In early December I decided to take money I received from Christmas and the distributions that I received so far from Dream REIT trade in my margin account and put it in a dividend growth stock. This stock that I have chosen is very safe to own and has paid dividend for a very long time.
On December 31, I purchased 18.090543 shares of BNS at a cost of $66.33 per share. This purchase is directly through their transfer agent, so for there is no commissions. This is the old way to buy stocks. I have no control over the price I will pay for these shares. I had to have my funds in early in the month. I currently have full drip on this stock. There was a discount of 2% of shares purchased with reinvested dividends, but was cancelled during the last year.
During the recent financial crisis, Bank of Nova Scotia did not reduce its dividend and kept it the same during 2009 and 2010. This company has paid dividends since its inception in 1832. In 2005, Bank of Nova Scotia annual dividend rate was $1.32 and has increased to $2.56 per share in 2014. That is a CAGR of 7.637 % over the last 10 years.
The dividend was raised twice over the last year. So the current annual dividend rate is $2.64 per share. This recent purchase adds $47.76 to my annual dividend income.
Note: My shares of BNS were purchased in Canada.
Do you own shares in Bank of Nova Scotia?
I will update my investing account tab spreadsheet in a few days to reflect this recent purchase.
Disclosure : Long BNS
Wednesday, December 31, 2014
Friday, December 26, 2014
Recent Sale
I recently wrote about a purchase of Boston Pizza Royalties Income Fund (BPF.UN) in my margin account. I also own 234 units in my Tax Free Savings account that I have owned since March 2010.
This fund pays a distribution monthly at the end of the month. In Canada, the rules for income trust were changed in 2011, after the announcement on Halloween 2006 by the finance minister at the time, Jim Flaherty. Companies that would remain as an income trust would have to pay a SIFT tax. The SIFT Tax stands for the Specified Investment Flow Through tax. You can read more about the SIFT Tax here. With income trust having to pay this tax, it meant it has less profits to pay out to unit holders. This was the reason why the distribution was reduced a few years ago. A lot of companies switched back to a corporation setup prior to this tax coming into effect.
My limit order of $21.55 was recently filled on Dec 22,2014. I also will collect the distribution payment at the end of the month in the amount $20.40 for the 200 units that I held .
Initial Purchase with commissions: 200 *21.23 + $4.95 = $4250.95
Distribution received = $20.40
Proceeds of Sale = $21.55*200 -$4.95=$4305.05
Profit =$4305.05-4250.95+20.40
= $74.50
Total Return on Investment = $74.50/$4250.95
= 1.753 %
Disclosure: Long BPF.UN inside TFSA still
DISCLAIMER
This fund pays a distribution monthly at the end of the month. In Canada, the rules for income trust were changed in 2011, after the announcement on Halloween 2006 by the finance minister at the time, Jim Flaherty. Companies that would remain as an income trust would have to pay a SIFT tax. The SIFT Tax stands for the Specified Investment Flow Through tax. You can read more about the SIFT Tax here. With income trust having to pay this tax, it meant it has less profits to pay out to unit holders. This was the reason why the distribution was reduced a few years ago. A lot of companies switched back to a corporation setup prior to this tax coming into effect.
My limit order of $21.55 was recently filled on Dec 22,2014. I also will collect the distribution payment at the end of the month in the amount $20.40 for the 200 units that I held .
Initial Purchase with commissions: 200 *21.23 + $4.95 = $4250.95
Distribution received = $20.40
Proceeds of Sale = $21.55*200 -$4.95=$4305.05
Profit =$4305.05-4250.95+20.40
= $74.50
Total Return on Investment = $74.50/$4250.95
= 1.753 %
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| Click to Enlarge |
Disclosure: Long BPF.UN inside TFSA still
DISCLAIMER
Sunday, December 21, 2014
Recent Trade
On October 8, my limit order that I had placed on Sherritt International Corp was filled at $2.42 a share for 1500 shares. I never got around to writing a post on it.
Sherritt is a world leader in the mining and refining of nickel from lateritic ores with operations in Canada, Cuba and Madagascar. The Corporation is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licenses its proprietary technologies and provides metallurgical services to commercial metals operations worldwide. (Source www.sherritt.com )
As this was a trade, my exit strategy was to place a limit order to sell at $2.70 a share. With the recent announcement by President Barrack Obama that the United States improve relations with Cuba means possibly lower costs for the Sherritt's operations on the island and less restrictions traveling for its directors. This recent announcement by the US president plus the other details such announcing measures to possibly work with congress to the lift the full embargo lead to the huge rise in the share price.
Calculation of Return
Initial Investment with Commissions : 1500 *2.42 +9.95 = 3639.95
Proceeds of Sale : 1500*2.70-9.95 =4040.95
Profit = proceeds of sale - initial investment = 4040.95 -3639.95
= 400.10
Total Return = 400.10/3639.95
= 10.99 %
I am going to use this $400.10 to pay on my line of credit used for investing as the interest is high at 9.5%. The interest was initially around 7.6% but the bank raised it to over 10 %. I called about the increase and got it reduced to 9.5% awhile ago.
Sherritt is a world leader in the mining and refining of nickel from lateritic ores with operations in Canada, Cuba and Madagascar. The Corporation is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licenses its proprietary technologies and provides metallurgical services to commercial metals operations worldwide. (Source www.sherritt.com )
As this was a trade, my exit strategy was to place a limit order to sell at $2.70 a share. With the recent announcement by President Barrack Obama that the United States improve relations with Cuba means possibly lower costs for the Sherritt's operations on the island and less restrictions traveling for its directors. This recent announcement by the US president plus the other details such announcing measures to possibly work with congress to the lift the full embargo lead to the huge rise in the share price.
Calculation of Return
Initial Investment with Commissions : 1500 *2.42 +9.95 = 3639.95
Proceeds of Sale : 1500*2.70-9.95 =4040.95
Profit = proceeds of sale - initial investment = 4040.95 -3639.95
= 400.10
Total Return = 400.10/3639.95
= 10.99 %
I am going to use this $400.10 to pay on my line of credit used for investing as the interest is high at 9.5%. The interest was initially around 7.6% but the bank raised it to over 10 %. I called about the increase and got it reduced to 9.5% awhile ago.
YouTube
I came across this video on your tube, I Fought the Fed, by Hit the Bid. The person singing has been on YouTube for years and some entertaining about the markets.
This guy is not Jason Fieber, aka Dividend Mantra, although he might look like him a bit.
DISCLAIMER
This guy is not Jason Fieber, aka Dividend Mantra, although he might look like him a bit.
DISCLAIMER
Saturday, December 13, 2014
Recent Buy
During the recent fall in the market, I was tempted to add to my energy positions but did not pull the trigger. Enerplus has fallen more than I would like so I decided not to average down at this time. Enerplus is a energy producer that operates in Canada and the United States. As the price of a barrel of crude continues to fall, the stock will remain low for the foreseeable future.
On Dec 1, Enbridge paid a dividend. I hold this stock in 2 accounts. The small position is directly with the transfer agent. I have a full drip on which allows for partial shares. So I averaged in with the recent dividend payment. Investing with the transfer agent, there are specific rules to follow for each company. The last time I bought shares, the rules say to have the money in by the 15th of the month prior to the month they pay the dividend. When the shares are actually purchased, it will be at the end of the month, these new shares are not eligible for the dividend as the shares are purchased after the ex-dividend date. The other account that I own 33 shares of Enbridge is a TFSA account, so the dividends are tax free.
I purchased 200 units of Boston Pizza Royalties Income Fund at $21.23 per share in my margin account on December 8. Boston Pizza Royalties Income Fund works as follows.
With the only expenses of the royalty fund is adminstrative expenses to run the fund, the fund is able to pay out all of its profits or close to 100% of its profits. As the price of oil continues to drop, I feel confident in continuing to hold this position going forward.
This purchase adds $244.80 to my annual dividend income. I will add the recent purchase to my investment account tab above in early January.
Disclosure: Long BPF-UN
Photo Credit: www.bostonpizza.com
DISCLAIMER
On Dec 1, Enbridge paid a dividend. I hold this stock in 2 accounts. The small position is directly with the transfer agent. I have a full drip on which allows for partial shares. So I averaged in with the recent dividend payment. Investing with the transfer agent, there are specific rules to follow for each company. The last time I bought shares, the rules say to have the money in by the 15th of the month prior to the month they pay the dividend. When the shares are actually purchased, it will be at the end of the month, these new shares are not eligible for the dividend as the shares are purchased after the ex-dividend date. The other account that I own 33 shares of Enbridge is a TFSA account, so the dividends are tax free.
I purchased 200 units of Boston Pizza Royalties Income Fund at $21.23 per share in my margin account on December 8. Boston Pizza Royalties Income Fund works as follows.
"A key feature of the Fund is that it is a “top line” structure, in which
BPI pays the Fund a royalty equal to 4% of Franchise Sales from
restaurants in the Fund’s royalty pool. Accordingly, Fund unitholders
are not directly exposed to changes in the operating costs or
profitability of BPI or of individual Boston Pizza restaurants. Given
this structure, and that the Fund has no current mandate to retain
capital for other purposes, it is expected that the Fund will maintain a
Payout Ratio close to 100% over time as the trustees of the Fund
continue to distribute all available cash in order to maximize returns
to unitholders." - Earnings Release 11-07-14.
Please note that franchise Sales exclude revenue from the sales of liquor, beer, wine and approved national promotions and discounts.
Boston Pizza International is consists of casual dining restaurants that are operated by franchisees. The owners of Boston Pizza International are George Melville and Jim Treliving and they own 50% each. Jim Treliving is also a dragon on Dragon's Den since the show started. Dragon's Den is Canadian based. The United States version of Dragon's Den is Shark Tank.
On January 1 of each year, the new restaurants started during the previous year are added the the royalty pool. When you walk into the front doors of the restaurants, you can go through one of 2 doors. One door leads to the lounge, which is a sports bar, that has lots of big screen TVs and sometimes pool tables. The other door is the restaurant section. All the food of the restaurant section can also be ordered and eaten in the lounge part.
Right now the fund is buying back units in large amounts so has not been an increase in its distribution payment in a while.
I also own this fund in my Tax Free savings account since 2010. Their distribution was lowered in January 2011, as the Canadian tax laws were changed regarding income trusts. The fund decided to remain an income fund instead of converting to a corporation, so there profits are taxed with what is called the SIFT tax. SIFT stands for Specified Investment Flow-Through tax. The reduction in the distribution was approximately equal to the amount of tax they had to now pay. Boston Pizza Royalties Income Fund has raised their distribution since then.
A few highlights from the recent quarter are as follows:
- Franchise sales of restaurants in the royalty pool were 201.4 million in Q3 and 584.4 million YTD in 2014 compared to 191.5 million and 571.1 million in the same periods, respectively, in 2013
- Same store sales growth, SSSG, was 3.1 % in Q3 of 2014 and 0.5% YTD compared to 0.8% and 2.5% for the same periods, respectively, in 2013
- On a franchise sales basis, SSSG was 3.0% in Q3 of 2014 and 0.1% YTD, compared to 0.8% and 2.7% for the same period, respectively, in 2013.
With the only expenses of the royalty fund is adminstrative expenses to run the fund, the fund is able to pay out all of its profits or close to 100% of its profits. As the price of oil continues to drop, I feel confident in continuing to hold this position going forward.
This purchase adds $244.80 to my annual dividend income. I will add the recent purchase to my investment account tab above in early January.
Disclosure: Long BPF-UN
Photo Credit: www.bostonpizza.com
DISCLAIMER
Saturday, December 6, 2014
Recent Dividend Increase
On Dec 1, Enbridge paid out its last dividend under the old annual rate on December 1. On Dec 3rd, Enbridge announced that the annual dividend will be increased by 33% with the first quarterly payment on March 1, 2015. Enbridge has now raised their dividend 20 consecutive years which includes during the recent recession.
Formula
Formula for CAGR = (Ending Value / Beginning Value) ^(1/N) -1 where N is the number of periods.
The dividend rate was $0.415 per share in 2003 and, with the recent increase to $0.1862 for 2015 which represents a CAGR of 13.33% over the past 12 years. In 2005, the dividend rate was $0.52 per share which represents a CAGR of 13.61% over the past 10 years. In 2010, the dividend rate was $0.8500 which represents a CAGR of 16.98% over the past 5 years.
Why the Increase?
Enbridge has embarked on a 17 billion dollar restructuring plan. They plan on "Drop Down" its Canadian Oil Pipeline business that included its mainland pipeline system and the oil sands network. These assets will go into Enbridge Income Fund when all is said and done. Initially, this will go into a private company that Enbridge controls, in which Enbridge Income Fund will buys these assets from the private company. Enbridge then receives the money from the private company which they control. By doing this, Enbridge will lower costs and will not have to issue new shares or as many new shares to fund future projects. Enbridge might do the same thing with their US assets and Enbridge Energy Partners.
Enbridge plans to grow its dividend in 2016 to 2018 by an average of 15% per year.
This 33 % increase will increase by annual dividend income by $18.49. I will take the 33% as an early Christmas gift.
Disclosure: Long ENB
DISCLAIMER
 | |
| Enbridge's Dividend Rate from 2003- 2015 |
Formula
Formula for CAGR = (Ending Value / Beginning Value) ^(1/N) -1 where N is the number of periods.
The dividend rate was $0.415 per share in 2003 and, with the recent increase to $0.1862 for 2015 which represents a CAGR of 13.33% over the past 12 years. In 2005, the dividend rate was $0.52 per share which represents a CAGR of 13.61% over the past 10 years. In 2010, the dividend rate was $0.8500 which represents a CAGR of 16.98% over the past 5 years.
Why the Increase?
Enbridge has embarked on a 17 billion dollar restructuring plan. They plan on "Drop Down" its Canadian Oil Pipeline business that included its mainland pipeline system and the oil sands network. These assets will go into Enbridge Income Fund when all is said and done. Initially, this will go into a private company that Enbridge controls, in which Enbridge Income Fund will buys these assets from the private company. Enbridge then receives the money from the private company which they control. By doing this, Enbridge will lower costs and will not have to issue new shares or as many new shares to fund future projects. Enbridge might do the same thing with their US assets and Enbridge Energy Partners.
Enbridge plans to grow its dividend in 2016 to 2018 by an average of 15% per year.
This 33 % increase will increase by annual dividend income by $18.49. I will take the 33% as an early Christmas gift.
Disclosure: Long ENB
DISCLAIMER
Wednesday, December 3, 2014
Dividend Update - Nov 2014
The month of November 2014 is another month of dividend income landing in my accounts. This money is used to help pay my expenses if it is needed. If the money is not needed, it is ALL used to purchase new investments to further increase my cash flow.
The month of November was another roller coaster in the financial markets as the price of a barrel of crude continues to drop. With investors waiting for the outcome of the OPEC meeting towards the end of October, the prices of stocks in the energy sector continued to fall. OPEC decided to not cut production even though we are producing 2 million extra barrels a day. With the increase supply and less demand, the price of a barrel of crude oil is likely to float between $55 and $75 a barrel.
Non-registered Account
- Emera (EMA) - $38.75
- Killam Properties (KMP) - $5.75
- Shaw Communications (SJR.B) - $18.33
- Enerplus (ERF) -$ 45.63
- Killam Properties (KMP) - $ 14.30
- Dundee REIT (D.UN) - $ 16.61
- Cominar REIT (C.UN) - $5.39
- Boston Pizza Royalties Fund (BPF.UN) - $23.87
- Claymore 1-5 yr Laddered Corporate Bond ETF (CBO) - $0.92
This total represents a 2.219% increase from 3 months ago and 16.49% decrease year over year. The increase over 3 months is due to my recent position in iShares Corporate Laddered Bond ETF, CBO, and an dividend increase. One of my positions, TD, paid a dividend this month but my purchase came after the ex-dividend date.
I also received another distribution payment of $56.00 for my swing trade in Dundee REIT in my non-registered account. This is not listed above since it is a trade, so I keep the money in the account and do not pay myself first with this payment. I have received $931.47 in distributions so far on this trade.
I will update my dividend income tab with the new amount. It is great to see money from passive income sources deposited into my brokerage account every single month.
Disclosure : Long all securities above.
Photo Credit: www.mipaq,co.za
DISCLAIMER
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