All dividends aren’t created equal

I hope everyone had a great Thanksgiving.

I, for one, am happy it’s over. Don’t get me wrong – I love the holiday and everything that comes with it (food, family and football) – but it seems as though it gets more and more exhausting the older I get. I guess everything does, but I just notice it more around major holidays.

Anyway, I think the food coma has finally worn off. I’m back and excited to dive back into the ins and outs of my portfolio.

I did receive a handful of dividends between now and a week or so ago when I posted about my $0.83 payment from Ameriprise (AMP) … there was just too much going on to post about them. Here’s a quick rundown: I was paid $0.41 for owning 1 share of LAZ, $0.25 for 1 share of MDC, $0.32 for one share of C, $0.78 for 2 shares of WSM, $0.32 for 1 share of FAST and $0.40 for 1 share of COF.

Which brings us to today, when I saw two more dividends come my way …

Today’s Dividends

Royal Bank of Canada (RY): I received a $0.72 dividend for the 1 share of Royal Bank of Canada I own. The company makes up about 0.52% of my portfolio, but I’m thinking about changing that pretty soon. I’ve owned my single share since April and, in addition to the $7.93 (11.14%) it has appreciated since then, the bank has boosted its dividend each of the last three quarters.

I know, right?

Royal Bank

Three straight quarters of dividend raises ain’t bad at all. My share earned me $0.65 back in May, $0.69 in August and $0.72 today.

Royal Bank of Canada currently has a 3.60% yield and its annualized $3.64/share dividend represents a manageable payout ratio of just 49.73%

American Airlines (AAL): American Airlines rewarded me with a $0.10 dividend for owning a share. AAL is kind of like the anti RY. It’s in a different industry – airlines typically don’t pay the type of dividends banks do – but, while I question why I don’t have more shares of RY, I wonder why I own any shares of AAL at all. American Airlines has been paying me the same small $0.10/share dividend for each of the last three quarters.

It has a yield of just 0.82%, but the payout ratio is super low, too (10.23%). I don’t know how committed the company is to its dividend, but it could boost it in a major way if it wanted to. I know I want it to. Unfortunately, I doubt that will happen anytime soon as the company’s earnings per share is shrinking, not growing. Until that trend changes, the dividend likely isn’t going anywhere.

March on!

Leave a Reply

%d bloggers like this: