Tuesday, 26 May 2015

Next Buy Watchlist: May 2015

   Once again I have some capital to deploy, and have been refining which areas of my portfolio to add to. As well as having to consider the encroaching maximization of my Tax Free Savings Account. Which means I am having to start planning how I manage which investments will reside inside it, and which investments will be more tax efficient outside of it.

   For that reason, as you might have noticed I have been leaning pretty heavily in the direction of higher yield, monthly payers, in particular REITs. Since a larger portion of their total return is derived from their monthly distributions rather than potential capital gains when selling a stock. And with my general inclination to buy and hold the stocks that I buy for the long term, when I do eventually setup a non-registered account it should be more tax-efficient for me to have lower yielding, consistent dividend payers outside of my TFSA since in Ontario there is a pretty good tax break on dividend income from Canadian companies. So most likely in the long term (2+, 5+ years?) I would be transitioning my bank stocks like TD, RY and BNS to there while filling up my current account with REITs. Hoping to make a post in the future on REITs and tax efficiency

Dream Office REIT (D.UN)

    Dream focuses on owning and managing quality office buildings in downtown and suburban business districts. This was my first REIT holding and I have added to it fairly recently and am planning to do so again in the future, perhaps even this time around. Dream continues to have above average occupancy rates of its offices and boosts stable tenants in its core holdings of Toronto and Calgary, despite the recent decline in oil prices. Which is a key factor in keeping its funds from operations stable and growing, which allows the REIT to pay its generous monthly distribution of  8.4%.


    RioCan is my other REIT holding and it fills the roll of focusing on owning, developing and operating small and large shopping centers. Generally, their centers are 'anchored' with a large, recognizable long-term tenant such as a bank branch, grocery store or mall outlet.I get a bit of a smile every time I go by a lot with the "Operated by RioCan" at the bottom. Knowing in part, that the property is giving me a little bit of its income every month. RioCan has a more modest distribution yield of 4.94%, but has a solid history of increasing its dividend when compared to Dream.

Suncor (SU)

    This massive Canadian integrated oil company has so far been a bit of a sore spot on my portfolio from when I initiated my position back in September 2014, as it has fallen nearly 16% since then as oil prices have declined. I continue to hold on to the position and continue monitoring it for good opportunities to buy in to. Over the past few months I have seen it oscillate from a general low in the $35 range, and in the upper range of $39 fairly consistently and I see the $36-37$ as a good valuation to get back into it. Overall, Suncor remains a massive company which has been pushing itself to continue looking for efficiencies and other cost cutting measures to keep its cost per barrel down. So far the dividend remains quite safe as Suncor has a very solid balance sheet still. And even at today's price of $36.21 the dividend yield is 3.04%. The main foreseeable issue with them is that if oil remains low for a sustained period of time, than they may not be able to, or unwilling to let go of more capital to continue raising the dividend as they have so consistently in the past.

    These three are the main holdings which I am leaning towards. Dream and RioCan represent my inclination towards income generating assets, whereas Suncor offers a history of long term dividend growth and the potential for a substantial gain in its share price if/when oil prices rise and stabilize. And since Suncor will most likely have its position 'moved' into a non-registered taxable account where I will collect dividends from in a tax efficient manner I may be able to see a considerable tax-free gain from it in the future.

Monday, 18 May 2015

Recent Buy! May 2015

    Found myself with some extra cash floating about since I received my tax refund this month, the benefit of not earning a lot eh? So with my tax return I put it to work right away and threw in some additional earned cash with it, as well as allocating some of my record breaking dividends from last month as well. And since I knew my return was coming I have been following a few stocks in particular, but didn't have the time to post a watchlist as I saw a good opportunity to buy. So I put that money to work by purchasing additional shares in the monthly paying Pembina Pipeling Corp. (PPL).

    Recently PPL has taken a bit of a minor beating in its share price, down 1.92% in the past month. Even though they recently declared a 5.2% increase in their dividend.  With a 52 week low of $36.16, and high of $53.04 it is a bit on the lower end of the midpoint of those valuations. I picked up my recent 47 shares at $41.13, which has lowered my average cost basis from my previous buy of PPL at $41.73 to a total share count of 70 at $41.33.

    With these additional 47 shares working for me, I now receive $7.17 more per month and $86 per year. Which roughly works out to a yield of 4.4%, which to me is pretty solid. And as with its recent dividend increase, PPL has a consistent record of increasing its dividend and has a good record of increasing its share value over time by consistently growing its business.

    Overall I have been quite happy with my holding of PPL and am very happy to now be holding more of this great company. In one my portfolio simulation accounts its grown in the lower double digits while paying out a great dividend. Combined with my prior holdings I now expect a healthy monthly payout of $10.68 to contribute to my passive income stream. I am also expecting to make another addition some time later this month, and will definitely make a list of what I am watching and hoping to add to my portfolio. As well as a couple stocks that I will be considering as potential buys if I were to have a non-registered account or a US stock for an RRSP contribution.

Wednesday, 13 May 2015

Recent Dividend Increases

   Over the past few months a few of the companies that I follow and hold have raised their dividends. I am as always very happy to be the beneficiary of these free 'raises' for holding the stocks.

The following stocks raised their dividends: PPL, AQN, PZA, MFC

Wednesday, 6 May 2015

April 2015: Income & Expenses

    April has passed on by at what feels like a lightning fast pace! Especially considering I had no glorious week of vacation in the Caribbean to slow things down, and I have been working quite a bit more that I have usually in previous months. With April's passing spring is finally getting its start here in Toronto and I feel positive its going to be a great summer! My portfolio has gone into high gear with all my recent purchases.


    Income was quite good this month overall, with my receiving three paychecks to boost the 'Work' column, although one of those was smaller than usual since during the two week period it covered I was on vacation. Having that 3rd payment though certainly made up for it. April also had an unusually higher 'Other' sources of income, even though my tips were about average I also received a deposit from the government (HST credit) as well as I closed out an account from another bank which I had forgotten about (Woops). So I added that transfer amount to the Other income as well, felt a bit like finding that mystical forgotten about $20 in a winter or spring jacket :) To cap off the months income, I also received my new record for dividend income! A whooping $143.95! Which is by far my highest amount of passive income that I have received so far, nearly doubling my last highest of $75.17 in January,


    I managed to keep expenses down quite well in April, with a lower than average grocery bill and thankfully no unexpected or one time costs in the 'Other' category unlike last months. However my Entertainment and Restaurant bill were higher than usual, in part due to going out for a good all you can eat sushi dinner with friends. It was delicious!

   Overall the month of April was a good one. Having the triple pay checks, government rebate, an unexpected balance transfer and $143.95 in dividends really helped out! And with the lower expenses this month  I managed a great savings rate of 45%!! I am also pretty happy and impressed that my dividend income this month managed to equal 8% of my work income and could have covered 12.2% of my expenses this month!

Tuesday, 5 May 2015

April 2015 Dividend Update!

    The end of March and the beginning of April were two very busy times for me, with several additions made to my portfolio. A few of those buys were before their respective stocks ex-dividend dates and that is very visible in my dividend income results this month! Better yet, the additions made to REI.UN, PZA, BCE, and ZDV did not make it into this months payout, which means in three months time I should be getting this months $143.95 PLUS the income from those new shares added to the total! This months total also smashed my previous record in January by $75.17!