Even with the latest hits to the value of my stock portfolio, I was happy to see two dividend increases for May 2012. The first one was for Royal Bank which increased their dividends by 5.6%. Even with this increase in dividends, it is expected that the Dividend Payout Ratio for Earnings will go lower in 2012 (from 65% to 49%).
The other increase was for Pembina. The thing about Pembina, I seem to be getting a higher dividend that they have declared. In January I got what they declared which was a monthly $.13 dividend. However, in February I got a $.1326 dividend (a 2% rise). Now for May they declared a dividend of $1.35, but I got one of $.1377 a 3.8% rise in dividends. Company said that they were raising their dividends in May from $.13 to $.135 which is a 3.8% rise in dividends.
I do not know what is happening here. But they have done this sort of thing before. When they converted from an income trust to a corporation they said they were not changing their dividends from $.13 per month However, as an income trust they were really paying $.1326 per month (or $1.56 per year). When they switched to a corporation they really reduced the dividends to pay $.13 per month or $1.56 per year).
Pembina is paying out more than 100% of their earnings. However, they are really still running their corporation as an income trust as they have a tax pool they help them avoid taxes until 2014 to 2015.
We are only into the first part of June and my dividend income has increase 8.3% so far this year. My portfolio has dropped 5.2% from last month. If subtract off money I took out to live on, my portfolio is down 5% since last month.
My portfolio is up 1.9% this year and TSX is down 4.4%. My portfolio tends to be less volatile than the TSX.