Saturday, 15 December 2012

2012 Dividend Tally


My last dividend for the year came in on Friday; $53.55 from Saputo, who incidentally is acquiring Morningstar Foods for a whooping $1.45 billion. The news was better received than that of Walgreens aquiring Boots Alliance. My total for the year stands at $2,762.21.

Ever since I began buying stocks in 2008, I have loved keeping track of every single dividend received. I devised a fancy (to others, that would mean simple) spreadsheet into which I input the data. It easily helps me see dividend increases as well as various dividend totals (i.e. for each stock, for each year, total received).

I’m quite pleased at the way this is going.

2008 - $146.26
2009 - $1,377.91 (+842%)
2010 - $1,654.75 (+20%)
2011 - $1,838.32 (+11%)
2012 - $2,803.69 (+53%)
2013 - $3,632.95 (expected) (+30%)

The rate of dividend growth is obviously due to new capital being invested, as well as some pretty decent dividend growth.

I currently have $13,950 sitting on the sideline. If invested at a dividend yield of 3.5%, that would boost my 2013 expected dividends by $488, bringing the total to $4,120 per year.

I also expect to invest about $20,000 of new capital during 2013. At a dividend rate of 3.5%, that would equate to $700 per year in additional dividends.

My plan is to retire in 22 years. Come 2034, I’d like to supplement my defined benefit pension with about $80,000 in annual dividends. This should be plenty to guarantee an abundant supply of Amarones and Brunellos - oh yeah, and a happy wife!


8 comments:

  1. Congrats on a great year of dividends. A 50% boost from last year is awesome. Keep up the good work!

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    1. Thanks for the encouragement. Now if only I could add naked puts to the mix. I've been at it with my brokerage firm for weeks now. I had to send them a letter last week explaining I know what I'm getting into.

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  2. That's some awesome growth there. Like you my growth is mainly from new capital but the dividend increases help. A 50% increase is awesome and having that much cash ready to invest will go a long way towards helping you reach your $80k goal. I've been going back and forth about when I would like to call it quits once I reach FI. That margin of safety is what I keep trying to figure out. Congrats and keep up the good work!

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    1. Thanks for the encouragement. It took a while to establish my goal. In the end, it came down to the fact that my wife and I love spending money. I figured that our retirement income should be the same, or possibly more, than our family income. Adding $80k in dividends to my and my wife's pension income should give us just that. Noteworthy is roughly $50k of the $80k in dividends will be generated in Tax Free Saving Accounts (TFSA); We will pay no income tax on the $50k. That's probably the equivalent of a $75,000 salary.

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    2. ADY - You mention TFSAccounts (i.e. plural). I take it the above projection includes your wife's TFSA? Just curious, what assumptions are you using to arrive at the $50k in dividends in terms of annual ROR, amount invested per year and # of years (I assume about 25 based on your goal of retiring in 22 years).

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    3. DoD, my wife and I each have an RSP account and a TFSA. The 80k in dividends will be generated through all 4 accounts. I have devised an excel table for each one of my stocks identical to the one published in my blog for NSC (see "Future Dividend Income - Norfolk Southern" published in November). It really comes down to Initial Yield + Dividend Growth = Long-term CAGR. This formula only works if dividends are re-invested. The impossible part is estimating dividend growth for the next 22 years. To arrive at 80k in dividends, I will have to purchase at least $10k in dividend growth stocks per year for the next 21 years.

      Here is an example for Kraft which estimates a 5% dividend increase over the next 22 years.

      KRFT:US Long term annual return 4.39% + 5% = 9.39%

      #Stocks Div. % on initial Total Div. Share value Total value
      100 $0.00 0.00% $0.00 $45.60 $4,559.95
      100 $2.00 4.39% $200.00 $47.88 $4,787.95
      104 $2.10 4.61% $218.35 $50.27 $5,227.34
      108 $2.21 4.84% $238.39 $52.79 $5,707.07
      112 $2.32 5.08% $260.27 $55.43 $6,230.81
      117 $2.43 5.33% $284.16 $58.20 $6,802.62
      122 $2.55 5.60% $310.23 $61.11 $7,426.91
      126 $2.68 5.88% $338.70 $64.16 $8,108.49
      131 $2.81 6.17% $369.79 $67.37 $8,852.62
      137 $2.95 6.48% $403.72 $70.74 $9,665.04
      142 $3.10 6.80% $440.77 $74.28 $10,552.01
      148 $3.26 7.14% $481.22 $77.99 $11,520.39
      154 $3.42 7.50% $525.39 $81.89 $12,577.63
      160 $3.59 7.88% $573.60 $85.98 $13,731.90
      166 $3.77 8.27% $626.24 $90.28 $14,992.10
      173 $3.96 8.68% $683.71 $94.80 $16,367.95
      180 $4.16 9.12% $746.46 $99.54 $17,870.06
      187 $4.37 9.57% $814.96 $104.51 $19,510.02
      194 $4.58 10.05% $889.75 $109.74 $21,300.49
      202 $4.81 10.56% $971.41 $115.23 $23,255.27
      210 $5.05 11.08% $1,060 $120.99 $25,389.44
      218 $5.31 11.64% $1,157 $127.04 $27,719.47
      227 $5.57 12.22% $1,264 $133.39 $30,263.32
      236 $5.85 12.83% $1,380 $140.06 $33,040.64

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    4. That table didn't turn out too good. I'll post it in 3 or 4 days.

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    5. Table is fine for me - no need to reproduce. This is exactly what I was asking about. I use a projection as well, but based simply on a range of overall estimated ROR's. Will need to take a closer look at your method once I get more time. Thanks again for the detailed response!

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