Dividend Increase for MacDonald's

Yep, MacDonald's Corp (NYSE: MCD) is doing it again this year, increasing its quarterly dividend 15% from $0.61 to $0.70 per share.

Another Dividend Increase (Telus)

This morning, Telus (Toronto: T, T.A) has announced that it was boosting its dividend again (that's the second time in the last year), from $0.525 to $0.55 per quarter, a 4.8% increase. I own Telus in my DRiP portfolio.

More Dividend Increases (EIF, JNJ, SU, PEP)

Three more of my companies have recently increased their dividend payments.

Exchange Income Corporation (Toronto: EIF) announced in early April that it was raising its dividend from $0.13 to $0.135 each month, a 3.8% increase. The company was also announcing the acquisition of Westower Communications, a company that designs, builds, maintains and services wireless phone and other communications towers throughout North America.

Last week, Johnson & Johnson (NYSE: JNJ) announced a small 5.6% boost to the quarterly dividend, from $0.54 to $0.57 per share.

On Monday, Suncor (Toronto: SU) also announced an increase to the quarterly dividend, from $0.10 to $0.11 per share, a 10% increase.

Finally, this morning PepsiCo (NYSE: PEP) announced a 7% increase to its dividend, from $0.48 to $0.515 per quarter.

I own shares of EIF, JNJ and SU in my DRiP portfolio, whereas most of my PEP shares are in my RRSP.

Procter & Gamble Dividend Increases

Like clockwork, Procter & Gamble (NYSE: PG) has announced its yearly dividend increase, from $0.4818 to $0.525 per quarter. That constitues a 9% increase, always a nice boost. I own shares of PG in my RRSP account.

My Recent Dividend Increases

Since the beginning of the year, I've gotten a series of dividend increases from the companies I hold in my different portfolios. Here's a quick run-down of those.

Bank of Nova Scotia (Toronto: BNS) has just announced that after a 2-year freeze of its dividend, it was again on the rise with a 6% increase (from $0.49 to $0.52 per qurter). I own BNS in my TFSA account and in my DRiP portfolio. [Sector: Financials]

A few weeks ago, TransCanada Corp (Toronto: TRP) announced a 5% increase (from $0.40 to $0.42 per quarter). TRP kept icreasing its dividend steadily even during the worst of the financial crisis. I own TRP in my DRiP portfolio. [Sector: Utilities]

Another company was Abbott Laboratories (NYSE: ABT), which increased its quarterly dividend 9% (from US$0.44 to US$0.48). Abbott is another company in my DRiP portfolio. [Sector: Pharma]

Pfizer (NYSE: PFE) also announced a dividend increase, bumping it up 11% (from US$0.18 to US$0.20 per quarter). Againg, I own some Pfizer shares in my DRiP portfolio. [Sector: Pharma]

In a different sector, 3M Company (NYSE: MMM) raised its quarterly dividend 4.7% (from US$0.525 to US$0.55). My 3M shares are in my RRSP account and in my DRiP portfolio. [Sector: Industrial]

Hasbor (NYSE:HAS) played its part with an impressive 20% increase (from US$0.25 to US$0.30 quarterly) in my DRiP portfolio. [Sector: Consumer discretionary]

All told, these increases will add about $14 to my dividend income for 2011. This may look small, but that's because my holdings in most of these companies are small. Still, it means an additional 0.126% to my dividend yield.

Two More Dividend Increases

Two more of the companies I own in my DRiP portfolio raised their dividend this week.

First, Fortis Inc. (Toronto: FTS) increased its dividend 3.5% from $0.28 to $0.29 per quarter. This is a small increase, but the company is in the power generation business, and in a recession less power is consumed as businesses decrease their products output and thus their energy consumption.

Second, Pfizer (NYSE: PFE) just announced this morning that it was raising its dividend 11% from $0.18 to $0.20 per quarter.

These will have only a small impact individually, but they do add up. :o)

Canadian General's Year-End Dividend

Yesterday I mentioned that I was waiting to see what what the end-of-year special dividend would be for Canadian General Investments (Toronto: CGI).

Well, this morning the fund announced that it will pay a special cash capital gains dividend of $0.76 per common share, payable on December 24, 2010.

This brings up CGI's dividend this year to $1.00 per share, for a 5% yield. Considering that the stock has also moved up 30%, this makes for quite a profitable investment this year.

I've just moved most of my shares of CGI into my TFSA, so my year-end dividend will be sheltered from taxes. I did this because this "special cash capital gains dividend" is treated as regular income, instead of the preferencial tax treatment of a normal Canadian dividend.

Dividend News

Some recent news regarding my dividend-paying companies...

Enbridge (Toronto: ENB) has announced an increase to its dividend, from $0.425 to $0.49 per quarter. That's an increase of 15%. Cheers!

Bank of Nova Scotia (Toronto: BNS) and Bank of Montreal (Toronto: BMO) both announced good quarterly earnings. Things continue to look good for our Canadian banks, but no dividend increase yet. I had slight hopes that BNS would announce one.

Other companies in my portfolio that should soon announce dividend increases are Fortis (Toronto: FTS) and 3M Company (NYSE: MMM). I am also waiting to see what the end-of-year special dividend will be for Canadian General Investments (Toronto: CGI).

All of those companies are part of my DRiP portfolio, although I also own some shares of 3M in my RRSP.

Brokerages Lowering their Commissions

There is a wave of fees reductions at Canadian brokerages going on right now. Many of them have announced a lowering of the minimum account value needed to get reduced commissions on purchases and sales.

I currently have 2 brokerage accounts, one with TD Waterhouse (for my TFSA) and one with Disnat (my RRSP). Both have announced a reduction of fees.

TD Waterhouse: "We are pleased to announce that effective November 4, 2010, clients with $50,000 or more in household assets, invested through TD Waterhouse Discount Brokerage, will now be eligible to trade Canadian or U.S. equities for $9.99 flat when using our online or automated telephone Electronic Brokerage Services. Canadian and U.S. option trades will be subject to the same $9.99 base rate plus $1.25 per contract. Clients with less than $100,000 in household assets must also register their account(s) for eServices to qualify."

That's good, but it will be some time before I reach $50K with only my TFSA. I might get there sooner if I were to consolidate accounts, but right now I get a service with Disnat that TDW does not provide: Medallion signature guarantees. I find those really useful to exchange shares directly with other investors, as part of my DRiP strategy.

There are also rumors that TDW may soon offer USD currency within their RRSP. *That* might make it worthwhile for me to consolidate some RRSP money to reach the treshold, as I hold a lot of US stocks in my RRSP. I'd have to bring at least $25K in the RRSP to avoid paying annual fees.

Disnat: "We are pleased to announce that as of November 1, 2010 you will be able to take advantage of our flat-rate commissions of $9.95 per transaction when you complete a minimum of 10 monthly transactions via our Disnat Classic website! This new flat fee will also apply to accounts with a minimum net worth of $100,000."

Not as good as what TDW offers. Disnat has not changed its treshold; it's just telling investors that if they trade more, they'll get a better deal. As I don't do a lot of transactions (and don't plan on doing much more in the future), this change has no benefit for me.

The major reason for me to keep this account with Disnat is the Medallion signature guarantee service and the fact that the brokerage has an office here in Quebec City. So I can just drop by to get my signature guaranteed (for securities transfers) at no cost. Although TDW also has such a service, they do not use the Medallion stamp, which I need for US transfers.

So in the end, the fees reduction wave has had little effect on me. But it will make it easier for me to reach the reduced treshold in the future.

Telus Increases Dividend, Removes Discount

Telus (Toronto: T and T.A) today announced that the company is raising its dividend from $0.50 to $0.525 per quarter. This is a 5% increase, which follows another 5% increase that was announced in May. Good news for me, as it will raise my yield on cost to 6%.

But the company has also announced that, starting with the March dividend, it will stop giving a discount on reinvested divideds. This second announcement was burried in its 3rd quarter results, at page 7. Shares for dividend reinvestment will now be purchased on the open market instead of being issued from treasury.

That's good news overall. I own Telus in my DRiP portfolio.

Pengrowth Energy to Become a Corporation

Yesterday, Pengrowth Energy Trust (Toronto: PGF.UN) announced that it plans on becoming a corporation on December 31th, 2010.

Basically, nothing much will change. Distributions will become dividends (as so will be taxed less for investors) but remain at $0.07 per month, at least for now. As explained in the announcement, the company has a big tax pool that mean it doesn't expect to pay taxes until 2014.

One area was unclear in the announcement, and that was the continuation of the reinvestment and purchase plan. Investors relations was contacted, and apparently the company plans on keeping it the same. That would include the 5% discount on both reinvested dividend and new purchases. :o)

The conversion will need to be approved by the unitholders during a special meeting to be held on December 16th. With those terms, I expect it to be a formality.

New Finance Site: Moneyville.ca

Two of the bloggers that I read regularly have mentioned that they will be blogging on the new site developped by the Toronto Star, Moneyville.ca, so I thought I'd give it a look and see whether it would be worth reading.

My first impressions were quite good. The web site is clean and doesn't look cluttered, and the articles seem interesting. I'll be digging around the site some more, but it looks like a good one. What I particularly like is the fact that it is targeted at the average Canadian, instead of cathering to a nice or presenting things from a U.S. perspective.

Thumbs up from this Frog!

McDonald's Increases Its Dividend

McDonald's Corp (NYSE: MCD) has just declared an increase to its quarterly dividend, from $0.55 to $0.61 (an 11% increase), starting on December 15.

Well, it seems people keep gobbling up McFood and drinking McCoffee even during tough times. I know that I do, although I try to keep it to the occasional visit. I want to fatten my wallet, after all, not my waistline!

I hold shares of MCD in my RRSP account. Based on my cost of purchase, this new dividend brings my yield to a juicy 4.4% (as opposed to a 3.3% yield based on current price).

Scotiabank: Higher Earnings, No Dividend Increase

Third quarter earnings are out for Scotiabank.

Well, there you have it. I was hoping to get a dividend increase from Scotia, but alas I'll have wait some more. Dividend

Earnings rose to $0.98 per share, with net income over the $1B mark for the third quarter. So this is another good quarter for the bank.

I'll remind myself that one of the reasons that had me select this bank for my first-ever DRiP company was because management is prudent and disciplined. The obviously thought they'd wait until the details on the new international financial rules are known -- and what their impacts will be -- before raising the dividend.

Scotiabank, When Will You Give Me a Raise?

Bank of Nova Scotia (TSX: BNS) is the first company that I acquired in my DRiP portfolio, 4 years ago. I see it as a strong company that's quite good at making money (it is a Canadian bank, after all). It has held up well through the financial CDO melt-down in 2008 and through the following recession. A great company.

However, the last time the quarterly dividend was raised was for the payment of July 2008, when it went up from $0.47 to $0.49 per share. So for 6 straight quarters, the dividend has remained the same. This was understandable, since earnings were somewhat impacted by the financial melt-down and then recession. At the height of the troubles, the dividend payout ratio rose as high as 70% of earnings. This ratio was at 50% before things started going sour, and is now at 54% based on earnings from the last 4 quarters.

Another thing to consider is the status of Scotiabank as a dividend achiever -- a company that has raised its dividend every year for at least 5 years. This is important because many indexes (and index funds) use such criteria when deciding which companies to invest in. According to Scotia's web site, the bank has increased its dividend 37 out of the last 39 years.

Things have improved a lot in the last year, and although there is still some uncertainty (as regards to the new international regulations for banks), we are certainly out of the deep end. It would certainly encourage investors to see some positive sign. Even a small increase in the dividend would be seen as a sign of confidence.

So, Scotiabank, will you give me a raise now? Or will you wait some more?

What do you think?

(Scotiabank will announce details of its third quarter results on August 31, 2010 at 7h30 AM EDT.)

Good News from ING Direct Canada

There were recently some additions to ING Direct Canada, with new products being added. I thought I'd share this.

First, ING Direct now offer low-fee mutual funds in Canada. Although the selection is quite small (only 3 funds are offered), this adds another low-cost option for investors. All funds are diversified, with different profiles based on risk tolerance (Balanced Income, Balanced, Balanced Growth). This is straightforward index investing, with assets spread across 4 indexes (Canadian Bonds, Canadian Stocks via the TSX 60, US Stocks via the S&P 500, and International Stocks via the MSCI EAFE) with only the proportion invested in each index changing based on the fund selection. MERs are only 1%, and there are no other fees. A variety of account types can be opened (non-registered, RSP, RIF and TFSA).

Second and more important, ING Direct has announced that it will soon offer no-fee checking accounts (called Thrive). Basically, all transactions (bill payments, cheque writing, email money transfers). The account even has a small NSF protection of $250 built-in. Canadian Capitalist has a good review of the products, and Million Dollar Journey ran a comparison with PC Financial no-fee checking account, which is the reference right now in Canada.

I've looked closely at ING Direct's Thrive accounts, and the only drawback that I can see is that after the first 20-cheque booklet, you have to pay a fairly steep price for new paper cheques ($10 for 20 cheques) while they are free at PC Financial. Everything else is free, including EMT (email money transfers), which cost $1.50 at PC Financial.

But PC Financial is not available in Quebec, whereas Thrive will be!

So I signed up for the preview for the account, which will start on September 14th. Although at first I was disappointed with the cost of additional cheques (cheques for my current day-to-day account cost about half of what ING will ask for), I figured I could use this account to pay for many of my online bills, which will reduce the strain on the number of transactions in my main account.

GE Increases Its Dividend

General Electric (NYSE: GE) has just announced that the company was raising its quarterly dividend 20%, from $0.10 to $0.12, starting in October. The company, which is often seen as a proxy for the U.S. economy, cited "continued strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses through the first half of 2010" as a reason for boosting the dividend earlier than previously hinted. The company is also reinstating its share buyback program.

GE cut its dividend by 67% a bit over a year ago to $0.10 per quarter. Even with this increase, the dividend is still far from the $0.31 per quarter that GE was paying before the cut.

Still this is a positive move from the company. I own shares of GE in my RRSP portfolio, where the increase will mean a small $17 per year added to my dividends.

Preet Giving Away an iPad

To celebrate the 3rd anniversary of the "Where Does All My Money Go" blog, Preet is giving away an iPad and more.

Happy anniversary!

Imperial Oil Increases Dividend

Another company from my DRiP portfolio has increased its dividend. Imperial Oil (Toronto: IMO) has boosted its quarterly dividend from $0.10 to $0.11 -- a 10% increase.

This will have a very small impact on my dividend income, as I own only a very small part of the company (about 10 shares at this point). This is still welcome news.

H&R REIT Announces Distribution Increases

The well-known real estate income trust, H&R REIT (Toronto: HR.UN), today announced as part of its 1st-quarter results that it will start increasing back its distributions. From the current $0.06 per month, distributions will slowly increase each quarter until it hits $0.0875 per month in the second quarter of 2012.

This is great news. The distributions were cut in half (from $0.12 per month to $0.06) in January 2009 when financing for The Bow (a big office tower in Calgary) became difficult during the financial crisis. But although that string of increases shows that situation is improving, it does not (yet) brings the distributions back to the pre-crisis level. But it is a nice reward for those who had faith in the future.

I own about 100 units of the trust in my DRiP portfolio. This year's increases will add about $7.50 to my dividend income.