Good day everyone, and thanks for stopping by FindependenceCanada.
Today we’re going to do another run down of our dividend portfolios, only this time we’re going to look at things a little differently.
If you’ve seen our previous posts where we track our monthly dividend income reports as well our projected income looking 12 months ahead today we’re going to go a step further on those numbers and break down how our portfolio looks sector by sector.
Our dividend portfolio:
Here’s a visual representation of what we’re talking about:
We simplify our sector a little bit here for instance putting Canadian National Rail or 3M which can be considered under an “industrial” umbrella instead into utilities and consumer goods respectively.
When we say “Target %” in the far right column that is actually our desired allocation into each sector rather than the % of our overall income we wish to attain from those sectors.
As you can see by nature some sectors such as REITS and Oil & Gas will pay a little higher dividends (for now). And sectors like Technology tend to pay lower.
For simpler reading we’ll do a breakdown here of our current income:
UTILITIES – 24.7% of income
CONSUMER GOODS – 20.5% of income
FINANCE – 20.4% of income
REITS – 10.5% of income
OIL & GAS – 9.2% of income
INTERNATIONAL ETF/INCOME – 6.2%
TELECOMMS – 6.1%
TECHNOLOGY – 2.4%
What we intend to change:
So there are two changes we expect to make, the first being that we are going to slowly balance out our portfolio towards our target allocations which includes minor increases to real estate and consumer goods with a slight decrease in our international and telecomm holding weight. None of these are far off target so this should be fairly easy.
The second change we anticipate is one that it is out of our control and that is the likely dividend cuts we’re going to receive.
The most glaringly likely cuts come from the oil and gas sector where we hold Suncor, Shell, BP and Cenovus.
How big will these cuts be? Who’s to say, but we’re anticipating losing anywhere from about 20% – 50% of our Oil & Gas related income. It should be noted we’ll hold onto these companies through this and will hope to see the day these payout return to where they are now.
Another sector that could be hit would be Finance if we had to guess due to the lower interest rates making it a more challenging environment to be profitable in for the banks. I won’t attempt a number on how far these cuts could go I’m more mentally preparing for some sort of cut in this sector.
This is why we try and buy the best in class dividend companies though, so that in these hard times our companies are the most likely of any out there to maintain payouts to their shareholders and have a track record that proves it. These are the companies that we’re loyal to and will remain loyal to in the ups and the downs.
So that’s it for our portfolio today, what are our readers doing to change their allocations? Are you guys expecting cuts too? Be sure to let us know below or over on our Instagram page @FindependenceCanada and we’ll be sure to respond.
Thanks for stopping by,
FIC.