July 2023 Dividend Income Update
Another month, another dividend income update. I haven’t been as productive as I thought I would be this summer. There are a few home projects that I want to complete before the end of the summer, but due to the rain and busy weekend schedule, that has been put on hold. The other thing that has been placed on hold is the purchase of stocks. Short-term bond and interest rates are currently high in the 5% range, so I’ve been keeping much of my cash out of the market. But as I mentioned in last month’s dividend income update, the S&P 500 is heavily influenced by a few tech stocks. Looking at the S&P 500 equal weight index, it’s up 7% year-to-date. That’s not bad, but a paltry number compared to the S&P 500’s 17% return year-to-date. Inflation seems to be cooling, getting closer to the Bank of Canada’s target. However, if I look at the price of oil in the GTA, it went down into the $1.30/liter range but is now closer to $1.60/liter. The price of oil didn’t go above $1.30/liter pre-pandemic. The price of food has remained stubbornly high while food companies are reducing the size of packaging, also known as shrinkflation. I simply end up buying less at the grocery store to keep costs relatively flat. In my opinion, I get the feeling that we will end up with a soft landing versus the recession that everyone thought was coming. However, I think inflation will continue to remain high for some time.
In July, I received a total of $2,814 in dividends and interest. I earned a cumulative passive income of $24,447 this year. For comparison, I earned a cumulative passive income of $17,048 this time last year. At the end of 2022, I earned $31,566 in passive income. Of the dividends received this month, $2,419 was earned in my taxable account.
As a reminder, I convert any USD amount to CAD using the month-end exchange rate published by the Bank of Canada. For July 2023, I used an exchange rate of 1.3177.
| Account | Income |
|---|---|
| Cash | $915 |
| Margin | $1,504 |
| Retirement | $395 |
| Total | $2,814 |
I received dividends from the following stocks and ETFs in July:
- Alimentation Couche-Tard Inc (ATD.TO)
- BCE Inc (BCE.TO)
- Broadridge Financial Solutions Inc (BR)
- CT Real Estate Investment Trust (CRT.UN.TO)
- Global X High Interest Savings ETF (CASH.TO)
- Granite Real Estate Investment Trust (GRT.UN.TO)
- Medtronic PLC (MDT)
- Nutrien Ltd (NTR.TO)
- TC Energy Corp (TRP.TO)
- Telus Corp (T.TO)
- Toronto-Dominion Bank (TD)
- Vanguard Short-Term Bond Index ETF (BSV)
- WisdomTree Floating Rate Treasury Fund (USFR)
I sold shares of the following stocks and ETFs in July:
- Enbridge Inc (ENB.TO)
- TC Energy Corp (TRP.TO)
- Toronto-Dominion Bank (TD)
Enbridge was one of my first Canadian stock purchases. I’m an Enbridge customer and I liked the idea that their quarterly dividend could cover about a month’s worth of gas bills. TC Energy is another oil and gas company that I owned that just hasn’t done well. Oil and gas are cyclical and typically use leverage to grow by acquisition. With today’s high-interest rates, I don’t see these companies growing much. I already own utility companies Fortis and Emera that I like much more.
I purchased shares Toronto Dominion Bank to exchange CAD for USD via Norbert’s Gambit. The timing was really bad because I purchased and journaled the shares right before the Silicon Valley Bank fiasco. I’ve been holding onto the shares because I was fairly certain that the share price would recover and I could receive dividend payments while I wait. In the meantime, I missed out on the run-up if I had purchased shares of US ETFs. This is why it’s called a gambit.
I didn’t purchase any shares of stocks or ETFs in July. I am interested in a few financial services companies and I know that I own many stocks in the financial services sector, but I think I’m going to bite the bullet.
How did your month go? Did you buy or sell any stocks or ETFs?