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This month, our HELOC got finalized and it was finally time to put that money to work and grow that income. As I have said before, this move isn’t for everyone. You really need to have the financial discipline to make this work, but if you do the math will work in your favor long term. Start the compounding as soon as possible. We started the month off by trimming one of our holdings but grew a bunch. Let’s go!
Sale – LMT
We sold a bit of our Lockheed Martin (LMT) position this month. Last year we backed the truck up on them and started a position all the way up to 5% of the portfolio’s allocation. Clearly, it was a great move. They were just too cheap! The stock price went on an absolute tear due to the war and bounced even higher once Germany announced they were going to increase their defense spending. Once the price surpassed $470, I kept contemplating selling a portion of our holdings. Our position was just under 7% of the portfolio then.
I try to keep our largest holdings at 5% of the portfolio but will let certain holdings go to about 6%. At 7%, it seemed like a good time to trim, and luckily enough, we timed it perfectly.
We sold 10 shares of LMT at $476 and put that money to work elsewhere. This sale lost $112 in forward income.
RRSP Stock Purchases
Disney (DIS) – I continue to be a big fan of the mouse. Streaming will be huge but with covid in the background, parks will be massive. My parents will be taking our daughter this winter and from what I understand, prices went up quite a bit and getting reservations is hard. The demand is there. Unfortunately, Shanghai recently had to close their Disneyland due to covid, so I guess we aren’t in the clear yet.
Love the brand, love the company. I’ll gladly continue to grow our position at these prices. (It’s currently cheaper than when we purchased them this month).
- 52 week high – $191.57
- 52 week low – $128.38
We added 10 more shares to our position in Disney at $146 per share.
Unfortunately Disney doesn’t currently offer a dividend.
Air Products and Chemicals (APD) – As some of you know, the last 2 months, we started a new position in APD. I think this company is cheap and could be massive in the future. The world wants clean energy and I don’t really know if electric is the right way to go for everything. Time will tell, but I’m bullish on hydrogen in the coming years. APD has some massive projects in the works.
The company has dropped substantially since the start of the year due to inflation concerns, I’ll take this dip and smile. We used the proceeds from the LMT sale to add to our APD position.
- 52 week high – $316.39
- 52 week low – $216.24
- 5 year dividend growth rate is a solid 12.63%
We added 21 more shares at $227 per share. This added $136.08 in forward income.
RESP Stock Purchases
We put 3k into our kids RESP this month. This now maxed out the account for 2022. (We put an additional 2k in it earlier in the year)
We continued to grow our position in Alimentation Couche-Tard (OTCPK:ANCUF). This stock has treated us very well since buying it during the Carrefour (OTCPK:CRRFY) dip. While it offers a small starting yield, the management knows what they are doing and have been very shareholder friendly. They actually gave us the largest dividend raise in our portfolio last year – 26%. That’s huge and you got to reward that!
- 52 week high – $56.58
- 52 week low – $40.19
- 5 year dividend growth rate is a monster 19.45%
We doubled up our position in them by adding an additional 63 shares at $48.99 per share.
This adds $27.72 to our forward income.
TFSA Stock Purchases
As you may well know, we recently got approved for a HELOC loan, with the sole purpose to max out our TFSAs. I started to put that money to work this month.
Algonquin Power (AQN) – We decided to grow this position once again. Love the renewables and water business, hate the share dilution. Great dividend growth history as well. They recently lowered their DRIP discount from 5% to 2% which is kind of a downer but is probably a better move for the company. Last year, they raised the dividend 10%, I always like growing positions that raise by 10% or more. Gretzky famously said – skate where the puck is going. Green energy is the future and will be growing like crazy in the coming years.
- 52 week high – $21.25
- 52 week low – $17.14
- 5 year dividend growth rate is 8.9%
I added 285 more shares at $18.90 per share which will bring in an additional 194.48 USD in additional income.
National Bank of Canada (OTCPK:NTIOF) – This has always been a position I have wanted to grow and get to DRIP each quarter for us. With rising interest rates, it should benefit the banks. Last year they gave us our 2nd largest dividend raise, 23%, absolutely huge. We basically doubled our current holdings and will now be able to get that DRIP quarterly. Let the compounding begin!
- 52 week high – $106.10
- 52 week low – $84.90
- 5 year dividend growth rate sits at 6.10% (regulators didn’t let banks raise dividends in 2020)
We added 62 more shares of National Bank of Canada at a share price of $101.82. This purchase adds $215.76 to that income.
Aecon Group (OTCPK:AEGXF) – We used to own this position way back but sold it for a nice profit when a Chinese company wanted to buy them out for over $20 a share. That got denied but business has been fantastic for them. I see Aecon all over the place working on new projects. I don’t see this ending soon, governments got that printing press running hot and infrastructure projects will continue to grow. Their dividend growth rate has been pretty decent and they have a starting yield over 4%.
- 52 week high – $22.28
- 52 week low – $15.34
- 5 year dividend growth rate is a great 8.9%
We bought 605 shares at $16.57 per share. This purchase brings in a whopping $447.60, Let’s go!
TC Energy (TRP) – This Russia war has really shown how important energy security is. Pipelines are vital infrastructure and they really aren’t getting built much anymore. If you own existing pipelines, you basically got a wide moat. (TC Energy doesn’t technically have a wide moat due to shorter-term contracts) Pipes are flowing these days with oil and gas. TC also has a couple of power plants which will be critical during this EV transition.
Unfortunately, they have lowered their projected dividend growth rate, but a growing 5% dividend yield still makes me smile. Last year, they raised it 7.4% but this year, they knocked it up only 3.4%. I wanted to get 2 DRIPs a quarter coming in, so we grew the position large enough to do just that.
- 52 week high – $73.17
- 52 week low – $57.39
- 5 year dividend growth rate was sweet at 9%
We bought 35 more shares at $71.37 per share, not a steal of a deal, but long term, I think I’ll continue to be happy with this purchase.
This adds $126 to our income.
Conclusion
Well, that concludes our purchases for the month. We trimmed one, added 2 new positions and grew 5 holdings. Overall, we added $1,035.64 to our forward dividend income this month. We also surpassed the 10k dividend mark in the portfolio. A great milestone. Adding in our recent 50k investment in our private investment, we now have a forward passive income of $24,835.77. It’s been a busy month since our HELOC got approved.
Will a recession come? Who knows for sure, the world is full of issues and the market keeps chugging along. We will continue to stick to the plan and buy weekly/monthly and DRIP the shares if we can, while putting cash to work whenever possible. It’s crazy to think we started our passive income journey in 2016 and here we are…
If we can do it, you can as well. We are just average people who got sick and tired of working so hard and having nothing to show for it. Make that money work for you! Once you realize that, it’s amazing how fast it actually will.
Cheers everyone and thanks for continuing to comment and follow along our journey. It really motivates me to keep grinding and grow that income. This community has been fantastic in so many ways.
How has your 2022 been treating you? Have you been growing that income? If so which companies have you been buying?
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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