When we had our financial epiphany back in 2011, we were drawn to dividend growth investing. Why were we attracted to dividend growth investing? First, we liked the idea that we could live off dividends and only sell principal if we really needed to. We also liked the idea that our dividend income would increase organically and would keep up with inflation over time.
The dividend growth investing strategy was easy to understand – buy quality companies that produce products we use regularly (aka hedge your consumption) and focus on companies that consistently raise their dividends. With companies raising dividend payout each year, our dividend income would grow faster than inflation, and we would not need to worry about the rising cost of groceries, gas, household items, or utilities eating into our dividend income purchasing power.
In theory, that sounds wonderful, but does it actually work? After 15 years of dividend growth investing, I thought it’d be interesting to analyze the data and determine whether our dividend income is keeping up with inflation or not.
The promise vs. the reality
If you look at our dividend income history, you’ll notice that we have been growing our dividend income at a monster rate.
We started with $675.21 in 2011 and grew our dividend income to $64,838.46 in 2025. That’s a growth of $64,163.25 in 15 years! As some readers may recall, our goal for 2026 is $72,000 in dividend income.
If you just look at these numbers, clearly, our dividend income has grown much faster than the rate of inflation.
So we’re golden, right?
Well, not exactly. Our dividend income grew from just under $700 to over $64,000, mostly because we have been injecting new capital into our dividend portfolio. Furthermore, some of the dividend growth came from enrolling in dividend reinvestment plans (DRIPs), so we would get more dividend income over time.
Despite being a numbers and spreadsheet person, I didn’t track how much dividend income growth came from organic dividend increases until 2022. If you look at the past three years, you’ll notice that we were able to increase our forward annual dividend income via organic dividend growth every single year.
If we put the organic dividend growth increases next to our annual dividend income, it’d look like this:
| Year | Dividend Income | YoY $ | Div Growth $ | % compared to YoY $ |
| 2022 | $42,305.81 | N/A | $2,367.36 | 30.0% |
| 2023 | $50,189.07 | $7,883.26 | $2,491.14 | 34.5% |
| 2024 | $57,412.72 | $7,223.65 | $3,511.07 | 47.3% |
| 2025 | $64,838.46 | $7,425.74 | $3,245.66 | 45.3% |
| 2026 | $72,000 (Goal) | $7,161.54 | TBD | N/A |
At first glance, it may look like organic dividend growth is a significant contributor to our ever increasing annual dividend income. But the numbers you see above do not paint an accurate picture. The math is more complicated because we would purchase additional shares of different stocks throughout the year and we would also increase the number of shares via DRIP.
Therefore, to truly determine whether our dividend income growth beats inflation or not, we need to isolate things and only look at organic dividend growth. How much organic dividend growth do the individual dividend stocks we own have?
The organic dividend growth numbers
At the time of writing, we hold the following individual dividend stocks (alphabetical order):
- Apple (AAPL)
- AbbVie (ABBV)
- Alimentation Couche-Tard (ATD.TO)
- Brookfield Asset Management (BAM.TO)
- BCE (BCE.TO)
- Brookfield Renewable Energy Corp (BEPC.TO)
- BlackRock (BLK)
- Bank of Montreal (BMO.TO)
- Brookfield Corporation (BN.TO)
- Bank of Nova Scotia (BNS.TO)
- CIBC (CM.TO)
- Canadian Natural Resources (CNQ.TO)
- Canadian National Railway (CNR.TO)
- Costco (COST)
- Capital Power Corp (CPX.TO)
- Emera (EMA.TO)
- Enbridge (ENB.TO)
- Fortis (FTS.TO)
- Alphabet (GOOGL)
- Granite REIT (GRT.UN)
- Hydro One (H.TO)
- Intact Financial (IFC.TO)
- Coca-Cola (KO)
- McDonald’s (MCD)
- Manulife Financial (MFC.TO)
- National Bank (NA.TO)
- Power Corp (POW.TO)
- Royal Bank (RY.TO)
- SmartCentre REIT (SRU.UN)
- Telus (T.TO)
- TD (TD.TO)
- Visa (V)
- VICI Properties (VICI)
- Waste Connections (WCN.TO)
- Waste Management (WM)
- Walmart (WMT)
Here’s the summary of the dividend history & growth summary of these companies from 2011 to 2025.
Please note that I tried my best to take into account any share splits but there could be some mistakes.
| Ticker | Base YearDPS | BaseYear | 2025DPS | Years | AnnualizedDividend CAGR | Notes |
| AAPL | $0.38 | 2013 | $1.01 | 12 | 8.5% | |
| ABBV | $1.60 | 2013 | $6.20 | 12 | 11.9% | Spun off from Abbott in January 2013. Inherited dividend streak. |
| ATD.TO | $0.17 | 2013 | $0.86 | 12 | 14.5% | |
| BAM | $0.32 | 2023 | $0.64 | 2 | 41.4% | Technically, a new entity spun off in Dec 2022. First full year 2023. |
| BCE.TO | $2.17 | 2011 | $3.87 | 14 | 4.2% | Cut dividends in 2025 |
| BEPC.TO | $0.97 | 2020 | $1.45 | 5 | 8.4% | |
| BLK | $5.50 | 2011 | $20.40 | 14 | 9.8% | No splits. Strong consistent growth. Asset management leader. |
| BMO.TO | $2.80 | 2011 | $6.44 | 14 | 6.1% | |
| BN | $0.16 | 2023 | $0.32 | 2 | 41.4% | Renamed from BAM Dec 2022. Low payout ratio; prefers buybacks. |
| BNS.TO | $2.05 | 2011 | $4.28 | 14 | 5.4% | |
| CM.TO | $1.76 | 2011 | $3.98 | 14 | 6.0% | |
| CNQ.TO | $0.36 | 2011 | $2.25 | 14 | 14.0% | Aggressive growth. Special dividends excluded. |
| CNR.TO | $0.65 | 2011 | $3.44 | 14 | 12.6% | |
| COST | $0.89 | 2011 | $4.64 | 14 | 12.5% | Regular dividends only; excludes special dividends. |
| CPX.TO | $1.05 | 2011 | $2.51 | 14 | 6.4% | Steady utility dividend growth. IPO 2009. |
| EMA.TO | $1.30 | 2011 | $2.90 | 14 | 5.9% | |
| ENB.TO | $0.98 | 2011 | $3.77 | 14 | 10.1% | |
| FTS.TO | $1.12 | 2011 | $2.39 | 14 | 5.6% | 51 consecutive annual increases. |
| GOOGL | $0.80 | 2024 | $0.80 | 1 | N/A | First dividend ever declared Mar 2024 ($0.20/qtr). Too early for CAGR. |
| GRT.UN | $2.28 | 2011 | $3.64 | 14 | 3.4% | REIT, monthly payer |
| H.TO | $0.78 | 2015 | $1.28 | 10 | 5.1% | IPO Nov 2015. Ontario regulated utility. |
| IFC.TO | $1.40 | 2011 | $4.84 | 14 | 9.3% | |
| KO | $0.94 | 2011 | $1.94 | 14 | 5.3% | 62+ consecutive years of increases. Dividend King. |
| MCD | $2.53 | 2011 | $6.68 | 14 | 7.2% | Consistent annual increases, typically in Q4. |
| MFC.TO | $0.52 | 2011 | $1.72 | 14 | 8.9% | Post-financial-crisis recovery, then strong growth. |
| NA.TO | $2.30 | 2011 | $4.56 | 14 | 5.0% | Smallest Big 6 bank. Solid growth. |
| POW.TO | $1.16 | 2011 | $2.21 | 14 | 4.7% | Holding company; Great-West, IGM. |
| RY.TO | $2.08 | 2011 | $6.04 | 14 | 7.9% | |
| SRU.UN | $1.43 | 2011 | $1.85 | 14 | 1.9% | REIT, monthly payer. |
| T.TO | $0.95 | 2011 | $1.52 | 14 | 3.4% | Growth stalled 2023-25. Dividend cut risk. |
| TD.TO | $1.305 | 2011 | $4.20 | 14 | 8.7% | |
| TRP.TO | $1.60 | 2011 | $3.96 | 14 | 6.7% | Consistent increases. |
| V | $0.15 | 2011 | $2.36 | 14 | 21.8% | |
| VICI | $1.00 | 2018 | $1.72 | 7 | 8.1% | IPO Feb 2018. Gaming triple-net lease. |
| WCN | $0.34 | 2011 | $1.14 | 14 | 9.0% | Consistent annual increases. |
| WM | $1.36 | 2011 | $3.00 | 14 | 5.8% | Consistent annual increases. |
| WMT | $0.49 | 2011 | $0.83 | 14 | 3.8% |
From the data above, we can bucket our holdings into three different categories.
Top dividend growers (CAGR >9%):
- BAM & BN – 41.4%, but only 2 years of history due to the 2022 restructuring
- Visa – 21.8%
- ATD.TO – 14.5%
- CNQ.TO – 14.0%
- CNR.TO – 12.6%
- COST – 12.5%
- ABBV – 10.1%
- ENB.TO – 10.1%
- BLK – 9.8%
- INF.TO – 9.3%
- WCN – 9%
Middle of the pack dividend growers
- MFC.TO – 8.9%
- TD – 8.7%
- AAPL – 8.5%
- BEPC.TO – 8.4%
- VICI – 8.1%
- RY.TO – 7.9%
- MCD – 7.2%
- TRP.TO – 6.7%
- CPX.TO – 6.4%
- BMO.TO – 6.1%
- CM.TO – 6.0%
- EMA.TO – 5.9%
- WM – 5.8%
- FTS.TO – 5.6%
- BNS.TO – 5.4%
- KO – 5.3%
- H.TO – 5.1%
- NA.TO – 5.0%
- POW.TO – 4.7%
- BCE.TO – 4.2% (BCE cut dividends recently, so should really be considered as a slow dividend grower)
Slowest dividend growers (CAGR < 4%)
- WMT – 3.8%
- GRT.UN – 3.5%
- T.TO – 3.4%
- SRU.UN – 1.9%
It’s interesting to see that most of the dividend stocks we hold have a rate higher than the 4% GAGR dividend growth rate. Both Granite REIT and SmartCentre REIT have very low dividend growth rate which is expected. Most REITs rarely raise their dividend payout. Even when they do, the increase is usually quite small.
Let’s compare to the year-by-year Canadian inflation based on Statistics Canada CPI data:
| Year | Inflation Rate |
| 2011 | 2.9% |
| 2012 | 1.5% |
| 2013 | 0.9% |
| 2014 | 1.9% |
| 2015 | 1.1% |
| 2016 | 1.4% |
| 2017 | 1.6% |
| 2018 | 2.3% |
| 2019 | 1.9% |
| 2020 | 0.7% |
| 2021 | 3.4% |
| 2022 | 6.8% |
| 2023 | 3.9% |
| 2024 | 2.4% |
| 2025 | ~2.0% |
| CAGR | 2.4% |
The cumulative inflation from 2011 to 2025 is about 40%, meaning that something that cost $100 in 2011 would have been about $140 in 2025. If we look at the annualized CAGR of inflation, that equates to about 2.4% over the 14 year period. One thing to note is that in 2022, the spike of 6.8% should be considered as an outlier. This was driven mostly by post-COVID supply chain disruptions, energy prices, and monetary expansion.
So how does our portfolio’s dividend growth compare to the 2.4% inflation:
| Sector | Dividend CAGR | vs. Inflation (2.4%) |
| US Technology | 14.3% | +11.9% ahead |
| Energy/Pipelines | 10.3% | +7.9% ahead |
| US Financials | 10.9% | +8.5% ahead |
| Consumer/Industrial | 8.8% | +6.4% ahead |
| Insurance/Other | 7.6% | +5.2% ahead |
| Canadian Banks | 6.5% | +4.1% ahead |
| Utilities | 6.3% | +3.9% ahead |
| REITs | 4.5% | +2.1% ahead |
| Telecoms | 3.8% | +1.4% ahead |
Interestingly, both REITs and Telecoms came out slightly ahead of the annualized 2.4% CAGR rate of inflation. However, with BCE cutting dividends last year and Telus no longer growing dividend payout and there being a high risk of cutting, the Canadian Telecoms dividend growth rate may soon lag behind the annual inflation rate. This is important to keep in mind as we move forward with our plan of living off dividends.
Since the top 15 holdings of our portfolio consist of Canadian banks, energy & pipelines, and a mix of US technology and utilities, it’s comforting to see that all these sectors have been raising dividend payout at a rate above inflation.
Additional assessment
Did our dividend portfolio keep up with inflation? If I look at the numbers from above, I’d say that collectively, our dividend income has kept up with inflation. In fact, our dividend income has grown organically far faster than inflation. While most of the dividend stocks have an organic dividend growth rate over 4% between 2011 and 2025, a few of them are below 4%.
Does that mean we should sell them?
Possibly, but since dividend income doesn’t paint the entire picture, we also need to look at total return as well. In the case of Walmart, for example, despite a low organic dividend growth rate over the period, the stock has done tremendously well. On the flip side, Granite REIT, SmartCentre REIT, and Telus could have done better (I’d put BCE in that bucket too).
The key lesson learned here is that not all dividend stocks are created equal when it comes to inflation protection. Higher-yield dividend stocks typically have a lower dividend growth, while lower-yield dividend stocks typically have a higher dividend growth.
The important part is to build your portfolio according to your investing timeline and goal. If you are relatively young, you probably should lean toward the low yield and higher dividend growth so your dividend income can grow organically over time, especially during early retirement. If you are in your 60s or older, perhaps you should lean toward the high yield and lower dividend growth spectrum to ensure you have sufficient dividend income to cover all of your expenses. What’s the right mix is a very personal decision.
What does this mean for our early retirement plans?
As we get closer to financial independence and eventually early retirement, being able to keep up or beat inflation with our dividend income has become increasingly important. In a perfect world, our dividend income will continue to grow organically every year to give us the same or greater purchasing power.
Based on the analysis above, I’m confident that our organic dividend growth will continue for years to come and the growth will outpace inflation over the long term.
That’s the long term view anyway. But things can get a bit tricky in the short term because inflation could spike due to unforeseen events (i.e. COVID) and companies may eliminate payout increases or cut dividends due to poor economic conditions.
That’s why we need to remain flexible, especially in early retirement – spend a little bit less when the market is not doing well or when inflation is high. Supplementing with part-time income will also help. Although we would love to live off dividends, withdrawing a small amount of money from our portfolio isn’t off the table either. Combined with a cash wedge, I believe we have many levers we can adjust to make things work.
Lessons Learned after 15 years
What are some of the lessons I have learned after 15 years of dividend growth investing?
One, prioritize dividend growth rate over current yield. Organic dividend growth is important, especially when you are living off dividends. It is also important to diversify across different sectors. Having a high concentration in slow dividend growth sectors can be disastrous.
Second, you can’t ignore total return. Dividend income isn’t the entire equation; total return matters. You can keep up with inflation with a combination of dividends and capital appreciation.
Another lesson I have learned is to review our holdings regularly and ensure we hold high-quality companies. A company that showed up as a Dividend All-Star five years ago may not be as solid as you think now. A good example would be stocks in the Canadian Telecom sector.
It’s also extremely important to be patient. FIRE isn’t a sprint but a marathon. You build up your investment portfolio and dividend income over a long time, not within a couple of years. This is why Warren Buffett stated, “You can’t produce a baby in one month by getting nine women pregnant.”
In case you’re wondering, over the years, we have closed out many different positions. We got into many of these high-yield, low (or no) dividend growth stocks early in our dividend growth investing journey. After learning more about the importance of organic dividend growth, we closed out these positions and reinvested our money elsewhere.
Here’s a list of dividend paying stocks we used to own and brief comments:
- Pure Industrial REIT (AAR.UN, went private in 2018)
- Algonquin Power & Utilities Corp (AQN.TO, a mistake but many dividend investors fell into the trap too)
- Brookfield Property Partners (BPY.UN, acquired by BAM in 2021)
- Canadian Tire (CTC.A, a consistent dividend grower but we never liked going to a Canadian Tire store)
- Chorus Aviation (used to be called CHR.B, now it’s CHR.TO, high yield low growth)
- Corus Entertainment (CJR.B, the media business sector is not something we understand well)
- ConocoPhillips (COP, decided to get out of oil producers)
- Canadian Utilities (CU.TO, low dividend growth rate)
- Chevron (CVX, decided to get out of oil producers)
- Dream Office REIT (D.UN, REITs have almost no dividend growth)
- Dream Industrial REIT (DIR.UN, REITs have almost no dividend growth)
- Dream Global (DRG.UN, REITs have almost no dividend growth)
- European Residential REIT (ERE.UN, REITs have almost no dividend growth)
- Energyplus Corp (ERF.TO, delisted)
- Evertz Technologies (ET.TO, we put too much emphasis on dividend growth history, ignored the fundamentals, and didn’t understand the sector)
- General Electric (GE, poor management)
- General Mills (GIS)
- High Liner Foods (HLF.TO, incorrect investing thesis)
- H&R REIT (HR.UN, dividend cut, REITs have almost no dividend growth)
- Husky Energy (HSE.TO, acquired by Cenovus)
- Intel (INTC, lost its innovation)
- Inter Pipeline (IPL.TO, acquired by Brookfield Infrastructure, another mistake where we chased the yield)
- Just Energy (JE.TO, delisted)
- Johnson & Johnson (JNJ, decided to reinvest money elsewhere to reduce # of holdings)
- KEG Income Trust (KEG.UN, acquired by Fairfax)
- Kinder Morgan (KMI)
- Laurentian Bank (LB.TO, a mistake as we didn’t realize LB was so concentrated in Quebec)
- Liquor Store (LIQ.TO, now called Alcanna, high yield, unsustainable yield)
- Magellan Aerospace (MAL.TO, don’t understand the space, focused too much on the dividend history)
- Magna International (MG.TO)
- MCAN Mortgage Corp (MKP.TO, high yield minimum growth)
- Metro (MRU.TO, would have kept it but we don’t understand the grocery space well)
- Nutrien (NTR.TO, thought the fertilizers are always needed but we don’t understand the commodity space all that well)
- Omega Healthcare (OHI, high yield low dividend growth)
- Pepsi Co (PEP, decided to pick between Coca-Cola and Pepsi, went with the former)
- Procter & Gamble (PG, facing headwind due to higher producing cost)
- Potash (POT.TO, now part of Nutrien)
- PrairieSky Royalty (PSK.TO)
- Qualcomm (QCOM, a smallish holding, decided to close out and take the profits)
- RioCan (REI.UN, didn’t like the dividend cut during the pandemic)
- Rogers (RCI.B, got out after the management fiasco)
- Royal Dutch Shell (RDS.B)
- Saputo (SAP.TO, despite being a dairy leader in Canada, the stock price didn’t do much while we were holding)
- Sabra Healthcare REIT (SBRA, another REIT got it from a spinoff)
- Starbucks (SBUX)
- South Bow (SOBO, got it from TRP spinoff, a small position, so decided to sell)
- Suncor (SU.TO)
- Target (TGT, decided to take profit and picked Walmart over Target)
- Domtar Corporation (UFS.TO, didn’t understand the sector)
- Uniliver (UL, took profit and decided to focus on PG)
- Vodafone (VOD)
- Ventas (VTR)
- Verizon (VZ)
- WestJet (WJA.TO, acquired by Onex Corp)
- Exco Technologies (XTC.TO, failed to understand the business & sector, picked Exco by looking at the Dividend All-Star list).
Looking at these names, I realized that one big mistake we made multiple times in the past was picking out names from the Dividend All-Star list by looking at the dividend streak without doing proper research on the companies and the sectors. This mistake was evident with our purchases of Evertz Technologies, Laurentian Bank, Saputo, Domtar Corporation, and Exco Technologies.
Final Thoughts
Wow, this article turned out to be much longer than I originally anticipated. Oops!
According to my analysis, I am confident that our dividend income can grow organically and keep up with inflation, so we don’t end up with diminishing purchasing power.
Since 2011, we have tweaked our dividend portfolio quite a bit and we are generally happy with the individual stocks we have in our portfolio today. Nothing is perfect, so we need to continue to monitor the health of these stocks and whether the companies can continue to grow their dividend payout. Ultimately, there’s no such thing as the perfect investment portfolio. There will be losers and winners, the key is to have more winners than losers. Always focus on buying high quality companies with strong competitive advantages, healthy dividend payout ratios, and a track record of growing their dividends. Furthermore, it’s important to look at each company holistically and from the macro level. Having some understanding of the business and sector is also vital.
As we get closer to living off dividend income in the near future, I take comfort in knowing that our dividend income has demonstrated the ability to grow organically over the years. I am confident that this trend will continue.
Has your dividend portfolio kept up with inflation? What sectors have been your best and worst performers? I’d love to hear your experiences in the comments below.
