adjust the ratios. I don’t sweat it. When I have money to contribute, the sector that is behind is the one I research first. I may not invest in the sector that is behind in case one of my holdings has provided me with an opportunity.

Portfolio Allocation - May 2018

Stock Selection Made Easy

Dividend Income

My May 2018 dividend income is $1,407.98. Compared with May 2017, my May income is up $291. There really isn’t much to analyze when it comes to the monthly income. What really matters is the annual growth and that’s driven by dividend growth and new money invested.

YearDividendsGrowth
2010$3,745.53
2011$4,752.9026.90%
2012$5,782.5721.66%
2013$6,303.699.01%
2014$8,218.1430.37%
2015$10,563.8828.54%
2016$12,658.0919.82%
2017$15,703.7124.06%
2018$18,492.7917.76%

Dividend Income - May 2018

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.

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