Recently, I hit a major milestone in my portfolio building journey:
$4,000 in projected dividend and interest income per year!
Averaging out to $333 per month, this sum will go a long way in helping me achieve my financial goals. Although I don’t get exactly $333 per month, as the stocks I own pay varying amounts of dividend income, I usually get at least one dividend payment from at least one stock each month. In this article, I will explore the three stocks that contribute the most to my $4,000 per year in average annual dividend and interest income – $122 per month between the three of them.
The Toronto-Dominion Bank
The Toronto-Dominion Bank (TSX:TD) is by far the largest single contributor to my annual dividend and interest income. I own 155 shares of this stock, which pays $1.02 in dividends per quarter, or $4.08 per year. So my annual dividend income from TD Bank stock is $623.40 per year.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TD Bank | $79.22 | 155 | $1.02 per quarter ($4.08 per year). | $158.10 per quarter ($632.40 per year). | Quarterly |
As you can see, TD Bank stock throws off quite a bit of income per dollar invested in it.
Why does the stock have such a high yield?
A lot of it comes down to the fact that it has been beaten down so badly. The company got involved in a money laundering scandal, which caused its price to fall all the way to $74. The concern was that the company would take untold billions in fines because of the scandal. I figured the concerns were overblown and bought all the way down to the bottom tick. Since then, the stock has paid substantial dividends and risen in price.
Oaktree Specialty Lending
Oaktree Specialty Lending (NASDAQ:OCSL) is the second biggest contributor to my portfolio dividend income. I have 158 shares paying US$2.20 in dividends, which works out to $463 per year in Canadian dollar terms. Below is a table showing how that breaks down (stock price and dividends converted from USD).
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| OCSL | $21.76 | 158 | $0.733 per quarter ($2.933 per year) | $115 per quarter ($463 per year) | Quarterly |
OCSL stock has not performed all that well for me overall. It has declined in price since I started buying it, though it’s up a little from the cheapest of my buys, which I made just over a week ago, when the stock went below US$16. It’s a private credit firm, meaning that it makes money by issuing loans to distressed companies. There’s some definite risk here, but the juicy dividend yield is hard to argue with.
The Vanguard FTSE All-World ETF
Last but not least, we have the Vanguard FTSE All-World ETF (NYSE:VEU). This is technically an index fund, not a stock, but it is nevertheless the third-largest contributor to my annual dividend income. The fund paid me about $376 in annual dividend income in the last 12 months. As an ETF, this one’s dividend is unpredictable, as constituent companies are raising and lowering their dividends all the time. Nevertheless, I expect to continue getting a few hundred dollars a year in dividend income from VEU for the foreseeable future.
Foolish takeaway
There you have it – the three largest contributors to my $333 per month in dividend and interest income. The dividends from these stocks average out to $122 per month. The rest comes from about half a dozen other stocks plus a $35,000 GIC portfolio that pays $1,750 per year. Hopefully, you got some investing inspiration from seeing my top three dividend stocks/funds explored in detail.
