Dividend Payout Timing for the Monthly Cashflow
If you are a believer in dividend investing and would like to use this strategy to give you dependable monthly payments, then dividend timing is an order. What do I mean? Dividend companies typically pay their distributions once every 3 months but they do not all pay on the same month. How would you arrange it so that your dividend payments are flowing into your account in a timely matter?
One way is to sort your strong dividend blue chips into groups organized by dividend payout month.
Taking some of the companies from the dividends achievers list and their associated dividend payout date:
Canadian List
| Company | Symbol | Distribution Months |
| Bank of Montreal | BMO | Feb, May, Aug, Nov |
| National Bank of Canada | NA | Feb, May, Aug, Nov |
| Power Financial Corp | PWF | Feb, May, Aug, Nov |
| Royal Bank of Canada | RY | Feb, May, Aug, Nov |
| Brookfield Properties | BAM.A | Feb, May, Aug, Nov |
| IGM Financial | IGM | Jan, April, July, Oct |
| TransCanada Corporation | TRP | Jan, April, July, Oct |
| Bank of Nova Scotia | BNS | Jan, April, July, Oct |
| AGF Management | AGF.B | Jan, April, July, Oct |
| Canadian Imperial Bank of Commerce | CM | Jan, April, July, Oct |
| Toronto-Dominion Bank | TD | Jan, April, July, Oct |
| Great West Lifeco | GWO | Mar, June, Sept, Dec |
| Enbridge | ENB | Mar, June, Sept, Dec |
| Sun Life Financial | SLF | Mar, June, Sept, Dec |
| Fortis | FTS | Mar, June, Sept, Dec |
| Manulife Financial | MFC | Mar, June, Sept, Dec |
| Toromont | TIH | Mar, June, Sept, Dec |
| Husky Energy | HSE | Mar, June, Sept, Dec |
| Canadian Western Bank | CWB | Mar, June, Sept, Dec |
| Imperial Oil | IMO | Mar, June, Sept, Dec |
| Canadian Natural Resources | CNQ | Mar, June, Sept, Dec |
| Canadian National Railway | CNR | Mar, June, Sept, Dec |
| RIOCAN Real Estate Trust | REI.UN | Monthly |
U.S List
Here’s a sample list from the Powershares dividend achievers list.
| Company | Symbol | Current Yield |
| McDonald’s Corp | MCD | Feb, May, Aug, Nov |
| IBM | IBM | Feb, May, Aug, Nov |
| Pfizer Inc | PFE | Feb, May, Aug, Nov |
| Johnson & Johnson | JNJ | Feb, May, Aug, Nov |
| Chevron | CVX | Feb, May, Aug, Nov |
| Walmart | WMT | Mar, June, Sept, Dec |
| General Electric | GE | Mar, June, Sept, Dec |
| Automatic Data Processing | ADP | Mar, June, Sept, Dec |
| Praxair | PX | Mar, June, Sept, Dec |
| Lowes | LOW | Jan, April, July, Oct |
| Medtronic | MDT | Jan, April, July, Oct |
| Procter and Gamble | PG | Jan, April, July, Oct |
Investing purely on dividend payment timing is most likely poor judgement, but knowing when dividends are paid can help smooth out the cash flow. This is especially true if you are depending on dividends to cover your expenses.
Do you account for the timing of dividends when purchasing stock/etf’s?
19 Comments, Comment or Ping
1. Canadian Finance
Never looked at them by payout dates before. Like you said, I wouldn’t want to invest based of dates alone, but spreading out the payout dates would keep a Smith Manoeuvre running more smoothly.
Apr 23rd, 2009 @ 10:14 am
2. Four Pillars
Interesting thoughts but I think if someone wants regular payments they should invest in fixed income or an annuity. With dividend stocks you are going to have irregular payments and that’s just the way it is.
Apr 23rd, 2009 @ 10:19 am
3. cannon_fodder
I hadn’t looked at payout dates at all, but if you have many equities (like FT’s portfolio) chances are it will be relatively balanced.
Frankly, I wouldn’t look at it from an SM perspective since ultimately a dividend producing portfolio is not as tax efficient as one which produces no income.
However, when using this investment portfolio to fund your retirement, then irregular dividend payouts may have a more negative impact.
Again, that likely will not matter in my case since I will “meltdown” my RRSP to pay the interest charges on my SM LOC and with that and a TFSA I have the option to control how much I withdraw and when.
Apr 23rd, 2009 @ 11:17 am
4. Lawrence
Good idea FT! I never paid attention to the payout dates. Something to consider. Thanks!
Apr 23rd, 2009 @ 12:44 pm
5. wx_junkie
FT, I’m taken aback by seeing RIOCAN Real Estate Trust on your list. Are you not contradicting your own words by owning an income trust in your leveraged portfolio? Or maybe this is outside that portfolio. I assumed all your dividend payers were in your leveraged portfolio for your SM, but maybe this isn’t the case.
Apr 23rd, 2009 @ 1:18 pm
6. Patrick
Seems a little goofy to me. Don’t you have three months’ worth of expenses in cash at any time anyway? Why do you care about the timing of dividend payments?
Apr 23rd, 2009 @ 1:24 pm
7. Dividend Growth Investor
I don’t typically care about payout dates. I just try selecting the best dividend stocks and hope they keep increasing their dividends. I don’t mind keeping all dividends received in a given quarter, then divide the amount in 3 and then spend it over the next quarter..
Another thing you could do is limit yourself to stocks paying monthly dividends.. But why limit yourself on such a small thing, when you could view everything from a quarterly perspective and then work your way to monthly from there?
Apr 23rd, 2009 @ 1:35 pm
8. Sampson
Patrick,
Retirees depending on dividends as their primary source of income would care.
Apr 23rd, 2009 @ 1:37 pm
9. Patrick
Sampson,
Seems to me that retirees who don’t have 3 months of expenses in cash and are relying on dividends for their income are surfing in dangerous waters.
Apr 23rd, 2009 @ 2:17 pm
10. Sampson
Anyone living off proceeds of dividends alone will obviously have enough money to handle precarious situations.
Although to some extent – I agree with you, it shouldn’t matter.
Even if I were paid once every 4 months now, I’d be fine. Just have to be disciplined with your spending.
Apr 23rd, 2009 @ 2:22 pm
11. Micki
Well, it seems like everyone is pretty much on the same page. My strategy is to live off dividend income when I can finally retire, but I also plan on having some cash and other investments. If you can do a monthly budget, you can do a quarterly budget and just spread out your income.
I plan on always having 3-months worth of expenses in cash, and then just replace it with the dividend income as the time comes.
Although it would be more practical to have it spread out evenly, I wouldn’t pick my stocks based on the timing of dividend payment.
btw, love your blog and your new forum FT!
Apr 23rd, 2009 @ 3:05 pm
12. Canadian Dream
I have to agree that the timing of the payouts should not matter. If you have enough cash parked somewhere to cover living expenses for a year or two in retirement you can just add the money to the account as you get it. Over the year it should even out.
I’ve never looked at payout dates since I really don’t care as long as I get my money during the year.
Tim
Apr 23rd, 2009 @ 3:39 pm
13. FrugalTrader
Patrick, you are right, it is a bit goofy isn’t it? However, I can see merit where one lives off dividends. Even if they had 3 months worth of expenses in cash, it’s nice to have steady cash flow every month.
Apr 23rd, 2009 @ 4:16 pm
14. FrugalTrader
wx_junkie, even though the portfolios in the post look a lot like my SM portfolio, they actually represent the dividends achievers list.
Disclaimer though, I own REI.UN within my RRSP.
Apr 23rd, 2009 @ 4:23 pm
15. Patrick
Well, you guys have a point. If my employer told me they were going to start paying me quarterly instead of every two weeks, I’d consider that an inconvenience.
Apr 23rd, 2009 @ 4:26 pm
16. Daniel Wintschel
I’ve never paid too much attention to dividend payout dates, as I tend to mostly buy stuff that pays out monthly (I love the consistent cash flow). It’s an interesting idea though – one I hadn’t really thought of.
Apr 24th, 2009 @ 1:12 am
17. Scott Hannah
If anyone needs help, there is always the Credit Counselling Society, which is a Canadian non-profit organization which offers free advice. Check out http://www.nomoredebts.org . Hope this helps!
Apr 24th, 2009 @ 2:41 am
18. Finance Gooroo
Don’t really pay a lot of attention to the dividend payout dates, but who knows, maybe I’ll need to some day. Great post, very informative. As a former Canadian resident, your blog and many other big Canadian bloggers inspired me to begin Finance Advisory Stop
Apr 26th, 2009 @ 6:54 am
19. MoneyEnergy
Great idea. I’ve been doing this for the past two years now. I also balance out the quarterlies with the nice monthly-paying trusts, for as long as they last…
Apr 27th, 2009 @ 3:21 am
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