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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?

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 19 comments… add one }
  • Canadian Finance April 23, 2009, 10:14 am

    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.

  • Four Pillars April 23, 2009, 10:19 am

    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.

  • cannon_fodder April 23, 2009, 11:17 am

    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.

  • Lawrence April 23, 2009, 12:44 pm

    Good idea FT! I never paid attention to the payout dates. Something to consider. Thanks!

  • wx_junkie April 23, 2009, 1:18 pm

    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.

  • Patrick April 23, 2009, 1:24 pm

    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?

  • Dividend Growth Investor April 23, 2009, 1:35 pm

    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?

  • Sampson April 23, 2009, 1:37 pm

    Patrick,

    Retirees depending on dividends as their primary source of income would care.

  • Patrick April 23, 2009, 2:17 pm

    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.

  • Sampson April 23, 2009, 2:22 pm

    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.

  • Micki April 23, 2009, 3:05 pm

    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!

  • Canadian Dream April 23, 2009, 3:39 pm

    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

  • FT FrugalTrader April 23, 2009, 4:16 pm

    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.

  • FT FrugalTrader April 23, 2009, 4:23 pm

    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.

  • Patrick April 23, 2009, 4:26 pm

    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.

  • Daniel Wintschel April 24, 2009, 1:12 am

    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.

  • Scott Hannah April 24, 2009, 2:41 am

    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!

  • Finance Gooroo April 26, 2009, 6:54 am

    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

  • MoneyEnergy April 27, 2009, 3:21 am

    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…

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