Monday, April 6, 2009

State Of Dividends 1st Quarter 2009

Today, I am putting up a spreadsheet (see dividend income spreadsheet) showing two things about my dividend income for the 1st quarter of 2009. The first column called “Div Q1” and the second is called “09”. Under “Div Q1”, I have recorded the dividend increase for that particular stock for 2009 compared to 2008. In the second column of “09”, I have recorded if the company actually declared a dividend increase during the 1st Quarter of 2009. I have left in the dividend increase information for 2008.

The “Div Q1” column probably needs some explanation. First, take the company Emera (TSX-EMA). My dividend from them was 4.7% higher in 2009 then in 2008. However, Emera have not yet declared a dividend increase for 2009. They did declare a dividend increase in November 2008. So the dividends I will receive in 2009 were those declared as of November 2008. So while I will get more money in dividends from them in 2009, they have not actually yet declared a dividend increase for 2009.

In 2008, I got dividends from them in February, May, August and November at the per share rate of $.2375, $.2375, $.2375, and $.2525 for a total of $.965 per share. In 2009, I have gotten 1 dividend from then in February of $.2525 per share and if this continues for 2009, I will get from them a total of $1.01 per share in dividends. Going from $.965 per share to $1.01 per share for year gives me an increase in dividends of 4.7%.

On my list, I have 9 companies that have increased their dividends already in 2009. I also have 5 companies that have decreased their dividends. The rest have not yet made changes, but I do know that at least a further of 2 of my companies have already declared dividend increases for 2009. On an annual basis, if I still have the same portfolio now as I did in 2008, my dividends have increased overall by 1.9%. My total projected income for 2009 has gone up 7.25%. I have been buying stocks over the last 3 months with the cash I have for investing. Currently, dividends are higher than interest rates and this is why my total income for 2009 has gone up 7.25%.

I am showing 5 dividends decreases, so let’s talk about them. The first one is Barclays bank (NYSE-BCS). This is the only foreign stock I own and it is an ADR. Barclays has been giving out dividends twice a year, in April and October. When they gave out dividends, they gave a much bigger dividend in April than in October. They were hard to plan for, as you never knew exactly what you would get. However, the dividends tended to increase each year. Barclays has announced that it will not be paying a dividend in April of 2009. However, this is a temporary measure, and they will resume dividends in the 2nd half of 2009, but on a quarterly basis. There is no indication of what the dividends will be.

The next to talk about is BFI Canada (TSX-BFC). This company has gone from a unit trust to a stock company. The dividend has gone down from $1.82 a share per year, paid monthly, to dividend of $.50 a share per year paid quarterly. This sort of thing will probably occur to any company that stops being a unit trust.

The next company is Melcor Development (TSX-MRD). This company has a long history of yearly increases to their dividends. They pay dividends semi-annually in June and December. Last year they paid $.25 a share in June, but only $.17 a share in December. However, this meant that they increased their dividends from $.40 a share in 2007 to $.42 a share in 2008. Since the company has not stated yet what they will do for dividends this year, it is being assumed that the June dividend will be at $.17. However, since they are on dividend achiever’s lists, they might just increase their dividends this year, or at least not decrease them. At the moment, I do not know.

The next company is Penn West Energy (TSX-PWT.UN). This company is an oil and gas producer. Prices for these products have come down, so it is no surprise the dividends have decreased. Dividends on this company have always changed with the prices of oil and gas. Dividends on oil and gas company tend to fluctuate.

The last one to talk about is Russel Metals (TSX-RUS). This company has reduced dividends because of the current economic recession. It is being prudent. This is not a bad decision for the stockholders. After all, we will not get much if a company does not survive a recession. It is the companies that survive than live to pay us further dividends. This stock was on the Dividend Achiever’s list, I just checked, and it is still there. However, I doubt if it will stay. This company only started to pay dividends in 2000 and over the last 5 years has raised it dividends by over 40% annually up to 2008. If you look at the last 5 years and the 2009 dividend, then for the last 5 years it has been raising it dividend by just over 7% annually. This is not a particularity bad figure. I bought this company to diversify away from financials and utility companies. I will continue to hold it for now.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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