Sunday, January 16, 2022

14 Monthly Paying Canadian Dividend Growers for 2022

The 15th and last day of the month are special to me as I receive dividends from some companies in my portfolio that pay monthly. On the 15th, I receive dividends from Granite REIT, Canadian Apartment REIT, CT REIT and Realty Income. On the last day of the month, A&W Revenue Royalties Income Fund pays me my monthly distribution. If you get pleasure from seeing regular dividends coming into your portfolio each month, and you especially enjoy seeing them grow over time, the following table might be of interest to you. 

Using the Canadian Dividend All-Star list from December 31, 2021, I determined the monthly dividend growers for 2022. To be included, companies had to pay a monthly dividend, increase their distribution at least once in the last 12 months, and have a minimum 5-year history of annually increasing their payouts. From the 93 companies appearing on the initial Canadian Dividend All-Star list, there were only 15 who paid dividends monthly (the rest are quarterly payers). Sadly, I had to remove Chartwell Retirement Residences who had not raised their distributions in almost two years <- probably a good thing given the pandemic they have been navigating. The resulting 14 companies included nine real estate investment trusts (REITs). As the payout ratios and valuations of REITs are usually calculated based on funds from operations (FFO) or adjusted funds from operations (AFFO), looking at the EPS payout is not particularly relevant for these companies. For your browsing pleasure, here are the 14 monthly dividend payers heading into 2022:

CompanyDividend Growth Streak1-Yr Stock Price ReturnDiv Yield % (CAD)

[USD Ex = 1.2641]
1-yr DGR
3-yr DGR
5-yr DGR
TTM EPS Payout Ratio %
Granite REIT1135.30%2.94%3.30%3.30%4.40%23%
Allied Properties REIT1016.20%3.87%3.10%2.80%2.50%59%
Canadian Apartment REIT1019.90%2.42%2.10%2.40%2.60%20%
Canadian Net REIT1020.00%4.25%17.40%14.20%13.30%35%
Firm Capital Property Trust REIT1025.20%6.55%1.90%3.50%3.80%26%
First National Financial Corp100.20%5.65%14.80%6.80%6.60%64%
InterRent REIT1026.40%1.98%5.00%6.30%7.10%15%
CT REIT910.50%4.85%3.80%4.10%3.90%169%
Parkland Corporation9-13.90%3.55%1.70%1.70%1.80%135%
Savaria Corporation932.50%2.61%4.40%9.10%17.80%105%
Global Water Resources Inc.813.80%1.72%1.00%1.00%2.50%225%
Badger Infrastructure Solutions Ltd6-16.40%1.98%5.00%6.40%10.10%n/a
Killam Apartment REIT537.90%2.97%1.70%2.60%2.80%29%
Summit Industrial Income REIT572.20%2.40%3.00%2.50%2.00%9%

As with any other screen, the above list is simply a starting point for further research. Clearly, a deeper dive is required based on the average EPS payout ratio over 70%. That said, the above list had an average return of 20% in 2021, including a 3.4% dividend payout and appears to be growing distributions by about 5% yearly, all very impressive figures.

As always, if you know of any other Canadian monthly dividend payers with a history of boosting their payouts, please reach out to me so that I can correct the above list. 

Monday, January 3, 2022

Portfolio Results for 2021 & Goals for 2022

My portfolio suffered through the storm during early stages of the pandemic, as evidenced by my results from 2020  when my forward dividend income increased by $1,675, and my dollar-weighted average organic dividend growth was only 0.85%. Based on those relatively weak results compared to my historic standards, I set a modest goal to increase my forward dividend income by $3,000 in 2021, while targeting a dollar-weighted average organic dividend growth rate of 5%. As the worse of the storm passed, and the rainbow emerged, I ended up raising my forward dividend income by over $4,300 in 2021, and realizing a dollar-weighted average organic dividend growth rate of 9.23%

How did I manage to put up such lofty results? First, I'll be honest and say a lot of it was luck. One of my largest holdings, A&W Revenue Royalty Income Fund raised their payout from 10 cents per month to 15.5 cents per month during 2021, which definitely helped both my dividend growth rate and forward dividend income. When OSFI finally allowed the Canadian banks to raise their dividends and buy-back stock after their year end results, all five of my bank holdings boosted their payouts between 10.3% and 25.5%. Lastly, if you have followed my transaction journal, you likely noticed that my strategy of buying stock monthly, and adding to my winners, has helped grow both the forward dividend income and average dividend growth rate of my portfolio. 

Based on my results from 2021, and knowing I have more cash in my RRSP than I'd like right now (I received the proceeds from American Tower's purchase of Coresite's shares on December 31st), I'm aiming for a pretty lofty $4,600 increase in forward dividend income in 2022, while keeping my targeted dollar-weighted organic dividend growth rate at 5.0%. It's probably a good time to mention than I continue to count all US-dollar dividends I receive at a 1-to-1 exchange rate as if they were Canadian-dollar dividends. This impacts 15 of my 36 investment holdings. 

I made the most of my down time over the holidays and calculated some portfolio metrics for 2021 that I thought I'd share with you below.

- My internal rate of return on my portfolio in 2021 was 26.5%. Although this sounds awesome, it's a mere 4.5% higher than the 22.0% benchmark return, I get from calculating 66% of the Canadian dividend aristrocat ETF 'CDZ' and 34% of the US S&P dividend ETF SPY (the actual weights of Canadian and U.S. holdings in my portfolio). 
- The value of my portfolio rose by 33.3% in 2021, far better than the 6.7% in 2020. National Storage Affiliates and Microsoft were two of my best performers.
- The dividend yield of my portfolio was 3.4% in 2021, down from 3.9% in 2020, 3.9% in 2019, 4.2% in 2018 and 4.0% in 2017. The increase in the value of my holdings and larger amount of cash than usual at year end both drove the portfolio yield downward.
- Cash represented 4.4%, of my portfolio at year 2021, up from 4.2% at year end 2020, much higher than the 1.6% at year end 2019, and 2.7% at year end 2018. Receiving the value of my Coresite holding in cash on the last day of the year was a big driver of the relatively large amount of cash.
- My holdings raised their dividends 48 times during 2021, with Realty Income doing so 5 times, and A&W Revenue Royalties providing the largest percentage increase (55.5%).
- I conducted 23 trades in 2021, including 4 sells. This is down from 32 trades in 2020, and close to the 24 conducted in 2019. Going forward, I think averaging about two trades a month seems appropriate. 
- I ended the year with 36 positions, down from 37 in 2020, and down from an all-time high of 40 positions at year end 2019. I'd like to see this number keep declining each year.

I'll remember 2021 as a stellar year in terms of my investment results, even if it was a challenge on many other fronts. I wish all of you the best of luck in 2022 and hope everyone gets their rainbow and associated pot of gold this year!