Sunday, January 28, 2018

Recent Dividend Increase

     When a person gets up and goes to work each day, they are one day hoping to be called into their boss's office on good terms.  The worker is hoping the meeting will contain a statement like "We are really impressed with your work, attendance and productivity! We are increasing your salary by X% or giving you a bonus over Y dollars".  Then the worker wakes up as this happens only in their dreams in most cases. Raises at work are becoming more difficult regardless of how hard a person actually works.
     Businesses in this economy have more issues to deal with that affect their bottom line. Examples are  an increase to the minimum wage  and the carbon tax.  In some provinces the percentage of carbon tax has increased on Jan 1 2018.  The more expenses to deal with, the less likely that a person will  get a raise.
      As each year continues to unfold, the mood of employees sours and they seem to become worried and agitated.      We hear people at our places of employment say things like, "everyone got a raise of $1.00".  These wage increases are not the same as an employee getting a raise.  The raises received by everyone at once is best referred to a cost of living increase. These raises are often only 1% to 3.5% higher.  Cost of living increase allows an individual to keep with inflation.

     There are other ways to make money besides a job. Today, it is imperative for people to have other sources of income besides a job. One of these methods is investing in the stock market in entities that pay dividends, interest, or distributions. When an investor buys a stock, REIT, trust etc. that pays shareholders or unit holders a share of profits on monthly, quarterly, semi-annually or annually. For example, a company grows year in year our and therefore the amount of earnings is increased.  The shareholder or unit holder is rewarded with a dividend increase due to the ever increasing profits generated through business activities.


      On of these companies reported earnings on January 23 2018.  The actual company is Canadian Natural Railway. Canadian National Railway trades on both the Toronto Stock Exchange under ticker symbol CNR.TO and on the New York Stock Exchange under the symbol of CNI.  The company transports goods across its network that serves 3 coasts.  The 3 coasts are west coast of British Columbia, the east coast via the ports of Halifax and Montreal, and the gulf coast of the United States.

         With the release of the quarterly and annual earnings on January 23, 2018, CN Rail awarded their shareholders with a dividend increase of 10 percent.  The dividend was increased from $1.65 to $1.82 annually.

        I currently own 38 shares of CNR.TO.  This 10.3 percent dividend increase increased my annual dividend income from CNR.TO by $6.46. This is equivalent of investing $184.57 of my money based on a yield of 3.5%.

Disclosure:  Lomg CNR.TO

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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.

Depending on the trading instruments used, the loss can exceed your initial investment or outlay of capital.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

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