Lean, Mean Dividend Machine

If you want to carpet bomb your portfolio with dividends you can buy shares in companies that distribute dividends at different times during the year. The goal is to receive dividends every month, and in some extreme cases one can receive dividends every day. My portfolio pays me dividend every month of the year and the sum is increasing year by year.

The advantage of receiving dividends every month is to have stabile stream of income, either to reinvest or to live off. This will motivate you to keep on adding cash to your portfolio every month and your savings rate will actually increase (trust me on this). The reason why is because you will experience the effect on dividends much quicker than if you have to wait until the spring next year. The human mind wants to be satisfied sooner rather than later and this is one way of doing it.

FebruaryRNW*, AbbVie, Aker BP, Equinor,
MarchRNW*, Brookfield Renewable Partners, Castellum AB, Mowi, Wartsila, Visa Inc
AprilRNW*, Aker ASA, Bakkafrost, BeijerRef, Cloetta, UPM Kymmene
MayRNW*, AbbVie, Aker BP, Elkem, Investor AB, Kitron, Tomra, Mowi, Securitas
JuneRNW*, Brookfield Renewable Partners, Visa Inc
AugustRNW*, AbbVie, Aker BP, Equinor
SeptemberRNW*, Brookfield Renewable Partners, Castellum AB, Mowi, Wartsila, Visa Inc
OctoberRNW*, BeijerRef,
NovemberRNW*, AbbVie, Aker BP, Investor AB, Equinor, Mowi,
DecemberRNW* , Visa Inc

RNW* = TransAlta Renewables

An advantage for the companies that distribute dividends several times a year is that they also benefit of spreading their payouts over the course of a year. Normally, Nordic companies pay out most of its dividends during the spring and this can create liquidity issues for the company.

The easiest way to achieve this is to include companies that pay a dividend on a monthly basis (yes, they exist!). Realty Income Corp (Ticker: O) is the most well-known monthly dividend paying company and they actually titles themselves as the “The Monthly Dividend Company”. To find other monthly dividend payers the best place to look, don’t ask me why, is in Canada. In my portfolio I hold the Canadian company TransAlta Renewables (Ticker: RNW) as the only monthly dividend paying company, but I might add others in the future. A commonality within these types of companies is that they are REITs (Real Estate Investment Trusts) and in order for them to use this type of corporate structure they have to pay out most of its earnings as dividends.

Warning: Remember that you should never buy a stock just because of the timing of the dividend. A certain dividend date is not a quality measure!

Success! You're on the list.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s