On January 20th, I purchased 25 shares of Royal Bank of Canada (TSE: RY) at $65.40, with a trading cost of $6.95 for a total investment of $1,641.95. RY pays an annual dividend of $3.16, so my yield-on-cost is an abundant 4.83%. This is a great, juicy dividend yield for such a high quality stock. I hope RY drops further and I can pick up more shares at a cheaper price. Though, since purchasing RY (seven market days ago), shares have shot up 8.18%.
My 25 new shares of RY contribute $79.00 to my 12-month forward dividend income, averaged out to an increase of $6.58 per month. Considering Whitecap Resources just cut their dividend by 40%, and Pengrowth Energy just suspended their dividend, my 12-month forward dividend income is now $1,264.60, averaged out to$105.38 per month. The small climbs add up, it’s only January and my monthly dividend income is inching it’s way to $150 per month. I also don’t account for currency fluctuations when calculating my 12-month forward dividend income, despite having dividends from three companies (Goldcorp, W.W. Grainger, Wal-Mart) being paid in US dollars.
I currently own shares in the Canadian banks: Bank of Nova Scotia (BNS), Canadian Western Bank (CWB) and now Royal Bank of Canada (RY).
Why I Invested in Royal Bank of canada
I wasn’t sure whether I wanted to buy Royal Bank of Canada or Toronto-Dominion Bank (TD) for a couple months, then I finally decided to compare TD and RY side-by-side to determine which had the metrics I valued more, and RY won, so I chose to purchase shares in that company. Click on the link to view the reasons why RY surpassed TD in the metrics I value most. I think TD is also a great Canadian bank stock with less volatility than the other bank stocks, and a larger exposure to the US than RY, which I consider a very good thing.