Saturday, September 18, 2021

Dividend Income From Some Canadian Bloggers - August 2021

 In August 15, Justin Trudeau met with the governor general, Mary Simon, and asked her to dissolve parliament.  The outcome of this meeting meant a federal election will be called.  Prime Minister Trudeau announced the election will be held on Sept 20.  The length of the election campaign is 36 days, which is the minimum amount of days from calling an election and election day.

On September 20, voters can get an idea who will form government.  Normally, on the day of election, the citizens of Canada will know for certainty who is the next prime minister.  Due to the COVID19 pandemic, their was an increase in mail in ballots.  The mail-in ballots will not start to be counted until September 21, which is the day after the election.

Canada is now officially in a 4th wave of COVID19.  The number of cases has increase dramatically after the loosening of restrictions.

The outcome of the election and the 4th wave of COVID19, will definitely affect the markets.   

Let's get to the list of dividend income from some Canadian bloggers for August 2021. Of course, I first want to mention my own dividend income report.

My Dividend Snowball received $2249.27 in total passive income in August.  The amount of dividend income received was $1675.49.   

Passive Canadian Income received $1176.38 in total passive income in August 2021.  The amount of dividend income received was $322.99  and dripped 5 new shares.  

Reverse The Crush received $51.92 in dividend income.  This is a 42% YoY increase.  

Our Life Financial received $1206.94 in dividend income and 18 new shares via DRIP.  Also in the post, Our Life Financial mentions her new purchases during the month of August.      

Moneymaaster received $500.41 in dividend income and dripped 24 new shares/units to boost his future dividend income. 

Tawcan received $1776.26 in dividend income from 18 positions.  Tawcan also dripped 13 new shares. 

My Own Advisor shared his dividend income update with the world.  Although the actual amount of dividend income received in August is not mentioned, there is some great information in the post.    

Conclusion:


We all started with $0.00 of passive income and have grown our investments over time. Each "BUY" transaction can provide ongoing dividend income which may also be increased over time.

In Canada and the United States, many brokerage accounts offer commission free trades and/or commission free ETFs. You can get started on your investing journey with very little money.

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their
 financial situation and tolerance for risk.

Saturday, September 11, 2021

Recent Option Trade

As the stock market keeps booming along, investors can sometimes feel disappointed when looking for a yield that they feel comfortable to invest.  When the price of the stock goes up, this results in a yield going lower these two things are inversely correlated.

This past summer we have some the hottest temperatures on average since records were kept.  Western Canada has experienced a heat dome, which is the first time I seen this weather event happen in Canada.  A heat dome is a prolonged heat wave in which the temperatures at night remain very hot instead of going lower to a reasonable comfortable temperature.

The International Panel on Climate Change (IPCC) have come out with a report this past summer that climate change has been mostly caused by human activity.  In fact, the IPCC said this is "Code Red" for humanity.

We have seen more and more drastic weather events all around the world.

Can an investor take advantage of this major problem of climate change?

Recent Trade

On September 10, I sold 1  Oct15 2021 $28 NFI.TO put option at $0.35.  The net premium collected after commissions is $24.05.  The days to expiration (at time of trade) is 35.

I make money whether the stock goes up, down or sideways.

Scenario 1 :  Option Not Assigned

The return for 35 days if the stock remains above $28.00 is 0.859% (24.05/2800*100).  A 0.859% for just 35 days.  The annualized return (0.859/35*365) is 8.96%.  This annualized return (or yield) is significantly higher than the 1.25% interest for my current high interest savings account.


Actually, my return is actually higher.  My brokerage, Questrade, has a 30% margin requirement for New Flyer Group stock.  Therefore my return is actually 2.86% (24.05/(2800*.30)) for 35 days, or 29.9% annualized.  

Scenario 2 :  Option Assigned

If the price of the stock falls below $28.00 before or at expiration, I am obligated to be "put" 100 shares.  In fact, the option will be assigned at expiration if the stock is trading at any price below the strike price .  My brokerage as an option assignment/exercise fee of $24.95.

If the option is assigned my adjusted cost basis is as follows:
                
               Purchase price = Strike price*100 shares*# of contracts - net                                          premium received + option assignement fee
                                      = $2800-$24.05+$24.95
                                      = $2800.90

NFI Group currently pays a dividend of $0.85 per share annually.  Therefore the yield on cost would be 3.03%.

Summary:

New Flyer Group was trading at $29.49 per share at the time of the trade.  If the option is assigned, I will end of buying the shares at a 5.02% discount from $29.49.

Obviously, I would be better to get a higher premium, but I took what the market was given.  If I was with Interactive Brokers, there is no option assignment fee and option pricing is a lot lower.  If I was with one of the big 5 banks, the option assignment fee would be over $40.00.  

I took the premium collected and followed my pay myself first model I am currently have in placed.  

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.


Monday, September 6, 2021

Dividend Income Update - August 2021

             



      
The month of August 2021 is another month of dividend income landing in my accounts.  

Due to becoming debt free, I changed my pay myself model.  Starting the beginning of August 2021.  I am paying myself 30%, just like before.  This will now consist of 24% to investing, and 6% to savings.  The investment portion is going to my TFSA. Any money left over at the end of the month, I put towards investing on top of the money allocated from paying myself first.  Hopefully, I can keep this up!
 
Note: All the dividends and totals below are in Canadian Dollars.


Non-registered Accounts 

Bank of Montreal (BMO)           - $90.10
Emera Inc.  (EMA)                   - $77.78
Shaw Communications (SJR.B) - $19.75


Subtotal : $187.63

TFSA

A&W Royalties Income Fund  (AW.UN) - $5.70
Boston Pizza Royalties Income Fund (BPF.UN) - $16.58
Cominar REIT (CUF.UN) -    $6.84
Killam Properties REIT (KMP.UN)    - $17.11
Royal Bank of Canada (RY)   -  $60.48


Subtotal: $106.71

Total = $294.34

I received a total of $294.34 in dividend income for the month of August 2021.  This represents a 2.24% decrease from 3 months ago and 7.63% increase year over year. 
  

The decrease from 3 months ago was due to Enerplus stopped paying a monthly dividend after May 2021.  Enerplus switched to a quarterly dividend with first dividend payment date in mid June 2021.  Enerplus has also increased their dividend twice since beginning of May 2021.  

I received dividend / distribution income from  8 different companies.  

I received $0.00 in option premiums within my investment accounts in August 2021.

Below is a visual of my dividend totals for the last 5 years.


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Most of my dividend income comes from my margin account. 


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Next, I will show the percentage of total income for each position.


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I will update my dividend income tab with the new amount. I will include my option premium income also. It is great to see money from passive income sources deposited into my brokerage account every single month.

Note: Any activity in my RRSP account is not included in these totals. 


How was your dividend income for August 2021?

Disclosure : Long all mentioned securities

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.