Dividend Income Update - May 2022
In May, I presented at the virtual Women Can Money Financial Summit. Thanks go out to Maria, the blogger extraordinaire over at Handful of Thoughts, who organized this incredible event. I can’t imagine all the time it took her to plan while being a mother, a full-time teacher, an owner of 9 rental properties (wow!), and a blogger. She is my superhero!
The summit was a wonderful opportunity for women to learn more about personal finance topics ranging from effectively communicating with your partner about money to setting up a budget and investing those hard-earned dollars. In total there were 16 presenters and my interview focused on dividend stocks and creating a passive income stream for retirement.
Close to a thousand Canadian women attended the summit, which is amazing considering it was the first year offered. If you attended, I hope the presentations inspired you to take finance into your own hands and make your money work for you.
Portfolio Update
You may remember in April, our portfolio was up over 6 figures since January 1st. We were very pleased but the markets can often make it feel like we are riding a roller coaster and May did not disappoint in that regard. We were up, then down, then down some more, then up, then down.... and although our 6-figure gain was short-lived, our portfolio managed to rebound on May 30th only to drop again just in time for this update as of May 31st.
As it stands now, our portfolio is up over $72,000. This number takes into account:
The difference will be price appreciation (thanks to the oil and gas sector).
You will notice that we made a deposit this month of $5,700 - our first deposit over and above our TFSA contributions that were made back in January. Then, at the end of the month, we had to make a withdrawal that wasn't planned. Selling shares and removing funds from the investment account does stall the building of our income, but sometimes a withdrawal is unavoidable. Thankfully we have a portfolio of dividend-paying stocks that can come to the rescue when needed.
In a round-about way, this withdrawal was made for graduation gifts. One needed a new car after being rear-ended by a distracted driver on the phone, and the other had a large student loan that was due. Money seemed like the most appropriate gift in light of these circumstances. Therefore, some shares needed to be sold.
Rather than jumping right into my dividend income this month, I will start with the portfolio changes that were made.
Portfolio Changes This Month
I bought Gear Energy (GXE.TO)
I don’t normally record or provide updates on non-dividend paying stocks, but I've owned Gear Energy since last year. They recently introduced a new quarterly dividend that began this month and I added more shares to my existing holding. My yield on cost is 3.20%.
I bought Manulife (MFC.TO)
I took advantage of the down market to purchase some more MFC shares. I decided to sell some of my CVE shares, up over 100%, to fund part of this purchase. Why the switch? MFC provides a better dividend than CVE, in fact, 3% better based on my cost. Eventually, this stock will start to move in a positive way as it is highly undervalued and it pays a stellar dividend.
I sold Cenovus (CVE.TO)
I was hesitant to sell an oil and gas company but I do still own shares in CVE and will therefore be able to take advantage of any price appreciation on this stock moving forward. My purchase was up over 100%, and I decided to solidify some of the growth and use the funds to increase my dividend income by purchasing MFC. I have no doubt that CVE will increase their dividend further, but will they increase it to 6% like MFC? Time will tell.
I sold some...
Exxon shares (XOM) at an 80% gain
AT&T shares (T) at a 25% loss
2 non-paying growth stocks at a loss
ENB shares (ENB.TO) at a 40% gain
SU shares (SU.TO) at a 70% gain
These are the shares that were sold to fund our withdrawal. All transactions were completed in our taxable account, and because of that, the losses can be used to offset some of the capital gains. In hindsight, we would have held off depositing funds to purchase Gear Energy and Manulife at the beginning of the month had we known we would need this money at the end of the month.
The reason I chose to sell companies from the energy sector was…