Monday, April 6, 2020

Dividend Income Update : March 2020



      
The month of March 2020 is another month of dividend income landing in my accounts. Recently, I switched my pay yourself first model to concentrate a little on debt repayment.  The interest on debt is 7.16% 5.66% plus the insurance on the debt.  The decrease in the interest rate is a result of emergency rate cutes by the Bank of Canada over the COVID19 pandemic.  d.  I currently pay myself 10% of income from job(s) and non-registered accounts to my TFSA.  The TFSA income is staying within the account.  I will deviate the 10% to savings account instead of to TFSA if a large expense comes up like a dental appointment. 

Note:  All the dividends and totals below are in Canadian Dollars. 
       
 Non-registered Accounts
  • Enbridge (ENB) - $21.29 (Transfer Agent)
  • Enbridge (ENB) - $243.00 
  • Enerplus (ERF)  -$ 5.58
  • Intertape Polymer Group (ITP) - $10.31
  • Shaw Communications (SJR.B)  - $19.75
Subtotal : $299.93

TFSA
  • A&W Royalties Income Fund (AW.UN) - $6.04
  • Boston Pizza Royalties Income Fund   (BPF.UN) - $24.07
  • Brookfield Renewable Partners (BEP.UN) - $24.69
  • Canadian National Railway (CNR) - $21.85
  • Cominar REIT (CUF.UN) - $13.32
  • Enbridge (ENB) - $26.73
  • Killam Properties REIT (KMP.UN) - $16.61
Subtotal: $133.31

Total = $433.24

 I received a total of $433.24 in dividend income for the month of March 2020.  This represents a 2.15% decrease from 3 months ago and 12.5% decrease year over year.  

 The decrease from 3 months ago is less than 3%.  Boston Pizza Royalties Income Fund announced a distribution decrease from $0.115 per unit monthly to $0.102 per unit. Cineplex did not pay a dividend in March and won't going forward as it is in the process of trying to satifsy conditions in regards to being sold to Cineworld for $34 per share.  The deal has not been finalized yet but has shareholder approval from both companies.  

 I received dividend / distribution income from 10 different companies.   

  I received $0.00 in option premiums within my investment accounts in March 2020.

Below is a visual of my dividend totals for the last 5 years.  




I will update my dividend income tab with the new amount.  I will include my option premium income also.  It is great to see money from passive income sources deposited into my brokerage account every single month.

How was your dividend income for March 2020?

Disclosure : Long all mentioned securities

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.


Saturday, April 4, 2020

Portfolio Update : March 2020

The month of March 2020 now behind us. Some major things have happened in the world, which affect the markets in some way.

The carbon tax in Canadian provinces that have a carbon tax instead of a cap and trade system increase from $20 to $30 per tonne on April 1. This represents an increase of 50%. Due to the COVID19 pandemic getting worse by the day, the price of gas has dropped significantly as businesses across Canada have ground to a halt.

The price of WTI oil fell to below $20 dollars a barrel during the past several days. This also caused Western Canada Select oil to fall below $5.00 per barrel. Western Canada Select (WCS) is basically the oil from the Oil Sands in Alberta. Of course, this has led to massive layoffs in the oil patch in Canada. Low oil prices, along with the COVID19 pandemic, is a double whammy for Canadian economy. 

Countries around the world have had their economies turned upside down. In my honest opinion, we are in a recession currently. I believe if the pandemic continues on, we will be in a depression.

On a positive note, some companies have stepped up. 3M have stepped up production of masks for people on the front lines and for the general population. Grocery store workers are working in their stores as their management have stepped up with safety measures such as plexiglass at the cash register and security guards to help maintain physical distancing. Truckers have continued to work as we need truckers to bring food and other supplies to all regions.

In the news later, truckers have been having problems with rest areas in Canada and the United States to use rest rooms. Fast food places have closed to non drive-thru traffic for the most part. Tim Hortons have stepped up in recent days by opening their dining rooms and restrooms to truckers near major highways. Truckers have had a bad rap over the years, so I believe they should get more respect by the general public now.

Portfolio Activity

Margin Account Activity

On March 10, I averaged down in Enerplus (ERF.TO). I purchased 170 shares of Enerplus at $2.93 per share for a total cost of $503.30 including commissions. Enerplus pays a monthly dividend of $0.01 per share, or $0.12 per share annually. This purchase adds $20.40 to my annual dividend income. The yield on cost for this purchase is 4.05%.

Enerplus, is an oil and gas producer with assets in both Canada and the United States. It has been increasing their production in the United States, while at the same time decreasing their production in Canada the last several years. This is due to low oil prices and a more advantageous regulatory environment.

Cineplex (CGX.TO) is currently in the process of being taken over by Cineworld, which is based out the UK. Recently, Cineplex has closed their theatres due to the pandemic. This was done prior to governments bringing in stricter and stricter recommendations for people to stay own. On March 30, Cineplex informed the public that their theatres are other entertainment venues will remained closed indefinitely due to the COVID19 pandemic. Cineplex has put out a press release to update shareholders of the status of the Cineworld deal.

A UK based fund wants the Canadian federal government to stop the deal in its tracks due to the fiscal state of both Cineplex and Cineworld in this pandemic. Currently, Cineplex is trading at $10.88 per share. The sale is suppose to be $34.00 per share and Cineplex was trading at around $23 per share at time of the announcement of the proposed sale.

TFSA Activity

There has been no buys or sells in this account. I have not taken any money out of this account in several months.

Telus shares (T.TO) has split their shares 2 to 1. This means that for every share of T.TO that I owned, I would get 2 shares. So, I now own 48 shares of T.TO. With a 2:1 stock split, the share price gets cut in half and so does the dividend rate. My annual dividend income from Telus remains the same.

Shares Purchased Via DRIP

3 unit of BPF.UN @ $6.86826 for a total cost of $20.60 (TFSA)
1 unit of CUF.UN @ $11.1935 for a total cost of $11.19 (TFSA)
2 shares of ERF.TO @ $2.7735 for a total cost of $5.55 (Margin Account)

Currently, Boston Pizza Royalties Income Fund pays a monthly distribution of $0.102 per unit, or $1.224 per unit annually. However, the distribution has been suspended going forward as their restaurants have been closed except take-out or delivery. I own 239 units of BPF.UN. So, this suspension reduced my annual dividend income by $292.54.

Cominar REIT pays a monthly distribution of $0.06 per unit per month, or $0.72 per unit annually. This DRIP adds $0.72 to my annual dividend income. The yield on cost for the DRIP unit is 6.43%.

Enerplus pays a monthly dividend of $0.01 per share monthly, or $0.12 per share annually. This drip adds $0.24 to my annual dividend income. The yield on cost for this DRIP is 4.32%.

Enbridge, has suspended their DRIP program over a year ago. So, I receive a check in the mail for my Enbridge shares held directly with the transfer agent. If the DRIP program is re-instated, then my shares will DRIP automatically without any action on my part.

I have some other positions with the DRIP turned on, but might not have enough of a dividend to purchase a whole share.

Please note that if some brokerages DRIP shares when there is no DRIP program by the actual company. This DRIP is when the brokerage buys the shares directly off the public market stock exchanges.

Dividend Increases

There has been no dividend increases in March 2020.


Dividend Decreases

Cineplex has announced they will stop paying a dividend after the payment on February 28. This is due to the potential sale of Cineplex to Cineworld at $34 per share. This deal has the approval of both sets of shareholders and is subject to regulatory approval. Cineplex has closed all their theatres and entertainment venues due to the ongoing COVID19 pandemic. So, this cut is to be expected. I owned 160 shares of Cineplex. This cut reduces my annual dividend income of $288.00 per share.

A&W Royalties Income Fund announced on April 1, 2020, the suspension of the monthly distribution. In most provinces and states, their restaurants have been closed for in restaurant dining. Eventually, the doors are locked in most places and only service is the drive-thru. A&W paid a monthly distribution of $0.159 per unit. I owned 38 units of $AW.UN, so this suspension reduces my annual dividend income by $72.50.

Boston Pizza Royalties Income Fund pays a monthly distribution of $0.102 per unit, or $1.224 per unit annually. However, the distribution has been suspended going forward as their restaurants have been closed except take-out or delivery. I own 239 units of BPF.UN. So, this suspension reduced my annual dividend income by $292.54.

On my twitter account, I have stated I received 5 cuts or suspensions, so far. The fourth position that was cut or suspended in Mullen Group, which is a position that I am trading in my trading account. The fifth cut was Inter Pipeline (IPL.TO) is a position in Savings. Inter Pipeline reduced their dividend by 72% from $14.25 per share monthly to $0.04 per share monthly.

Summary:

As of April 4, 2020 , the total value of the portfolio is $95436.21. This is a 23% decrease over last month's total. This decrease is a result of the market sell off over the past couple of months.

The dividend decreases reduced my annual dividend income by $653.04.

The portfolio is estimated to produce an estimated $5145.90 in dividend income over the next 12 months. This is an decrease of $603.67 CAD , or 10.5%. Some of the dividends in the Canadian stocks section are paid in US dollars, which are converted to Canadian dollars.

Disclosure: Long all aforementioned stocks

Please Note: Positions in Restaurant Brands International (QSR.TO) and Intertape Polymer Group (ITP.TO) pay dividends in US dollars. Brookfield Renewables Partners (BEP.UN) pays distributions in US dollars. My investment tab spreadsheet displays the Canadian dollar equivalent within 15 to 20 minutes of real time. 

We have to believe this pandemic will end and we will get through this.  Everyone must do their part, although it is hard when businesses are told to close their doors.  

Did the pandemic change how you will live going forward regarding finances?

EDIT: April 4 @ 8:06pm MST   The value of the portfolio was updated to the correct amount.  I realized I forgot to substract the cash portion of trading and savings sections I have within my margin account.  The corresponding decrease percentage is updated as well. 

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice. Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Saturday, March 28, 2020

Net Worth Update - March 28 2020

Today is March 28, 2020.  Although passive income through dividends and option premiums is my focus when it comes to investing, I decide to do a post about my current net worth.

What is net worth? Simply put, net worth is calculated by adding up all assets and subtracting the total of all liabilities.  Net worth is sometimes referred to as shareholder's equity.  Assets and liabilities are part of the balance sheet. 

Assets

Savings

The savings section is broken into 3 segments. This is a taxable high interest savings account, a TFSA savings accounts and combination stock investment and ETF investment.  The TFSA savings account has been removed due to low interest rate after the decrease in the interest rate by the Bank of Canada.  Bank of Canada is basically Canada's version of the federal reserve.

The taxable high interest savings acount, in which the interest rate is laughable, was with Tangerine.  It currently at 0.4%, which is down from 1.1% from 3 months ago.  I switched to EQ Bank due to it having a 2.45% interest on their savings account.  

The TFSA savings account was also with Tangerine.  I was frustrated with getting such a low interest rate with Tangerine.  I took the money out and placed it in non-registered high interest rate savings account with EQ Bank.  

So, I have 1 savings account now instead of the 2 accounts I had before.  On March 28, 2020, the value of the savings account is $1731.58.  After the fall in interest rates to help combat the COVID 19 pandemic and fall of oil prices, the bank of Canada had to reduce interest rates by enacting emergency rate cuts.  EQ Bank lowered their interest rate from 2.45% to 2.00%.  We just had another interest rate cut by the bank of Canada this past week.  I suspect EQ Bank may reduce their interest rate in the very near future. 

The stock and ETF investment involves a stock and an ETF that I hold within my margin account.  I keep the dividends and distributions received separate from the dividends I post in my dividend income updates.  

The stock is Inter Pipeline.  The ticker symbol is IPL and trades on the Toronto Stock Exchange.  I own 42 shares with an adjusted cost base of $901.80.  The cash not including dividends is $10.36.  I received a total of $59.90 in dividends since starting this position.  

I purchased 15 shares of BMO High Yield Covered Call ETF at a cost of $212.42.  The ticker symbol is ZWC and trades on the Toronto Stock Exchange.  My brokerage has zero commissions on purchase of ETFs.  There is a small ECN fee which is a few pennies.  I believe for the purchase of these units it was like $0.03 total.  This ETF pays monthly. This ETF traded ex-dividend on March 27, and I will receive my first distribution in early April. 


On March 28 , the current value of this "stock / ETF account" is $567.83.  I have not added any money to this account.

Overall, the savings total is $2299.41.

Non-registered Accounts

The non-registered accounts consist of a margin account and 2 stocks held directly with the transfer agents.  The margin account is with Questrade.  The total value is $65470.04 as of March 28, 2020.

TFSA Investing Account

The TFSA investing account balance is $29040.53 as of March 28, 2020.  This account is with Questrade.

Trading Account

The trading account is with Questrade.  This is done within my margin account.  I keep track of the balance, market value and cost basis of the trades. I currently have a trade on in Mullen Group. The ticker symbol is MTL and trades on the Toronto Stock Exchange.  Mullen Group is a group of trucking companies which consist of approximately 70% conventional trucking and 30% oilfield trucking.  The stock has fallen by almost $5.00 due to the fallout over the COVID-19  pandemic and the fall of oil prices.  I did not set a stop as I was trying to sell covered calls.  As of March 28, the value of this account is $1787.23.

RRSP

My RRSP is with Tangerine.  This is in the process of getting transferred.  I held their funds for a while and eventually sold the funds.  Therefore, the RRSP is basically in a savings account.  On March 28, the balance is $12027.92.  The interest on this account is 0.40%, which is down from 1.1% interest rate from 3 months ago.  

Regardless of  the double whammy of the COVID-19 pandemic and the fall of oil prices, I decided to switch this account.  I submitted the paperwork to transfer the RRSP to Questrade.  This will enable to purchase investments that would possibly generate better return.  

Summary of Assets

Total Savings :  $2299.41  
Non-Registered accounts : $65470.04
TFSA Investing :  $29040.53
Trading Account: $1787.23
RRSP Savings Account:  $12027.92

Total Assets = $110625.13 (decrease of 25.5% from 3 months ago)

Liabilities

The balance on my line of credit is $5126.54.  This is a decrease of $1373.46, or  from 3 months ago. Since I rent and do not have collateral, the interest rate on this account is 5.66%.  This interest rate is down from the 7.16% interest rate from 3 months ago.  The Bank of Canada has decreased rates a few times over the last 3 months, which caused the big Banks to reduce their prime rates with each interest rate reduction.  I get charge an insurance fee when carrying a balance.  This insurance fee depends on the balance, therefore it changes every month.  

Conclusion

On March 28, 2020, my net worth is $105498.59.  This is a decrease of $36437.32, or  25.7%, from 3 months ago.  

A large part of this decrease is due to the economic fallout over low oil prices and the COVID-19 worldwide pandemic.  

To read my last net worth update, click here.  

Disclosure:  Long IPL, ZWC 

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Saturday, March 14, 2020

Recent Buy

During the few stocks the stock markets have made huge swings in both directions across the entire world. From the oil price ware between brought on by Russia and Saudi Arabia to the World Health Organization has declared the Coronavirus a pandemic.

The Cononavirus has caused many countries to take drastic measures including banning incoming flights from hot zones. Sections of different countries are taking drastic measures from cancelling schools, banning social events of all types over a certain amount of people and governments announcing shutting down for weeks. Major sporting leagues such as NHL, NBA, WHL, AHL and MLB have suspended their seasons to protect the health of their players and fans.

Recently, Canada has another major issue to deal with major rail blockades that were setup causing shutting down major rail routes across Canada. This causes shortages of all different things from propane to consumer goods. The federal minister of Crown-Ingenious Relations and the British Columbia minster of Indian Affairs met with the hereditary chiefs of the Wetʼsuwetʼen first nation in Northeastern BC.

Individual companies have changed out they do things such has limiting interactions with their customers or clients to help prevent the spread of the virus.

I never saw people panic like this over a virus.

Recent Buy

Almost all my positions are now in negative territory. Anyone who has bought investments in the last several years have lost money. Best thing to do is not sell and ride it out.

I had some money I could put to work in my margin account. It was not much, but I felt I could make a position of average down a position.

I have owned Enerplus for several years. This company has fell out of favor with investors the last few years due to the major oil crash that started in 2015. Enerplus is an energy producer headquartered in Canada. Enerplus has increased their activity in the United States due to a better environment to be in the oil and gas business. Enerplus has reduced their activity in Canada due , in part, to regulations and other things making it difficult to conduct business and make a profit.

I owned 558 shares of Enerplus at the time of the purchase. The company had to reduce its dividend due to low oil prices and switching form an income trust to a corporation in Canada in 2011.

On March 10, my limit order was filled to purchase 170 shares of ERF.TO at $2.93 per share for a total cost of $503.30 including commissions. I now own 728 shares of Enerplus Corporation.

Enerplus pays a monthly dividend of $0.01 CAD per share. This purchase adds $20.40 CAD to my annual dividend income. The yield on cost for this purchase is 4.05%.

I have had the DRIP turned on for a few years but the wasn't enough to purchase a whole share. With the stock falling in price, I will see drip shares start to appear in my account in the next few days.

Conclusion

Would I had purchase shares if I had not have owned shares already? I would of definitely would of put my money elsewhere as their are lots of good opportunities in the markets at this time.

This purchase reduced my average cost base per share by over $4.00.

This stock was recently featured on BNN's market call a month ago, which you can watch here.

I am down a lot on the stock, so I will continue to hold for now.

I will update my investment tab spreadsheet in early April to reflect this purchase.

Disclosure: Long ERF

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Tuesday, March 10, 2020

Recent Buy

   What a crazy couple of weeks in the capital markets!  That last few days have been super crazy.  The markets fell over 10% which mean we are dealing with a market correction.  The situation could get worse before it gets better.  A couple of major factors that lead to these markets tumbling this week are the impacts of the coronavirus coupled with Russia and Saudi Arabia flooding the market with low priced crude oil.

Canada is a high cost producer of crude oil due to the oil being very low in the ground due to mountain range of western Alberta east of Edmonton.  Canada also has the oil sands in the northern part of Alberta.  The mining for oil located in the oil sands has very high cost and it is often said that $70 WTI price crude oil is needed to make it viable.

During this week, the Bank of Canada reduced it over night prime rate by 50bps or 0.50%.  This means will cost less to borrow money and the interest rates on savings will be decrease.

Markets go up and markets go down.  It is difficult to time the market.

Purchase

On May 10, I made 2 purchases.  I will talk about one of those purchases in this post.

Besides my positions for this blog, I have a few positions in savings.  I also have a regular high interest savings account as well.

Prior to today, I had one position in this account with some cash.  That position is 42 shares of Inter Pipeline (IPL.TO).  I kept the cash from the dividends in the account and added some extra cash in the account.  I had a total of $135.92 in cash in this account.  

My brokerage has commission free ETFs when purchasing units of ETFs.

With the $135.92 in cash, I purchased 9 units of BMO Canadian High Dividend Covered Call ETF.  The ticker symbol is ZWC.TO.  I purchased the 9 units at $15.25 for a total cost $137.28, which included ECN fees of $0.03.   This ETF is an ETF that is owned by Bank of Montreal which is a bank that I am a shareholder.  The yield on cost for this position is


BMO Canadian High Dividend Covered Call ETF has been designed to provide exposure to a dividend focused portfolio, while earning call option premiums. The underlying portfolio is yield-weighted and broadly diversified across sectors. The ETF screens for securities for dividend growth, sustainability and option liquidity. The ETF also dynamically writes covered call options. The call options are written out of the money and selected based on analyzing the option's available premium. The option premium provides limited downside protection. Source BMO


This ETF currently has 73 holdings, which you can discover by clicking here.

 The BMO Canadian High Dividend Covered Call ETF currently pays a monthly distribution of $0.11 per unit.  This position will pay me $0.99 per month in distributions .  The yield on cost basis is 8.65%.

With this purchase, there is a cash balance of -$1.36.  This cash balance will be in positive territory as Inter Pipeline will pay a dividend on March 16, 2020.

Summary:

This savings account in which I keep these 2 positions and cash is held within my margin account.  These positions are not reflected in my investing tab spreadsheet link above and are not mentioned in portfolio updates.  However, this savings account will be mentioned in future net worth posts under the savings section.

This position adds an extra $0.99 per month of income to this account.  The total income per month generated by this account is expected to be $6.98.

The distribution may be reduced in the coming months for this ETF due to the large reduction in prices of its various holdings and the difficult selling covered calls due to this deduction.

This is a 3 month chart of ZWC which includes today price action.

Click to Enlarge

I will purchase more units of ZWC if cash is available and at a good price.

Note:   This position will not be included in my portfolio updates or investing tab spreadsheet.  However, this position will be included in net worth updates.

Disclosure:  Long BMO, IPL, ZWC

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.