Tuesday, 16 August 2016

A series of sells and two buys

I recently sold 220 shares of BNS @ $66.29 for a capital gain of $2,179.75 + $456.80 in dividends. That's $2,636.55 / $12,393.90 = 21.3% in 7 months. I like BNS and plan on getting back in if the price drops. I'll be using some of the proceeds to fund my kids' RESP.

I also decided to limit my exposure to oil and gas. I got burned with dividend cuts from ESV and BBL and now there is chat about the safety of CVX’s and RDS.B’s dividend. And their recent results were not reassuring.

I sold 100 shares of BBL @ $25.72 for a capital loss of -$790.40 + $156 in dividends = -$634.40. That’s -$634.40 / $3,352.40 = -18.9% over roughly 2 years.

I sold 48 shares of CVX @ $103.15 for a capital gain of $31.14 + $309.59 in dividends = $340.73. That’s $340.73 / $4,910.00 = 6.9% over roughly 2 years.

I sold 70 shares of RDS.B @ $54.45 for a capital loss of -$231.74 + $291.40 in dividends. That’s $59.66 / $4,033.20 = 1.5% over about 1.5 years.

For over a month now, I've been looking for solid deals and I think I found two. On Monday, August 15, I initiated positions in Flowers Foods and Power Corp. 

FLO:

Number of shares purchased
300
Price per share
$14.9693
Commission
$9.95
Total cost per share
$15.00
Total cost
$4,500.74
Annual dividend per share
$0.64
Initial dividend yield
4.27%
Increase in forward 12-month dividends
$192.00

POW.TO:

Number of shares purchased
125
Price per share
$27.16
Commission
$9.95
Total cost per share
$27.24
Total cost
$3,404.95
Annual dividend per share
$1.34
Initial dividend yield
4.92%
Increase in forward 12-month dividends
$167.50

My 12-month forward dividends have been reduced from $11,139 to $10,258 and my cash position stands at $44,000.

Tuesday, 5 July 2016

New Milestone and a Sell

Although it may be short lived, my dividend growth portfolio finally popped over $400,000 CAN, $30,400 of which is in cash (my non-registered account cannot be seen on the screen shot below because I have to scroll down to view it).



Last week, I unloaded my 100 shares of UL @ $48.07 because
1. the PE is in the mid 20's.
2. the dividends received have decreased over the last two/three years (due to forex).

Q1Q2Q3Q4
2014$0.3654$0.3938$0.3842$0.3637
2015$0.3253$0.3140$0.3232$0.3385
2016$0.3246$0.3598??

3. given Brexit, i don't believe the Euro (in which dividends are declared) is going to appreciate relative to the USD. So dividend payments in USD will continue to be low for some time to come.
4. my average dividend yield analysis shows that $40 is a fair and $35 is undervalued. So $48 is a little high.
5. i don't understand why the stock suddenly rallied to $48. It might be due to Mondelez making a bid for Hershey.

Friday, 1 July 2016

Bolt-on Purchase - Empire Company

On June 29, I took the opportunity to increase my holdings in EMP.A. Quarterly results were not great and the stock price was down 11%. The integration of their Safeway Canada aquisition is proving very difficult which is the reason for their poor financial results.  A day prior to my purchase, the company announced a 2.5% dividend increase.

EMPIRE COMPANY LIMITED (TSX: EMP.A)  is a Canadian company headquartered in Stellarton, Nova Scotia. Our key businesses are food retailing and related real estate, through wholly-owned subsidiary Sobeys Inc., and a 41.5% equity accounted interest in Crombie REIT. With $24.6 billion in annualized sales and $9.1 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 125,000 people.

EMP.A (I averaged down):

Number of shares purchased
100
Price per share
$19.20
Commission
$9.95
Total cost per share
$19.30
Total cost
$1,929.95
Annual dividend per share
$0.41
Initial dividend yield
2.12%
Increase in forward 12-month dividends
$41.00

My initial purchase of EMP.A was on March 14, 2016: 145 shares @ $22.27.

With this purchase, my 12-month forward dividend income is $11,139.

Tidbit

On August 9, 2009, I bought 495 shares of EMP.A @ $13.73.  The dividend yield was 1.8%.
I sold these shares on July 9, 2014 @ $23.73 because of low dividend yield + low dividend growth.





Friday, 10 June 2016

Bolt-on Purchases - GM and Telus

Today, I took the opportunity to increase my holdings in two companies.

GM (I averaged down):


Number of shares purchased
60
Price per share
$29.19
Commission
$9.95
Total cost per share
$29.36
Total cost
$1,761.35
Annual dividend per share
$1.52
Initial dividend yield
5.18%
Increase in forward 12-month dividends
$91.20

Telus (I averaged up):


Number of shares purchased
125
Price per share
$40.42
Commission
$9.95
Total cost per share
$40.50
Total cost
$5,062.45
Annual dividend per share
$1.84
Initial dividend yield
4.54%
Increase in forward 12-month dividends
$230

My 353 shares of Telus are throwing off $650/year and the company has stated that it will increase its dividend by 7 to 10% per year up till the end of 2019. So $650*1.07^3 = $796. That's a little closer to the $980/year Telus is charging me for my cell phone service.

With these purchases, my 12-month forward dividend income is $11,090.

Thursday, 9 June 2016

New Purchase - TGT

Today, I added to my position in TGT. It seems like the stock price is down because of their bathroom policy, and just like everything else that's happened to Target (think exit from Canada and credit card breach), this will blow over.

I like what Brian Cornell has done and is doing.

Number of shares purchased
50
Price per share
$67.52
Commission
$9.95
Total cost per share
$67.72
Total cost
$3,385.95
Annual dividend per share
$2.40
Initial dividend yield
3.54%
Increase in forward 12-month dividends
$120


With this purchase, my 250 shares of TGT have an average cost of $62.87 and my 12-month forward dividend income is $10,750.


Wednesday, 8 June 2016

right on target

Yes. The pun is intended. A nice 7.1% dividend increase from Target today, which is pretty much what I was expecting (just read my article published yesterday). 

That means the quarterly dividend is going from $0.56 to $0.60, my 200 shares have a YOC = $2.40 / $61.66 = 3.89%, and I'm getting $32 more per year.

Not a bad day.

Tuesday, 7 June 2016

Options Trade - Target

After the recent market run up, it seems value can only be found in companies people love to hate. GM is one. TGT is another.

My average dividend yield analysis of TGT shows the average 3 and 5 year yields to be 3.0% and 2.63%, respectively. Using the current dividend, that corresponds to $74.72 and $85.08. Because TGT is trading at a discount to these prices, I decided to sell a put option on this baby:

Jun/06/2016 Sold 1 TGT Jan 20 '17 $67.50 Put @ 4.40 ($11.21 fee)

If I get put the shares, my cost (after commission) would be $63.22.

Last year, TGT announced a 7.7% dividend increase on June 9. If they announce a 7.1% increase this year (i.e. $2.40 annually), the 3 and 5 year yields would correspond to share prices of $80.08 and $91.16.

The FAST graph below indicates that EPS are estimated to increase about 10% in 2016, 2017 and 2018. I couldn't believe these numbers so I checked S&P and they estimate 2017 and 2018 EPS at $5.25 and $5.70, respectively. Is it me, or is it a magical time (yeah yeah, I've got Donna Lewis - I Love You Always Forever - blasting on my Focal Aria 926)?






Sunday, 5 June 2016

Options Trade - GM

In January 2016, I bought 100 shares of GM. Ever since, the stock has been range bound. So far, this has allowed me to make some extra money buying and STC call options:

16/Feb/2016 Bought 1 GM Sept '16 $30 Call (-$181.21)
21/Mar/2016 STC 1 GM Sept 16 '16 $30 Call (+$293.80)
Profit: $112.59


08/Apr/2016 Bought 1 GM Sept 16 '16 $30 Call (-$157.20)
25/Apr/2016 STC 1 GM Sept 16 '16 $30 Call (+$278.79)
Profit: $121.59

And on Friday:

03/Jun/2016 Bought 1 GM Sept 16 '16 $30 Call (-$127.20)

As I commented on My Dividend Pipeline's recent purchase of GM shares, I believe the current price offers excellent value.









Tuesday, 31 May 2016

New Purchase - CVS Health

Today, I added to my position in CVS. I think both CVS and WBA will grow exponentially over the next couple decades.

Number of shares purchased
50
Price per share
$96.80
Commission
$9.95
Total cost per share
$97.00
Total cost
$4,849.95
Annual dividend per share
$1.70
Initial dividend yield
1.75%
Increase in forward 12-month dividends
$85


My original purchase of CVS was for 100 shares back in March 2013 @ $52.60. The dividend yield was $0.90 / $52.60 = 1.71% and 2012 EPS was $3.03 (PE = 17.4). My YOC for these 100 shares is now $1.70 / $52.60 = 3.23%.

2015 EPS was $4.62 (PE = 21.0). 2016 and 2017 EPS are estimated at $5.86 (PE = 16.5) and $6.60 (PE = 14.7), respectively.

With this purchase, my 12-month forward dividend income is $10,598.

Monday, 23 May 2016

New Purchase - ABT

Today, I used some cash from the sale of Baxalta to buy some shares in Abbott Laboratories. I like the potential aquisition of STJ.


Number of shares purchased
150
Price per share
$37.47
Commission
$9.95
Total cost per share
$37.54
Total cost
$5,630.45
Annual dividend per share
$1.04
Initial dividend yield
2.77%
Increase in forward 12-month dividends
$156

With this purchase, my 12-month forward dividend income is $10,591.

Thursday, 19 May 2016

Dividend growth at work - JP Morgan

In case you missed it, on May 17, JP Morgan increased its quarterly dividend to $0.48 from $0.44, or 9.1%.

I purchased shares of JPM during the London Whale incident in 2012. My initial purchase in May was for 100 shares @$36.65. I then bought 100 more in June @$32.05. My average dividend yield at the time was $1.20 / $34.35 = 3.49%.

Since this time, the yearly dividend has been bumped up from $1.20, to $1.52, to $1.60, to $1.76, and lately to $1.92.

In 4 years, my dividends have risen from $240 to $384, which gives me a YOC of 5.59%. I wish all my investments were as successful!

On another note, I sold my 200 shares of Baxalta this week. If I did the math right, my cost basis was $6,388.00 and I sold them for $8,683.86. The dividend was pretty shitty but the capital gain of 35% was fantastic.

Wednesday, 11 May 2016

Entertaining Myself with Trading - Pason Systems

I've been trading in and out of Pason Systems since last year:

Feb 2015  bought 100@$18.35
Dec 2015      sold 100 @$21.35

Mar 2016  bought 100@$16.52
Apr 2016       sold 100@$18.25

May 09, 2016  bought 115@$16.05

Today the stock dipped to $14.98 and then recovered to $16.12. The 6% dip was due to poor quarterly results...but  3 months ago, the CEO said to expect poor performance over the next year. Short memory people have.

So far so good.

Friday, 8 April 2016

Options trade - GM

In a previous post, I mentioned that I had bought and later sold a September 2016 call on GM that went like this:

16/Feb/2016 Bought 1 $30 Call (-$181.21)
21/Mar/2016 STC 1 $30 Call (+$293.80)
Profit: $112.59

Since I sold to close (STC) the call option above, the price of GM has gone to about $29.30 from $32.00. So today, I bought the exact same call for way less money!

08/Apr/2016 Bought 1 GM Sept 16 '16 $30 Call @ $1.46 (+$11.21 in fees)

So I paid a total of $157.21 for the right to buy 100 shares of GM @ $30 a piece, valid until September 16, 2016.


Friday, 25 March 2016

New Purchase - Pason Systems

In February 2015, I bought 100 shares of PSI @ $18.35 and sold them in December 2015 @ $21.23, for a 15.7% capital gain. If you count the $51.00 in dividends received, my total return was 18.5%. However, during this time, I sold a call on these shares which netted me $77.60.  Including this amout, my total return was 22.7% over 9 months. If only I had been so lucky with Ensco (I lost $15,000 on that one).

Anyway, on March 24, 2016, I decided to get back into PSI at a much lower price; 21.8% lower than my sell price.

Number of shares purchased
100
Price per share
$16.52
Commission
$9.95
Total cost per share
$16.62
Total cost
$1,661.95
Annual dividend per share
$0.68
Initial dividend yield
4.1%
Increase in forward 12-month dividends
$68

PSI isn't doing so well. Since the decline in oil, they've shrunk their work force by 25% and EPS have not been very stable:

2009201020112012201320142015
-$0.07$0.44$1.05$0.49$0.29$1.36-$0.17

On the bright side, the company has no debt and basically controls market share in Canada (94%), USA (61%), Australia (85%) and Latin America (70%). 

With this purchase, my 12-month forward dividend income is $10,418.

Thursday, 24 March 2016

Update on several transactions

National Bank (NA)
11-Feb-2016, bought 30 shares @ $36.13
18-Mar-2016, sold 30 shares @ $43.42
+20.2% in a little over 1 month
Profit: $218.60

Caterpillar (CAT)
12-Jan-2016, bought 20 shares @ $62.40
18-Mar-2016, sold 20 shares @ $74.85
+20.0% in two months
Profit: $249.06

CSX
9/Nov/2015 Sold 1 $27 Put
18/Mar/2016 BTC $27 Put
Profit: $96.59

Vodafone (VOD)
5/Feb/2016 Sold 1 $30 Put
18/Mar/2016 BTC $30 Put
Profit: $102.59

General Motors (GM)
16/Feb/2016 Bought 1 $30 Call
21/Mar/2016 STC $30 Call
Profit: $112.59

Pfizer (PFE)
22/Mar/2016 Sold 1 Jan 20 '17 $30 Put @ $2.40


I took advantage of the market rally to lock in some profits.

Luckly, not all stocks rallied. This gave me an opportunity to sell a put in PFE and reinitiate a position in Pason Systems (PSI), which I will write about at a later date.

Have a great Easter weekend.

Monday, 14 March 2016

New Purchase - Empire

I first bought shares of Empire Company (Sobeys, IGA) in 2009 and sold for a handsome profit in 2014. The dividend yield and dividend growth were just too low.

The recent uptake in the market has left very few deals on the table. I've been on the hunt and I think I may have found one. EMP.A is trading at BV, the Graham price is $26 and the CAPE is 16. But it's not without problems. The March 9, 2016 press release says:

"The challenges that we experienced in the first half of fiscal 2016 related to the integration of our Safeway business only intensified in the third quarter. In addition, increased promotional activity across the West as well as a difficult economic environment mainly in Alberta and Saskatchewan, resulted in sales erosion in our Safeway banner and West business unit," said Marc Poulin, President and CEO, Empire Company Limited.

"While these challenges, and the implementation of associated mitigation plans, remain a top priority, it has become apparent that stabilizing our business will take longer than originally expected and has required us to take an impairment charge this quarter. Our focus is on rebuilding top-line sales in the West through initiatives such as our Better Produce at Lower Prices initiative introduced into the market at the end of the third quarter.


So today, I bought back in.


Number of shares purchased
145
Price per share
$22.20
Commission
$9.95
Total cost per share
$22.27
Total cost
$3,228.95
Annual dividend per share
$0.40
Initial dividend yield
1.80%
Increase in forward 12-month dividends
$58

With this purchase and the reduction in BHP's dividend, my 12-month forward dividend income stands at $10,475 per year.

Thursday, 18 February 2016

New Purchase - High Liner Foods

Not long ago, I purchased 300 shares of High Liner Foods (HLF) at an average cost of $15.01 and sold soon after at $15.39, plus $36 in dividends.

Today I reinitiated a position at a much lower price; 15.7% lower to be exact.

Number of shares purchased
150
Price per share
$12.90
Commission
$9.95
Total cost per share
$12.9663
Total cost
$1,944.95
Annual dividend per share
$0.48
Initial dividend yield
3.70%
Increase in forward 12-month dividends
$72

It’s a relatively small company with a market cap of roughly $400 million CAD. Using the adjusted diluted EPS for 2015 of $1.14 USD (this company reports earnings in USD so that's about $1.56 CAD), the PE is $12.85/$1.56 = 8.2. The dividend payout ratio is $0.48/$1.56 = 31%. I get a graham price of $17 and a CAPE of 12. I hope management's plan to address the issues works out.


With this purchase, my 12-month forward dividend income stands at $10,554 per year.