In September of 2017, I received slightly over $100K from my former employer which represented 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 is possible to build a lasting portfolio during an all-time highly valued market. The market will inevitably go down… as it has lately. But I continue to enjoy cashing consistent and growing dividends despite that negative market action!
Added 171 shares of Andrew Peller @ $8.73
On July 6th, I used dividends paid to both accounts (US and CAD) and added 171 shares of Andrew Peller (ADW.A.TO) at a cost of $8.73/share. While the stock doesn’t get much love from the market in 2020 (it’s down about 23% ytd), I like having market leaders with solid dividends in my portfolio. This is exactly what the Canadian king of wine offers me. This transaction is in line with my portfolio rebalancing strategy where I use dividends paid to invest in smaller positions.
On August 5th, Andrew Peller posted solid results and the shares jumped by about 8% on earnings day. The company posted 3.4% revenue growth, mostly due to the increase in sales to provincial liquor stores, other retail channels and the Company’s new e-commerce platform, thewineshops.com. Andrew Peller successfully pulled out revenue growth even as they reduced advertising and promotional spending. Therefore, while sales were up 3.4%, earnings per share were up 30%. ADW continued to pay down debt (from $165.2M last quarter to $159.5M) on top of enjoying lower interest rates. The dividend remains the same and will reach a 4th consecutive quarter with the same distribution level (since September 2019).
To make this a “perfect” investment, we would need stronger earnings and, obviously, a dividend increase by the end of the year.
Here’s my CDN portfolio now. Numbers are as of August 5th, 2020 (before the bell):
Canadian Portfolio (CAD)
| Company Name | Ticker | Market Value |
| Alimentation Couche-Tard | ATD.B.TO | 7,951.56 |
| Andrew Peller | ADW.A.TO | 4,998.58 |
| National Bank | NA.TO | 5,106.40 |
| Royal Bank | RY.TO | 5,549.40 |
| CAE | CAE.TO | 3,842.00 |
| Enbridge | ENB.TO | 7,075.95 |
| Fortis | FTS.TO | 5,407.38 |
| Intertape Polymer | ITP.TO | 4,605.00 |
| Magna International | MG.TO | 4,429.60 |
| Sylogist | SYZ.V | 4,858.05 |
| Cash | 91.48 | |
| Total | $53,915.40 |
My account shows a variation of $3,161.83 (+6.2%) since the last income report on August 5th.
My Canadian portion of my portfolio did well between July 1st and August 5th (my last dividend income report). That’s pretty good considering I have no Shopify (SHOP.TO) or gold stocks in my portfolio! The big winner during this period was Intertape Polymer (ITP.TO) (which was on the Dividend Stocks Rock buy list in June). The company provided a business update on July 13th and confirmed higher revenue for this quarter. Back in May, the company issued guidance for revenue between $235M and $250M. Management now estimates revenue to be ~$267M for the quarter. That was enough to lift the stock by more than 30%.
Here’s my US portfolio now. Numbers are as of August 5th, 2020 (before the bell):
U.S. Portfolio (USD)
| Company Name | Ticker | Market Value |
| Apple | AAPL | 10,527.84 |
| BlackRock | BLK | 7,994.56 |
| Disney | DIS | 5,278.05 |
| Gentex | GNTX | 6,316.80 |
| Hasbro | HAS | 3,443.56 |
| Lazard | LAZ | 3,111.00 |
| Microsoft | MSFT | 12,797.40 |
| Starbucks | SBUX | 6,386.05 |
| Texas Instruments | TXN | 6,611.50 |
| United Parcel Services | UPS | 5,354.64 |
| VF Corporation | VFC | 3,568.80 |
| Visa | V | 9,614.50 |
| Cash | 28.20 | |
| Total | $81,032.90 |
The US total value account shows a variation of +$4,706.06 (+6.2%) since the last income report August 5th.
During the month of July, I’ve had many companies outperforming the market with double-digit growth. Here’s a quick recap of what happened.
UPS (UPS) +27%: UPS posted a strong quarter and beat both EPS and revenue growth expectations. The company benefited from the surge in ecommerce due to the pandemic. U.S. average daily volume increased 22.8%, reaching 21.1 million packages per day. Demand for residential delivery surged in the quarter, driving B2C shipment growth up 65.2%. Operating margin was 9.0%; adjusted operating margin was 9.3%. Average daily volume grew 9.8%, driven by strong outbound demand from Asia and an increase in cross-border e-commerce in Europe. Operating margin was 20.8% while the adjusted operating margin was 22.7%.
Apple (AAPL) +21%: AAPL posted a strong quarter announcing double-digit growth and a 4-1 stock split. Q3 revenue breakdown: iPhone, $26.4B (consensus: $22.20B); iPad, $6.6B (consensus: $4.8B); Mac, $7.1B (consensus: $6.03B); Wearables, Home and Accessories, $6.5B (consensus: $5.99B); Services, $13.2B (consensus: $13.13B). The iPhone giant is also lifted by the coming replacement of many phones to get “5G ready”. Many iPhones owners are expected to get rid of their old model to surf on 5G. This should support demand for the iconic phone brand for several quarters in the coming years.
Disney (DIS) +13%: Investors’ reaction to Disney’s latest quarter was hectic to say the least. At first, shares tumbled telling the market Disney disappointed with their important loss and major revenue drop. Even the Disney+ subscribers weren’t enough to cheer the street. The next morning, DIS soared as investors realized what the future holds. First, Disney now shows about 50% of Netflix total paying subscribers (including Hulu, Disney+ and ESPN+). Then, DIS confirmed it will be offering its new princess movie, Mulan, to premium video on demand through Disney+. This is a direct hit to movie theaters while it creates a unique opportunity for Disney’s streaming service. Parks have reopened in Florida too, let’s hope the experience is positive.
Lazard (LAZ) +11%: LAZ did better than expected, but revenue still dropped by 13%. While there is a clear demand for restructuring (and this trend will continue forward), the investment firm makes less money off those deals than when it does mergers & acquisitions. Nonetheless, Lazard’s business model is built to go through such hectic periods. It proved it could do it back in 2008-2010 and management is proving it once again this year. Assets under management of $215B at June 30, 2020, rose 11% from March 31, 2020, driven by market appreciation of $25B and forex appreciation of $2.4B, partly offset by $6B in net outflows.
My entire portfolio updated for 2nd Quarter!
Each quarter, we run an exclusive report for Dividend Stocks Rock (DSR) members who subscribe to our very special additional service called DSR PRO. The PRO report includes a summary of each company’s earnings report for the period. We have been doing this for an entire year now and I wanted to share my own DSR PRO report for this portfolio. You can download the full PDF giving all the information about all my holdings. Results have been updated as of April 2020. The Q2 report will be available during my July update.
Download my portfolio Q2 2020 report.
Dividend Income: $71.69 CAD (-35.5% vs July 2019)
Last year, I’ve received a total of $111.15 CAD in dividend. This included a distribution coming from Disney ($39.60 USD). You can see how the dividend suspension had an impact on my portfolio for the month of July! It’s the first time this year where the total dividends received for the month is lower than the previous year. When I look at the first 7 months of the year, I’m showing a total increase of 9.6% (from $1,927.74 to $2,113.57). Once again, there is no reason to panic. I continue to believe in Disney and CAE (the other company that has suspended its payments in 2020). Patience will pay off.
Dividend growth (over the past 12 months):
- Alimentation Couche-Tard: paid in August 2019. (+12%).
- Andrew Peller: 0%
- Gentex: +4%
- Disney: -100%
- Currency fluctuation: -1%
Canadian Holdings payouts: $34.37 CAD
- Alimentation Couche-Tard: $12.04
- Andrew Peller: $22.33
U.S. Holding payouts: $28.20 USD
- Gentex: $28.20
Total payouts: $71.69 CAD
*I used a USD/CAD conversion rate of 1.3235
Since I started this portfolio in September 2017, I have received a total of $9,102.89 CAD in dividends. Keep in mind that this is a “pure dividend growth portfolio” as no capital can be added into this account besides its dividends. Therefore, all dividend growth is coming from the stocks and not from any additional capital.
Final Thoughts
This monthly update marks the moment where my pension plan portfolio has completed its full “V” recovery. This means my portfolio is at the same level as it was back in January 2020. Unfortunately, I was on a roll for the first two months (+5% for Jan and Feb) of the year and I haven’t recovered to this level yet. My total portfolios are showing better results, but that is mostly due to Amazon (AMZN) performance in my RRSP account which is not tracked monthly!
For my pension portfolio, I don’t intend to reduce my exposure to the tech sector for now. This is my protection in the case of another partial lockdown due to the COVID-19. However, I am considering selling UPS and redistributing this money into CAE and National Bank (NA.TO). I expect Canadian bank results to be stronger than anticipated.
Cheers,
Mike
Huh, I didn’t realize there were public wine companies to invest in. I suppose that makes sense. I’m also a wine investor, though in a different way. I buy wine, stick it in my wine rack, and drink it :).
Thank you for this fun article and quick look at your growing dividend portfolio!
TDGB –
I am closely monitoring Disney, to see if it’s 3rd quarter 2021 where the dividend gets reinstated for the 2nd half (i.e. where they have 12 more months to figure this out). It’s funny where the price is at, with no dividend, you know?
I love the wine purchase, I could use a glass right now haha.
-Lanny
I’m not surprised about $DIS price as its new business is growing. They found a good way to diversify their business while waiting for the pandemic to go away 🙂