Recently, I hit a portfolio milestone: $3,800 in annual dividend and interest income. I hit this passive income level when I did my research for an article about my plan to hit $5,000 a year in passive income in 2025.
As part of my research, I looked up my projected income for the year ahead. I checked my various brokerage accounts, added up the one year projected dividends, and found that they summed to $3,800. I thought I was only bringing in a little over $3,000 a year, so the $3,800 figure was a nice surprise. In this article, I will explore the three stocks that are contributing the most to my dividend income in 2024 – collectively paying me about $1,380 per year.
TD Bank
The Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock that has a 4.8% dividend yield. I purchased 125 shares of it at prices between $74 and $78. I have 125 shares of TD Bank and they pay $4.08 in dividends per year. In total, I get $510 per year in dividend income from TD Bank stock. The math on that is shown below.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TD Bank | $84.82 | 125 | $1.02 per quarter ($4.08 per year). | $127.50 per quarter ($510 per year). | Quarterly |
Is TD Bank a good investment, apart from the dividends?
You can probably tell from the fact that I hold it that I believe it a suitable investment for me. Interestingly enough, I don’t necessarily think it’s the best investment for everyone. You need a certain amount of risk tolerance to invest in TD, because it’s being investigated for money laundering in the United States. If the whole investigation and all associated fines are wrapped up by the end of this year, then TD is the cheapest large Canadian bank compared to expected 2025 earnings. If on the other hand the fines weigh on earnings into next year, then the stock will likely perform poorly. It’s a risk I’m ready to take in the context of my fairly diversified portfolio, but it’s not for everyone.
Postal Savings Bank of China
Postal Savings Bank of China (OTC:PSTV.Y) is a Chinese bank with a 6.8% dividend yield. I get about $420 per year in dividends from my Postal Savings Bank of China shares.
Like many other Chinese companies, Postal Savings Bank is far cheaper than comparable Western companies. It trades at 0.5 times book value, five times earnings and 1.4 times operating cash flow. You don’t see multiples like that with large North American banks. PSTV.Y also achieved a modest amount of growth in its most recent half-year period. Chinese banks in general are seen as risky because of that country’s property crisis, but PSTV.Y has a very low percentage of property loans in its portfolio (3%). I’m pretty content with how these shares have performed since I started buying them two years ago.
Oaktree Specialty Lending
Last but not least we have Oaktree Specialty Lending (NASDAQ:OCSL).
OCSL is a U.S. non-bank lender and business development corporation (BDC). A BDC is like a real estate investment trust (REIT); only instead of investing in properties like REITs do, a BDC loans money to struggling companies for very high interest rates. It’s a risky business: sometimes these loans go into default. However, OCSL’s portfolio has a very high yield and a small number of defaults compared to overall portfolio value.
I recently purchased some OCSL shares at a 13% yield, which is about 11% after the U.S. withholding tax. This stock has experienced capital losses over the years, but its yield is so absurdly high that the overall return has been more than worth it. I get about $450 per year in dividends from Oaktree Specialty Lending. It’s not the safest stock in my portfolio, but it’s a consistent dividend payer.
