Back in December 16, 2008 the Ontario Teachers' Pension Plan discontinued its bid to takeover BCE at $42.75. Unsurprisingly, the stock cratered from 2007's high of around $41.74 to the December 12, 2009 low of $21.23. However, looking in context a few years later with the price now at $59.28, more than doubling, it made plenty of sense to buy into the shares.
A few months after the OTPP cancelled its deal, for some reason, I decided it was time to make a large investment (relative to my net worth back then) of 75 BCE shares at an average price of $24.0697. Perhaps I was seeking dividends and finally raised enough money to make the purchase. A couple days later on May 22, 2009 the stock plunged 4.773% from the opening price on news that OTPP closed out its position in BCE. I happened to take a screenshot at end of day and was very likely relieved to see the price recovering from the day's low of $22.94, $1.06/share loss, to a more palatable closing price of $23.91 with a $0.1597/share loss.
The dividend record date was June 15 and paying out $0.3850/quarter, which yielded me a wonderful 6.398%. As an added bonus the next dividend grew to $0.4050, an increase of 5.1948%, and yielding 6.7304%. A 5.19% increase in my income within a few months is always welcome. Even better, since owning it for the last 7 years there have been a total of 11 dividend increases. The last dividend paid of $0.6825 represents a total dividend increase of 77.2727% or an annualized 6.4393%!
| Declaration date | Record date | Payment date | Amount of dividend | % Increase |
| 2009-05-06 | 2009-06-15 | 2009-07-15 | $0.3850 | |
| 2009-08-05 | 2009-09-15 | 2009-10-15 | $0.4050 | 5.19481% |
| 2009-11-11 | 2009-12-15 | 2010-01-15 | $0.4050 | |
| 2010-02-03 | 2010-03-15 | 2010-04-15 | $0.4350 | 7.40741% |
| 2010-05-05 | 2010-06-15 | 2010-07-15 | $0.4350 | |
| 2010-08-04 | 2010-09-15 | 2010-10-15 | $0.4575 | 5.17241% |
| 2010-12-09 | 2010-12-15 | 2011-01-15 | $0.4575 | |
| 2011-02-09 | 2011-03-15 | 2011-04-15 | $0.4925 | 7.65027% |
| 2011-05-11 | 2011-06-15 | 2011-07-15 | $0.5175 | 5.07614% |
| 2011-08-03 | 2011-09-15 | 2011-10-15 | $0.5175 | |
| 2011-11-02 | 2011-12-15 | 2012-01-15 | $0.5175 | |
| 2012-02-08 | 2012-03-15 | 2012-04-15 | $0.5425 | 4.83092% |
| 2012-05-03 | 2012-06-15 | 2012-07-15 | $0.5425 | |
| 2012-08-07 | 2012-09-14 | 2012-10-15 | $0.5675 | 4.60829% |
| 2012-10-31 | 2012-12-14 | 2013-01-15 | $0.5675 | |
| 2013-02-06 | 2013-03-15 | 2013-04-15 | $0.5825 | 2.64317% |
| 2013-05-08 | 2013-06-14 | 2013-07-15 | $0.5825 | |
| 2013-08-07 | 2013-09-16 | 2013-10-15 | $0.5825 | |
| 2013-11-06 | 2013-12-16 | 2014-01-15 | $0.5825 | |
| 2014-02-05 | 2014-03-14 | 2014-04-15 | $0.6175 | 6.00858% |
| 2014-05-05 | 2014-06-16 | 2014-07-15 | $0.6175 | |
| 2014-08-06 | 2014-09-15 | 2014-10-15 | $0.6175 | |
| 2014-11-05 | 2014-12-15 | 2015-01-15 | $0.6175 | |
| 2015-02-04 | 2015-03-16 | 2015-04-15 | $0.6500 | 5.26316% |
| 2015-04-29 | 2015-06-15 | 2015-07-15 | $0.6500 | |
| 2015-08-05 | 2015-09-15 | 2015-10-15 | $0.6500 | |
| 2015-11-04 | 2015-12-15 | 2016-01-15 | $0.6500 | |
| 2016-02-03 | 2016-03-15 | 2016-04-15 | $0.6825 | 5.00000% |
I added more shares since that the initial purchase both from a synthetic Dividend Reinvestment Plan through my broker and additional purchases from the market. As a result the average cost has increased my yield has changed with the purchases. Looking at the original investment of 75 shares, by now they would have been yielding 11.342% and paying out $51.1875/quarter.
One rough final metric I like to use is my "Years to Freedom". This is roughly the number of years before the investment at the current dividend will pay off for itself by returning the principle paid. Everything afterwards starts generating funds in excess. The original investment's principle and dividend would have paid off in 15.63 years and with the current dividend that has now reduced to 8.82 years. Since the start the 75 shares have returned $1,149.5625 in dividends and the original principle $1,805.2275 leaving a deficit of $655.665. Based on the 75 shares' current quarterly return of $51.1875 then I've got about 13 quarters/3.2022 years to go.
While there is always a risk of a company cutting their dividend this risk is reduced (not eliminated) by purchasing quality companies with a track record of dividend increases. Hopefully, you can see the power of having patience and increasing dividends. There are many other examples of companies like BCE raising their dividend overtime and this increasing dividend is the basis of some long term dividend investment strategies.
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