National Bank of Canada raises dividend 2%

National Bank of Canada Logo

On December 2nd, the Board of Directors at National Bank of Canada announced “a dividend of 56 cents per common share, up 1 cent or 2%, payable on February 1, 2017 to shareholders of record on December 28, 2016” (www.nbc.ca)

Before Net Increase After
Annual Dividend $2.20 $0.04 $2.24
Monthly Dividend $0.183 $0.004 $0.187
Percentage Increase 1.82%

National Bank was one of my smallest investments made, and yet bears the largest gain at over 55%. That was an unfortunate combination, but this Quebec-based company continues to deliver dividend raises and so I will hold on to my shares and perhaps add more when the market valuation drops and the dividend returns to my large yield-on-cost. At the time, however, it appears that banks with exposure to the U.S.A offer more upside (Royal Bank, or TD).

Dividend Income increased 0.05%

Considering the Dividend Beginner portfolio contains 30 shares of NA, my annual income from NA has increased by $1.20, from $ 66.00 to $67.20. My 12-month forward dividend income has increased from $2,294.04 to $2,295.24, an increase of 0.05%. My income from NA accounts for 2.7% of my annual dividend income.

While a $1.20 increase in annual dividend income seems quite low, think about how it would require an investment of $29.48, at a yield of 4.07% (NA’s dividend yield) to generate $1.20 in dividend income. That’s the equivalent of getting one to three hours of your life back, depending on your wage.

Before Net Increase After
Annual Dividend $ 2,294.04 $1.20 $ 2,295.24
Monthly Dividend $191.17 $0.10 $191.27
Percentage Increase 0.05%

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