In September 2017, I received slightly over $100K as a result of the commuted value of my pension plan. I decided to invest 100% of this money into dividend growth stocks. Each month, I publish my results. I don’t do this to brag, I do this to show you it’s possible to build a portfolio during an all-time high market. The market will crash… eventually. In the meantime, I rather cash some juicy dividends!
***UPDATE*** In September 2018, I hosted a live webinar on how I used my investing methodology to build this portfolio. I’m going back to my screening methods and how I invested the full amount in the market to get the result I’m presenting today.
Click here to view the webinar replay (it’s free)
Portfolio holdings
The past couple of weeks have been, let’s say, interesting weren’t they? The market got hit to right, left and center and investors started panicking. Now there’s this debate about whether or not we are in the middle of a market correction or not. What did I do? To be honest, nothing. I didn’t even look at my portfolio. I already knew numbers would have been bad, haha! But I was a lot more interested in reading quarterly earnings of many of my holdings.
Let’s take a look at the latest numbers…
Numbers are as at November 2nd 2018:
Canadian portfolio (CAD)
| Company Name | Ticker | Market Value |
| Alimentation Couche-Tard | ATD.B.TO | $5,470.46
|
| Andrew Peller | ADW.A.TO | $6,204.5 |
| National Bank | NA.TO | $4,787.20 |
| Royal Bank | RY.TO | $5,734.20 |
| CAE | CAE.TO | $4,710.00 |
| Enbridge | ENB.TO | $6,568.79 |
| Fortis | FTS.TO | $4,247.09 |
| Intertape Polymer | ITP.TO | $5,286.00 |
| Lassonde Industries | LAS.A.TO | $4,928.70 |
| Magna International | MG.TO | $4,600.39 |
| Cash | $802.42 | |
| Total | $53,339.50 |
My account shows a negative variation of $2,874.86 (-5%) since the last income report.
The iShares S&P/TSX 60 ETF (XIU.TO) is down -5.79% for the past 30 days. I’d guess I can call that a victory that I’m *only* down by 5%! More seriously, my total portfolio is worth $128.5K this morning (November 2nd), up almost 20K from when invested this money a year ago. Do I really care about this small market drop?
Not much happened in terms of news for this part of the portfolio during October. The real data will come in November. In fact, by the time you are reading this report, Enbridge and Fortis already published their results. More on that next month!
Numbers are as at October 3rd 2018:
U.S. portfolio (USD)
| Company Name | Ticker | Market Value |
| Apple | AAPL | $6,394.06 |
| Disney | DIS | $5,178.60 |
| Garrett Motion | GTX | $44.40 |
| Gentex | GNTX | $5,005.50 |
| Hasbro | HAS | $4,486.38 |
| Honeywell | HON | $4,624.00 |
| Lazard | LAZ | $4,190.16 |
| Microsoft | MSFT | $6,300.90 |
| Resideo Tech | REZI | $115.55 |
| Starbucks | SBUX | $5,432.35 |
| Texas Instruments | TXN | $4,272.50 |
| United Parcel Services | UPS | $3,910.30 |
| Visa | V | $6,919.00 |
| Cash | $694.03 | |
| Total | $57,367.35 |
The US account shows a negative variation of $4,516.78USD (-7.3%) since the last income report.
While my Canadian portfolio did a little better than the market, it’s the opposite for my US one as the S&P 500 total return shows a negative return of -6.93% at the time of writing this report. Overall, I’m pretty much following the market.
You will notice two small additions to this portfolio. This is what happens when a great company (Honeywell) decides to spin-off some divisions. I’m now a shareholder of Garrett Motion and Resideo Tech. With such small value, I’ll just keep them as selling those shares would cost too much in transaction fee!
HON posted a good quarter showing 7% organic growth. Sales by segment: Aerospace +10%; Home and Building Technologies +2%; Performance Materials and Technologies +3%; Safety and Productivity Solutions +11%. After spinning-off Garrett Motion (GTX), Hon is about to spin-off another division with Resideo Technologies (REZI). Resideo will be a leading global provider of critical, residential comfort and security solutions, and a leading global wholesale distributor of security and low voltage products. Management will keep a focus on their core businesses while unlocking values for shareholders.
Both Apple and Texas Instruments got severally hit due to weaker guidance. Their current numbers are great, but both managements announced growth will be a little more difficult going forward. I’ve been giving some thoughts on selling a few shares of AAPL lately. Not because of their recent earnings, but my total shares of AAPL across all my portfolios (I have a RRSP and a RESP including Apple too!) now represent 12% of my total investment value. I find it a bit high, but the company is incredibly solid. For that reason, I’ll stick with my position for now.
While GNTX missed revenue estimates, the company still shows a strong business model. GNTX shipped 6% more mirrors than last year and management just finished paying their long-term debt. The company shows a stellar balance sheet in a moment where everybody is concerned about interest rates rising. The company is not likely to surge in the upcoming months as it will have to deal with a shaky automobile industry. However, GNTX is strong enough to go through this challenging period with a smile. This company is clearly among my favorite consumer cyclical dividend stocks.
Dividend income: $109.06 CAD (up from $28.44)
Ah! This was the moment I was waiting for: my first comparable month! To be honest, this is still cheating as I had only 76K of my total 108K invested back then. Therefore, I didn’t have all my money working for me back then. Still, it’s great to see that the red bar is a lot higher than the blue one!
Let’s take a look at which companies paid me this month:
Canadian Holdings payouts: $70.89 CAD
- Andrew Peller: $21.29
- National Bank: $49.60
U.S. Holding payouts: $29.14 USD
- Gentex: $25.85
- Garret Motion: $3.29
Total payouts: $109.06CAD
*I used a USD/CAD conversion rate of 1.31
Since I started this portfolio in September 2017, I have received a total of $2,615.95 in dividend. Keep in mind that this is a “pure dividend growth portfolio” as no capital can be added in this account (it’s a LIRA). Therefore, all dividend growth is coming from stocks and not from additional capital.
Final thoughts
I’m already starting to build some cash in both my CDN and US account. I think I’m going to add some shares of Fortis (FTS). The company’s valuation is attractive, and its yield is now over 4%. It wouldn’t hurt my portfolio to invest a grand or two in this one, right?
DGB –
Nice work and great growth from period compared. It’s okay, obviously, with the market value decline. Keep building up capital to deploy it out there on undervalued companies. You got this.
-Lanny
I don’t feel too bad since I’m still +20% (or so) after the “market correction” hahaha!