Tuesday, September 3, 2013

BNS Dividend Increase August 2013

After your life gets turned upside down from a family emergency, there’s nothing like a dividend increase to help raise your spirits. It’s been a while since I’ve been able to post, let alone post about dividend increase in my portfolio so I’m very happy with this news. Thanks to a hefty 1.77 billion dollar profit, the fine folks over at the Bank of Nova Scotia thought they would reward investors with a $0.02 dividend increase,  bringing the quarterly dividend to $0.62 as of October, 2013. That’s the second increase in 2013!

What’s the big deal about 2 cents!?

To most people, $0.02 doesn’t sound like a lot of money. In fact I’ve had people laugh in my face after they found out I was so excited for such a small dividend increase in the past. I would just smile and shrug my shoulders because I guess they just didn’t get it. They couldn’t see past that insignificant amount of money to realize that it’s an increase of $0.02 per share, and that I didn’t just have one share; I had a few hundred shares that will keep paying me an increasing income year after year. It seems no matter how much I want to share my knowledge of dividend investing, the majority of people aren’t able to look past the small details in order to see the big picture. Oh well, it’s their loss I guess.

It’s only an increase of 3.33%, Big Whoop!

Well it might only seem like 3.33% increase now but BNS increased the quarterly dividend from $0.57 to $0.60 earlier this year. That’s a total dividend increase of 8.7% for 2013 which is freaking fantastic for any dividend investor. As the cost of goods and services increase due to inflation (usually 2-4%), my dividend income will be able to keep up with inflation and then some, allowing a steady and comfortable retirement. I just hope my wife realizes what a catch I’ll be to all the old ladies, forced to buy dented cans and stale bread on their fixed income!

Banks As A Long Term Investment

I could bore you to tears with long winded calculations and stock analysis but why bother? Banks have been around a long time and still thrive every year no matter what the state of the economy. Have you noticed that bank fees seem to be increasing year after year? Have you noticed the amount of interest you make each month is a frightening fraction of what you end up paying in bank fees, yet the banks still report billion dollar profits each and every quarter? I think banks(at least in Canada) are a no brainer investment, especially for the long run.

Let’s take a look at BNS’s dividend history below:
Except for the lag during and after the financial meltdown, The Bank of Nova Scotia’s dividend history looks quite sexy and has recovered quite nicely in the last few years. If it can continue to keep up the dividend growth, BNS will be a welcome contributor in my portfolio for the long haul.

I’m eager to see whether the other banks will be increasing their dividends this week as well; maybe I’ll have more good news Thursday morning. BMO had a great quarter but I find they are quite frugal when it comes to dividend increases; hopefully I’ll get an early Christmas gift from them later this year. Until then, I’ll just keep collecting my dividends and hope for the best.

This article was written by The Loonie Bin. If you enjoyed this article, please consider subscribing to his feed.


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