November Dividend Report

November came in mostly as expected. I bought extra shares of CAT to build up that position per my plans. TAL disappointed by cutting div by 37.5%, and is now on my watch-to-sell list. My other finances had a major event as I got a loan to finance a new car. This in turn will drive dividend strategy for the next 3 years.

• I received $ 658.49, which is what I expected last month. Note that RY fluctuates based on USD and CAD exchange rate.
• This was my highest dividend income in one month ever. The Feb/May/Aug/Nov cycle pays the most, so they will probably keep hitting 'highest month' records.
• Trailing 12 months $ 4,471.34
• Forward 12 months $ 4,863.03

In December I expect $ 317.97. I plan to invest my dividend income from November and December, as well as the money I didn't have to put into my new car right away, since I was able to get a low interest loan.

Dividend Stocks or Nice Car ?

My 15 year old car finally died. It's been a long time coming. I've been saving up in a car fund, and now I have to decide what to do.  A frugal investor might buy a used car, several years old, low mileage, and drive it until it's dead. If you can get low interest financing on it, even better. Financially that would be the smartest thing to do.  As I've said before, my goal is more complex that just let my passive income pay for my expenses and to get there faster I give up things. Instead I want to enjoy life, and enjoy things in life. This includes traveling with my family, living in a nice house, and driving a nice car. I fully understand this costs money, and adds extra years before I'm financially independent. Here's what I'm thinking.

Merger: Dividend Portfolio Impact

One of my holdings, TAL, announced a merger with fellow container company Triton. What does this mean for my dividend portfolio ? After TAL cut their dividend by almost 40%, from .72 to .45 per share, TAL has been on my Watch to Sell list. However, with the newly announced merger, it may be worthwhile to hold on just a little longer.

With any investment, there are always three options: do nothing, shrink (or close) the position, or add to the position. I'm not adding, which leaves doing nothing and closing. I have 150 shares, which earned me about 1500 in dividend payments since I bought them. However, the share price declined sharply, leaving me with a net loss of about $700. TAL pays me $270 per year at the newly lowered dividend. Let's look at my options.

Buy: CAT

I averaged down on CAT, picking up 21 shares for $71.60.  This puts my total projected dividend income for the next 12 months at $4,863. CAT is under pressure, but solid long term. If / when economic conditions in China and other regions improve, CAT stands to benefit. They've raised dividends consistently, meaning management knows how to handle the cyclical nature of construction booms and busts.

CAT scored 18 on my stock screener, out of a possible 20. JNJ also scored 18, and together they tied for the top spot of my current holdings. A few other stocks scored higher, but I want to build on my positions before going into other stocks.

This purchase was funded by dividend income from October, and fresh capital from October and November.

October Dividend Report

This October I did not buy any stocks. I've been going back and forth between JNJ and CAT, or adding a new position in EMR. I think EMR is out for now given their low (1%) increase this past year. I will probably add to CAT next week. CAT is under pressure, but I think it's priced into the stock and long term they are solid.