I was looking to put some cash to work in my margin account. I put in a limit order to purchase Restaurant Brands International, ticker symbol QSR,on the Toronto Stock Exchange. I recently owned this stock and recently sold this position, which you can read about here.
Why purchase it again after just recently selling it? Well Restaurant Brands International consists of Tim Hortons and Burger King. Tim Hortons is the dominant coffee shop in Canada and people gravitate towards it as the coffee is cheaper than their competitors. With the price of the coffee cheaper, it also is not as good tasting as their main competitors McDonald's and Starbucks. I have owned Tim Hortons in the past before they were bought by Burger King. I made a large capital gain on my investment. Every time I go to a Tim Horton's there are usually lineups.
The stock was trading in between $49.00 and slightly over $50.00 a share recently. I decided to place a limit order of $48.00 per share initially. Over a span of a few days, I moved the limit up to $48.50 a share.
On 26 May 2015, I purchased 50 shares at $48.50 for a total cost of $2430.12 including commissions. This purchase price is $0.35 lower than my previous entry price.
The annual dividend appears to be $0.40 a share, as the company recently declared a quarterly dividend of $0.10 per share to be paid on July 3. This recent purchase adds $20.00 to my annual dividend income.
Today, I ate at both Burger King and Tim Hortons, so I contributed to the revenue of the company two times. I will continue to follow QSR closely, as the company still has a lot of debt on its balance sheet.
Disclosure: Long QSR
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, May 30, 2015
Tuesday, May 26, 2015
Recent Trade
During the past week, as I am trying to increase my cash position inside my TFSA, I did another option trade. The first option trade involved buying a call option of Canadian National Railway (CNR) in Canada. You can read about the outcome of this trade here. My latest option trade inside my TFSA involved Canadian National Railway (CNR) also. As they continued to be some weakness still in this stock , I again wanted to take advantage of this is a way that would be best fitting for the giving cash balance.
On May 20, I BOUGHT two call option contacts for a premium of $1.55 per contract for a Jun 19, 2015 expiration date and $74.00 strike price. On May 25, there was some positive momentum in the stock price, so I placed a limit order to close out the trade. I didn't want to get to greedy and took a small profit. The trade closed with a $1.72 per contract.
Summary:
Initial Investment = 2 *1.55*100 + $11.95
= $321.95
Proceeds of Sale = 2*1.72*100-$11.95
= $332.05
Profit = $10.10
Return on Investment = $10.10/$321.95*100%
= 3.137%
The profit of $10.10 is not that much when you first think about it. But if I was to get $10.10 in interest from my savings account, I would need a huge balance.
Current Interest rate = 1.05%
Number of days = 5
Balance = $10.10/(.0105/365 * 5)
= $70219
Please note, I still own 25 shares of CNR that I recently purchased. I am keeping an eye on this stock for now as I like the prospects of this company going forward and new companies in the railroad subsector face huge barriers to entry.
Disclosure: Long CNR
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.
On May 20, I BOUGHT two call option contacts for a premium of $1.55 per contract for a Jun 19, 2015 expiration date and $74.00 strike price. On May 25, there was some positive momentum in the stock price, so I placed a limit order to close out the trade. I didn't want to get to greedy and took a small profit. The trade closed with a $1.72 per contract.
Summary:
Initial Investment = 2 *1.55*100 + $11.95
= $321.95
Proceeds of Sale = 2*1.72*100-$11.95
= $332.05
Profit = $10.10
Return on Investment = $10.10/$321.95*100%
= 3.137%
The profit of $10.10 is not that much when you first think about it. But if I was to get $10.10 in interest from my savings account, I would need a huge balance.
Current Interest rate = 1.05%
Number of days = 5
Balance = $10.10/(.0105/365 * 5)
= $70219
Please note, I still own 25 shares of CNR that I recently purchased. I am keeping an eye on this stock for now as I like the prospects of this company going forward and new companies in the railroad subsector face huge barriers to entry.
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| Click to Enlarge |
Disclosure: Long CNR
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.
Monday, May 18, 2015
The Dividend Mantra Way - Book Review
Recently, a fellow blogger, Dividend Mantra, published an eBook titled The Dividend Mantra Way. Dividend Mantra, whose real name is Jason Fieber, started on his journey of dividend growth investing to attain financial freedom at 40 years of age. Like most of us, Jason didn't start investing until later in life. His journey his a 12 year journey in which he plans to save as much money as he can and invest it in dividend growth stocks. Currently as of this writing, Jason has a portfolio of over 55 companies that pay dividends or distributions. The companies that pay distributions are REITs, or Real Estate Investment Trusts. The REITs are a small percentage of his portfolio, which he updates on his blog shortly after a new month begins.
I recently purchased Jason's eBook and it was a great read. Jason started the book off about what he has been though in his life. His parents had 4 children before 30 years of age. Jason's life has been anything but easy when he was a young lad. At 8 years old his father left, which lead to him and his older sister forming a strong bond. After his father left, his mother's drug use became more and more as time went by. His mother gave up custody of the 4 children to his mother's sister and husband when Jason was 11 years old.
As time went by, Jason made some choices like blowing approximately $60000 inheritance in less than 2 years and dropping out of college. Jason started working in the auto industry in Michigan, in which he worked his way up to being a service advisor. In 2009, during the great recession , Jason was laid off from his job as the automotive BIG 3 companies where not doing well.
A short time after this, Jason decided he had to make major changes in his life. Jason decided to move to Florida for a variety of reasons. Some of these reasons, which he states in the book and on the blog, include no state income tax in Florida, better weather and a better economy. The warmer weather means Jason could get rid of the car and walk and take the bus to save on transportation costs. Jason found a job in Florida, also in the automotive industry and the same position being a service advisor. This was at a luxury car dealership that paid more money. Jason was now making more money, not paying any state income tax, and had all the benefits of western Florida weather to his advantage. Jason soon after started on his plan by investing. He started off in mutual funds at first, but quickly realized this will not get him to where he wants to be. Jason then discovered dividend growth investing and took action.
In 2011, Jason started his blog www.dividendmantra.com to hold himself accountable and to inspire the change he wants to see. Jason cuts his expenses by moving to a cheaper apartment and closer to the bus line and doing other things more frugally. As time went buy Jason started to be featured on the news, which basically made him a celebrity in the personal finance arena. This drove even more and more traffic to his blog.
In May 2014, Jason decided to resign from his job at the auto dealership to focus on writing more. So Jason did a self-experiment on himself for 3 months, so see if can make a living writing and inspiring people through his words. The 3 months was a success and the rest is history. Jason has now been out of his job for a year and continues to write and inspire people. He makes enough money through his writing and some small other sources of revenue to pay all his monthly expenses and still able to save and invest a lot of money.
The book also talks about some of Jason's most popular and beneficial blog posts such as Live Below Your Means, You Only Live Once (YOLO), and a post about what we can learn from his dog.
My Favorite Section of the Book
My favorite section of the book, was Jason describing in detail how he chooses his stocks and the steps he does in order when deciding if a company is worthy of an investment at the given time. The steps can take a good amount of time, but when it possibly lead to getting a better return on your investment it is all worth it. Why overpay for a company when you do not have to? By being better able to buy a stock below its intrinsic value, you have a large margin of safety.
Conclusion
Jason continues to write on his blog and increased his frequency of freelancing. Jason shows you what it is like in real time pursuing financial independence. He writes about his investments in detail shortly after they occur. His most recent investment was Union Pacific Railroad (UNP). Jason gets lots of comments on every single post on his blog and his answers 99 % of the comments, which he actually enjoys quite of bit interacting with his readers.
You think with the life Jason lived prior to his aunt and uncle becoming his legal guardians, he would be "mad at the world" and "pour me" attitude. Jason is the complete opposite with a great attitude and appreciation for what he has in his life right now. Jason is on pace to make $7200 in passive dividend income this year, which is one of his goals that he stated on his blog. I believe Jason would have been featured on Oprah, if Oprah was still doing talk shows.
I highly recommend checking out his blog and purchasing his book, The Dividend Mantra Way. Jason also started Coaching recently when he published his eBook. Jason's site as a huge following and rightfully so as he pours his heart into his writing.
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.
I recently purchased Jason's eBook and it was a great read. Jason started the book off about what he has been though in his life. His parents had 4 children before 30 years of age. Jason's life has been anything but easy when he was a young lad. At 8 years old his father left, which lead to him and his older sister forming a strong bond. After his father left, his mother's drug use became more and more as time went by. His mother gave up custody of the 4 children to his mother's sister and husband when Jason was 11 years old.
As time went by, Jason made some choices like blowing approximately $60000 inheritance in less than 2 years and dropping out of college. Jason started working in the auto industry in Michigan, in which he worked his way up to being a service advisor. In 2009, during the great recession , Jason was laid off from his job as the automotive BIG 3 companies where not doing well.
A short time after this, Jason decided he had to make major changes in his life. Jason decided to move to Florida for a variety of reasons. Some of these reasons, which he states in the book and on the blog, include no state income tax in Florida, better weather and a better economy. The warmer weather means Jason could get rid of the car and walk and take the bus to save on transportation costs. Jason found a job in Florida, also in the automotive industry and the same position being a service advisor. This was at a luxury car dealership that paid more money. Jason was now making more money, not paying any state income tax, and had all the benefits of western Florida weather to his advantage. Jason soon after started on his plan by investing. He started off in mutual funds at first, but quickly realized this will not get him to where he wants to be. Jason then discovered dividend growth investing and took action.
In 2011, Jason started his blog www.dividendmantra.com to hold himself accountable and to inspire the change he wants to see. Jason cuts his expenses by moving to a cheaper apartment and closer to the bus line and doing other things more frugally. As time went buy Jason started to be featured on the news, which basically made him a celebrity in the personal finance arena. This drove even more and more traffic to his blog.
In May 2014, Jason decided to resign from his job at the auto dealership to focus on writing more. So Jason did a self-experiment on himself for 3 months, so see if can make a living writing and inspiring people through his words. The 3 months was a success and the rest is history. Jason has now been out of his job for a year and continues to write and inspire people. He makes enough money through his writing and some small other sources of revenue to pay all his monthly expenses and still able to save and invest a lot of money.
The book also talks about some of Jason's most popular and beneficial blog posts such as Live Below Your Means, You Only Live Once (YOLO), and a post about what we can learn from his dog.
My Favorite Section of the Book
My favorite section of the book, was Jason describing in detail how he chooses his stocks and the steps he does in order when deciding if a company is worthy of an investment at the given time. The steps can take a good amount of time, but when it possibly lead to getting a better return on your investment it is all worth it. Why overpay for a company when you do not have to? By being better able to buy a stock below its intrinsic value, you have a large margin of safety.
Conclusion
Jason continues to write on his blog and increased his frequency of freelancing. Jason shows you what it is like in real time pursuing financial independence. He writes about his investments in detail shortly after they occur. His most recent investment was Union Pacific Railroad (UNP). Jason gets lots of comments on every single post on his blog and his answers 99 % of the comments, which he actually enjoys quite of bit interacting with his readers.
You think with the life Jason lived prior to his aunt and uncle becoming his legal guardians, he would be "mad at the world" and "pour me" attitude. Jason is the complete opposite with a great attitude and appreciation for what he has in his life right now. Jason is on pace to make $7200 in passive dividend income this year, which is one of his goals that he stated on his blog. I believe Jason would have been featured on Oprah, if Oprah was still doing talk shows.
I highly recommend checking out his blog and purchasing his book, The Dividend Mantra Way. Jason also started Coaching recently when he published his eBook. Jason's site as a huge following and rightfully so as he pours his heart into his writing.
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.
Sunday, May 17, 2015
Options Trade Update
I recently wrote about a purchase I have made in Canadian National Railway. Since my purchase, the stock price fell by almost $6.00 a share before starting finding some positive momentum. I wanted to take advantage of this decline in share price, but I had to do something different than an actual purchase due to lack of capital in the TFSA account. So I bought 2 call option contracts, which is Option Trade #2 in the link, of Canadian National Railway (CNR) with a $74.00 strike price and June 19, 2015 expiration date. The premium I paid was $1.90 per contract and total cost being $391.95 including commissions.
On May 15, 2015, I sold to close at $2.15 per contract. The option price was showing some momentum with the stock price showing some upward price movement. I decided to close the option and take the small profits.
Summary:
Initial Investment: # of contracts *100 * premium + commission
= 2*100*$1.90 + $11.95
= $391.95
Proceeds of Sale = 2 *100*2.15 - $11.95
= $418.05
Profit = $418.05-$391.95
= $26.10
Total Return = $26.10/$391.95
= 6.659%
This is a small profit, but I will take a small profit over a loss any day. This trade is inside my TFSA so these profits will be tax-free.
I still own my 25 shares of CNR ( Toronto Stock Exchange) in my TFSA. The railways have excellent competitive advantages in the marketplace especially the barrier to entry. It would be near impossible to start a railway from scratch that would cover a large section of Canada or the United States. It is advantageous from a cost and environmental stand point to transport goods over large distances by rail instead of 100% by a tractor trailer.
Do you like the railways?
Disclosure: Long CNR
Photo Credit : www.railpictures.ca
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.
On May 15, 2015, I sold to close at $2.15 per contract. The option price was showing some momentum with the stock price showing some upward price movement. I decided to close the option and take the small profits.
Summary:
Initial Investment: # of contracts *100 * premium + commission
= 2*100*$1.90 + $11.95
= $391.95
Proceeds of Sale = 2 *100*2.15 - $11.95
= $418.05
Profit = $418.05-$391.95
= $26.10
Total Return = $26.10/$391.95
= 6.659%
This is a small profit, but I will take a small profit over a loss any day. This trade is inside my TFSA so these profits will be tax-free.
I still own my 25 shares of CNR ( Toronto Stock Exchange) in my TFSA. The railways have excellent competitive advantages in the marketplace especially the barrier to entry. It would be near impossible to start a railway from scratch that would cover a large section of Canada or the United States. It is advantageous from a cost and environmental stand point to transport goods over large distances by rail instead of 100% by a tractor trailer.
Do you like the railways?
Disclosure: Long CNR
Photo Credit : www.railpictures.ca
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.
Friday, May 15, 2015
Recent Sale
I recently made a purchase of Restaurant Brands International. Restaurant Brands International (ticker symbol QSR on both TSX and NYSE) is the company that was created by the takeover of Tim Hortons by Burger King.
Over the last couple of days there was some upside with the share price. Although Starbucks is a premium coffee, 8 out of 10 cups of coffee in Canada is sold at Tim Hortons. Starbucks, McDonalds, Second Cup, and Tim Hortons all compete for customers in the coffee shop space. As some of the stocks in my portfolio have been beat up such as Enerplus and CN Rail, I decided to take profits from this position.
I was watching my brokerage account, as I am off this week, and placed a limit order of $50.15. The order was filled right away at $50.23. The difference in price is the quotes in my brokerage are delayed up to 15 minutes for stocks trading on Canadian Exchanges.
Summary of Investment:
# of shares : 40
Duration of Investment : 3 days
Initial Investment : $48.85*40+$5.09 = $1959.09
Proceeds of Sale : $50.23*40-$5.09 = $2004.11
Profit = $2004.11-$1959.09
= $45.02
Total Return = Profit / Initial Investment
= $45.02/$1959.09
= 2.298%
This sale reduces my annual dividend income by $16.00, as the current yearly dividend appears to be $0.40 per share.
EDIT: My brokerage account trading summary on May 15 at night, saying purchase price is $48.85 instead of $48.84 . The numbers have been adjusted above.
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.
Over the last couple of days there was some upside with the share price. Although Starbucks is a premium coffee, 8 out of 10 cups of coffee in Canada is sold at Tim Hortons. Starbucks, McDonalds, Second Cup, and Tim Hortons all compete for customers in the coffee shop space. As some of the stocks in my portfolio have been beat up such as Enerplus and CN Rail, I decided to take profits from this position.
I was watching my brokerage account, as I am off this week, and placed a limit order of $50.15. The order was filled right away at $50.23. The difference in price is the quotes in my brokerage are delayed up to 15 minutes for stocks trading on Canadian Exchanges.
Summary of Investment:
# of shares : 40
Duration of Investment : 3 days
Initial Investment : $48.85*40+$5.09 = $1959.09
Proceeds of Sale : $50.23*40-$5.09 = $2004.11
Profit = $2004.11-$1959.09
= $45.02
Total Return = Profit / Initial Investment
= $45.02/$1959.09
= 2.298%
This sale reduces my annual dividend income by $16.00, as the current yearly dividend appears to be $0.40 per share.
EDIT: My brokerage account trading summary on May 15 at night, saying purchase price is $48.85 instead of $48.84 . The numbers have been adjusted above.
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.
Wednesday, May 13, 2015
Option Trades
I decided to place 2 option trades today. The first trade involved collecting premium and the other option was going long.
Option Trade #1
For the first trade, I sold one (1) contract of Telus Corporation at $40 strike price at $0.46. The expiration date is June 19, 2015. Telus Corporation, whose ticker symbol is T on the Toronto Stock Exchange (TSX) is in the communications space and competes with Shaw Communications, Rogers Communications and Bell Canada Enterprises.
Scenario 1: Option not assigned
Option Premium including commission = $46.00 -$10.95 = $35.05
Days to Expiration : 37
Return of Capital = $35.05/(0.20*($4000-$35.05))
= 4.420%
Annualized Return of Capital = ROC/37*365
= 43.6%
In a margin account, an investor only has to have 20% of break even roughly for capital upfront.
Scenario 2 :
If option is assigned:
Option assignment fee : $24.95
Cost Basis = # of contracts *100 shares*strike price - (option premium less comm)+assignment fee
= 1*100*$40-$35.05+$24.95
= $3989.90
The annual dividend rate of Telus Corporation is $1.68 per share.
Yield on Cost = 1.68/(3989.90/100))
= 4.211%
If I placed a limit order with $40.00 price, my yield on cost will be lower. My commission would be $4.95
Yield on Cost= 1.68/(4004.95/100)
= 4.195%
Selling put options can reduce your cost basis. With a reduced cost basis, the yield will be greater and therefore your money will be working harder for you. Selling a put option allows you to collect income while waiting for the price to go down.
Note: Selling put options is risky. It can be used in a variety of ways. I only sell put options in stocks I am comfortable owning at the strike price.
Option Trade #2
On May 13, the share price of Canadian National Railway (CNR.TO) was trading below $74.00 a share. I am bullish on the stock. I recently bought shares of the stock in my TFSA, which you can read about here. I could of averaged down on the shares but I only have around $440 in this account. I wanted to take advantage of this falling share price. I decided to BUY a call option with a $74.00 strike price. So I placed a limit order for 2 contracts of $1.90 with a June 19, 2015 expiration date.
Summary of CNR.TO Option Trade
Cost of 2 contracts : 2 * $1.90 +$11.95 = $391.95
Days to Expiration = 37
Disclosure : I currently own CNR, SJR.B, RCI.B, BCE
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.
Option Trade #1
For the first trade, I sold one (1) contract of Telus Corporation at $40 strike price at $0.46. The expiration date is June 19, 2015. Telus Corporation, whose ticker symbol is T on the Toronto Stock Exchange (TSX) is in the communications space and competes with Shaw Communications, Rogers Communications and Bell Canada Enterprises.
Scenario 1: Option not assigned
Option Premium including commission = $46.00 -$10.95 = $35.05
Days to Expiration : 37
Return of Capital = $35.05/(0.20*($4000-$35.05))
= 4.420%
Annualized Return of Capital = ROC/37*365
= 43.6%
In a margin account, an investor only has to have 20% of break even roughly for capital upfront.
Scenario 2 :
If option is assigned:
Option assignment fee : $24.95
Cost Basis = # of contracts *100 shares*strike price - (option premium less comm)+assignment fee
= 1*100*$40-$35.05+$24.95
= $3989.90
The annual dividend rate of Telus Corporation is $1.68 per share.
Yield on Cost = 1.68/(3989.90/100))
= 4.211%
If I placed a limit order with $40.00 price, my yield on cost will be lower. My commission would be $4.95
Yield on Cost= 1.68/(4004.95/100)
= 4.195%
Selling put options can reduce your cost basis. With a reduced cost basis, the yield will be greater and therefore your money will be working harder for you. Selling a put option allows you to collect income while waiting for the price to go down.
Note: Selling put options is risky. It can be used in a variety of ways. I only sell put options in stocks I am comfortable owning at the strike price.
Option Trade #2
On May 13, the share price of Canadian National Railway (CNR.TO) was trading below $74.00 a share. I am bullish on the stock. I recently bought shares of the stock in my TFSA, which you can read about here. I could of averaged down on the shares but I only have around $440 in this account. I wanted to take advantage of this falling share price. I decided to BUY a call option with a $74.00 strike price. So I placed a limit order for 2 contracts of $1.90 with a June 19, 2015 expiration date.
Summary of CNR.TO Option Trade
Cost of 2 contracts : 2 * $1.90 +$11.95 = $391.95
Days to Expiration = 37
Disclosure : I currently own CNR, SJR.B, RCI.B, BCE
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, May 12, 2015
Recent Purchase
I used to own shares in Tim Hortons. Tim Hortons is a Canadian iconic brand in the fast food restaurant. When there was an announcement that Burger King, led by 3G Capital, wanted to acquire Tim Hortons, I held on to my shares for a bit. I decided to sell the 100 shares for a capital gain of approximately $3000 dollars before the acquisition finalized.
The new company is called Restaurant Brands International and is headquartered in Canada. The company trades under the ticker symbol QSR on both the NYSE and Toronto Stock Exchange (TSX). The company recently released its first quarter (1Q) results. They keep the businesses separate and therefore the earnings results are told for each separately.
First Quarter Highlights (Tim Hortons)
Tim Horton's has 3773 restaurants in Canada, 892 restaurants in 18 states in the United States and 59 restaurants in 5 international countries. Tim Horton's started in Canada in 1964, the United States in 1984 and 2011 for international stores. The stores of Tim Horton's can be walk-in only, walk-in and drive-thru, and inside fuel stations which is mostly drive thru customer based.
First Quarter Highlights (Burger King)
On May 12, 2015, I purchased 40 shares of Restaurant Brands International (QSR) on the Toronto Stock Exchange at $48.85 per share for a cost of $1959.09 including commissions. This transaction occurred in my margin account.
Conclusion:
During the most recent earnings they announced a dividend payment of $0.10 per share for the quarter. This purchase adds $16.00 to my annual dividend income on the assumption the annualized dividend is $0.40 per share.
I am not 100% sure if this stock will be a long term hold at this stage as the dividend is low. With no record of dividend growth as this is a new formed company, it is hard to tell what the company will do going forward in regards to dividends.
I will update my Investing spreadsheet in early June to reflect the new purchase.
EDIT: May 13 Total commissions which include ECN fees is $5.09. I purchased an odd lot of shares (not a multiple of 100). May 15 trading summary shows purchase price is $48.85 and not $48.84.
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.
The new company is called Restaurant Brands International and is headquartered in Canada. The company trades under the ticker symbol QSR on both the NYSE and Toronto Stock Exchange (TSX). The company recently released its first quarter (1Q) results. They keep the businesses separate and therefore the earnings results are told for each separately.
First Quarter Highlights (Tim Hortons)
- Global comparable sales of 5.3% , which was driven by continued strength in coffee and successful new product launches.
- Net Restaurant Growth of 53 units, representing restaurant base growth of 4.4% on a trailing 12 month basis.
- System wide sales increased 8.1% to 1.5 billion for the first quarter
Tim Horton's has 3773 restaurants in Canada, 892 restaurants in 18 states in the United States and 59 restaurants in 5 international countries. Tim Horton's started in Canada in 1964, the United States in 1984 and 2011 for international stores. The stores of Tim Horton's can be walk-in only, walk-in and drive-thru, and inside fuel stations which is mostly drive thru customer based.
First Quarter Highlights (Burger King)
- Global comparable sales of 4.6% with particular strength in United States and Canada
- Net Restaurant Growth of 15 units representing restaurant base growth of 5.2% on a trailing 12 month basis
- System-wide sales increased 9.6% to $4.0 billion for the first quarter
On May 12, 2015, I purchased 40 shares of Restaurant Brands International (QSR) on the Toronto Stock Exchange at $48.85 per share for a cost of $1959.09 including commissions. This transaction occurred in my margin account.
Conclusion:
During the most recent earnings they announced a dividend payment of $0.10 per share for the quarter. This purchase adds $16.00 to my annual dividend income on the assumption the annualized dividend is $0.40 per share.
I am not 100% sure if this stock will be a long term hold at this stage as the dividend is low. With no record of dividend growth as this is a new formed company, it is hard to tell what the company will do going forward in regards to dividends.
I will update my Investing spreadsheet in early June to reflect the new purchase.
EDIT: May 13 Total commissions which include ECN fees is $5.09. I purchased an odd lot of shares (not a multiple of 100). May 15 trading summary shows purchase price is $48.85 and not $48.84.
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, May 9, 2015
Week End Reading - May 9
This was an eventful week in western Canada. Alberta had a provincial election on Tuesday, and the outcome has brought fear to the energy sector on both Canada and the United States. The Progressive Conservative Party was decimated in the election. They were in power for 44 years straight. With the fallen oil prices, Premier Jim Prentice and the PCs released on budget with new tax increases and user fees etc. They asked people who make more to a pay a little more. The PC party did not raise corporate taxes. Premier Prentice said the budget will start a plan in which the province doesn't rely on oil and gas royalties to run government and provide services. Prentice believed that an election was the right thing to do because the budget was so drastic compared to previous budgets.
Previous scandals that plagued the government under former Premier Alison Redford, not raising corporate taxes, and Premier Prentice telling Albertans to look in the mirror when it comes blame who cause the financial problems of the government over the years. The PC party lost 61 seats in the election and do not even form the official opposition. The NDP government won 53 seats and formed a majority government. An NDP government is not good for Alberta and lots of business people agree.
On election night, Prentice resigned as leader of the PC Party and resigned as MLA before all the votes were counted, saying it is "time to spend time being a husband, father and grandfather". He was running to be Premier , which would be the total opposite of this statement because he would be traveling a lot plus would be out of his constituency a lot. I do not vote, but from previous experience living in a province with NDP government it was quite bad.
I am a shareholder in companies that are involved in the energy sector, so I will be paying attention to what happens more closely with government announcements.
Some articles that I read during the week, that you might find interesting are as follows:
Dividend Mantra, wrote a posted on his Freedom Fund. Dividend Mantra is making remarkable progress in his goal to obtain financial independence. If you have not started saving and investing money start now! It won't seem significant at first, but you will start to see great results in a short will. I continue to add to my portfolio every month.
Liquid Independence posted his fiscal update. Liquid is making tremendous progress in his goal of being financial independent. Some of his investments differ from most of the bloggers in the financial area.
Dividend Hustler posted about one of his goals. This is a great read and I highly recommend everyone to read this post. A lot of people what everything all at once such as big house and new expensive car or truck. An investor has to make sacrifices now to have a better life with less stress down the road. Growing passive income allows you more freedom to choose what to do with your time which is the reason why I love increasing my passive income.
Tawcan posted about frugality. For me, being frugal allows me to have a higher savings rate which leads me to be able to invest more money and grow passive income at a quicker rate. I choose to buy a bus pass each month instead of having a car. I choose to not have cable, but instead watch some shows on the computer such as Shark Tank and Dragon's Den.
I wrote about my most recent buy, which was an investment in dividend growth stock. This investment is one I want to hold for a long time as it has strong competitive advantages.
Photo Credit : www.cafepress.com
Wednesday, May 6, 2015
Recent Buy
I decided to put some cash to work for me on May 4, 2015. I was looking to invest in a dividend growth stock that had stability and poised for long term growth of profits and dividends.
What Investment Did I Make?
I decided to make an investment in a railway. Canadian National Railway has railroads coast to coast in Canada and serves some major markets in the United States. The company trades on the Toronto Stock Exchange under the ticker symbol CNR and CNI on the New York Stock Exchange.
The stock price of CNR has decreased over the past 3 months. As of the close on May 4, the stock is down 7.72% over the last 3 months. The stock is down 4.60% over the last month and down 0.49% YTD. This decrease in price can be the result of recent government actions in Canada and United States in regards to rail cars. This will be a cost that all rail roads in Canada and the United States will have to endure to make rail transportation safer for hauling dangerous goods, such as crude oil and propane.
Canadian National Railway released its first quarter earnings for the quarter ending March 31, 2015 on April 20. Some of the highlights from the quarter earnings release are as follows:
The revenues increased in all areas except the coal shipments, which decreased by 13%. CN Rail transports things such as grains and fertilizers, forest products, automotive, metals and minerals, petroleum and chemicals, and intermodal. Intermodal tranport involves transport containers that can be transported by cargo ship, train and truck. These intermodal containers can be 53 ft, 40 ft or 20ft containers.
Future Growth
The company is aiming for double digit growth for 2015. The company plans to invest in safety and improve productivity. CN Rail recently announced a 25% dividend increase and aiming for a dividend payout ratio of 35%.
Conclusion
CN Rail is known as often referred to the best run rail road in North America. Railways allow for the efficient transportation of goods over long distances at reduce costs and environments impacts. We all have seen these double decker trains the contain lots of shipping containers and 53 ft intermodal containers. One double stack freight train replaces hundreds of trucks, which drastically reduces costs for shippers and has a less environmental impact.
The company will have increased costs over the next few years by making rail cars more safer or replacing cars to meet government guidelines of rail transportation in both Canada and the United States.
On May 4 2015, I purchased 25 shares of CNR at $79.75 per share for a total cost of $1998.79 included commissions. This investment was made inside my TFSA. The yield on my initial investment is 1.563% based on the current annual dividend of $1.25 per share. This purchase adds 31.25 to my annual dividend income. The company has a 5 year dividend growth rate of 14.64% compared to the industry average of 6.83% .
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.
What Investment Did I Make?
I decided to make an investment in a railway. Canadian National Railway has railroads coast to coast in Canada and serves some major markets in the United States. The company trades on the Toronto Stock Exchange under the ticker symbol CNR and CNI on the New York Stock Exchange.
The stock price of CNR has decreased over the past 3 months. As of the close on May 4, the stock is down 7.72% over the last 3 months. The stock is down 4.60% over the last month and down 0.49% YTD. This decrease in price can be the result of recent government actions in Canada and United States in regards to rail cars. This will be a cost that all rail roads in Canada and the United States will have to endure to make rail transportation safer for hauling dangerous goods, such as crude oil and propane.
Canadian National Railway released its first quarter earnings for the quarter ending March 31, 2015 on April 20. Some of the highlights from the quarter earnings release are as follows:
- Net Income $704 million Canadian compared to $623 million Canadian in first quarter of 2014
- Q1 2015 net income of $704 million Canadian increased 28% over adjusted net income of $551 million for the first quarter of 2014
- Q1 2015 operation income increased 30% to $1,063 million Canadian
- Q1 2015 revenues increased 15 percent to $3,098 million Canadian
- Revenue tonne miles grew 7% and carloading increased 9%
- Free cash flow for first quarter was $521 million Canadian, which is up from $494 million Canadian from Q1 201
"The operating ratio is a financial term defined as a company's operating expenses as a percentage of revenue. This financial ratio is most commonly used for industries which require a large percentage of revenues to maintain operations, such as railroads. In railroading, an operating ratio of 80 or lower is considered desirable.For CN Rail, the operating ratio improved to 65.7% from from 69.6 %, which represents an improvement of 3.9%.
The operating ratio can be used to determine the efficiency of a company's management by comparing operating expenses to net sales. It is calculated by dividing the operating expenses by the net sales. The smaller the ratio, the greater the organization's ability to generate profit. The ratio does not factor in expansion or debt repayment.
Alternatively, it may be expressed as a ratio of sales to cost. In such case a higher ratio indicates a better ability to generate revenue. " (Source www.wikipedia.com)
The revenues increased in all areas except the coal shipments, which decreased by 13%. CN Rail transports things such as grains and fertilizers, forest products, automotive, metals and minerals, petroleum and chemicals, and intermodal. Intermodal tranport involves transport containers that can be transported by cargo ship, train and truck. These intermodal containers can be 53 ft, 40 ft or 20ft containers.
Future Growth
The company is aiming for double digit growth for 2015. The company plans to invest in safety and improve productivity. CN Rail recently announced a 25% dividend increase and aiming for a dividend payout ratio of 35%.
Conclusion
CN Rail is known as often referred to the best run rail road in North America. Railways allow for the efficient transportation of goods over long distances at reduce costs and environments impacts. We all have seen these double decker trains the contain lots of shipping containers and 53 ft intermodal containers. One double stack freight train replaces hundreds of trucks, which drastically reduces costs for shippers and has a less environmental impact.
The company will have increased costs over the next few years by making rail cars more safer or replacing cars to meet government guidelines of rail transportation in both Canada and the United States.
On May 4 2015, I purchased 25 shares of CNR at $79.75 per share for a total cost of $1998.79 included commissions. This investment was made inside my TFSA. The yield on my initial investment is 1.563% based on the current annual dividend of $1.25 per share. This purchase adds 31.25 to my annual dividend income. The company has a 5 year dividend growth rate of 14.64% compared to the industry average of 6.83% .
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.
Monday, May 4, 2015
Dividend Update - April 2015
The month of April 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 price of a barrel of crude oil is currently trading at $58.86 a barrel. As the energy sector is struggling with the price, this continues to affect certain stocks in my portfolio as some industry professionals believe that oil prices could remain like this to up to 3 years. The Alberta provincial election is May 5, which currently has the NDP in the lead in the poles. The current party, Progressive Conservative has been in power for 44 years under different premiers. I am currently looking to invest in other areas of the economy right now as I believe if the NDP gets elected it will not be good for Alberta oil industry which is already struggling with low oil prices.
- Bank of Nova Scotia (BNS) - $20.49
- Bell Canada Enterprises (BCE) - $65.00
- Enerplus (ERF) -$ 26.20
- Killam Properties (KMP) - $5.75
- Rogers Communications Class B (RCI.B) - $48.00
- Shaw Communications (SJR.B) - $19.75
- TD Bank (TD) - $51.00
- Boston Pizza Royalties Fund (BPF.UN) - $23.87
- Claymore 1-5 yr Laddered Corporate Bond (ETF) - $0.91
- Cominar REIT (CUF.UN ) - $5.39
- Dream Office REIT (D.UN) - $ 16.61
- Killam Properties (KMP) - $ 14.55
This total represents a 17.06% increase from 3 months ago and 20.79% increase year over year. TD Bank dividend was deposited into my account in April whereas it was deposited into my account in February. Although its dividend payment date was January, that payment date fell on a weekend. In some cases the day a week will affect the payment being deposited. The amount is also higher due to the dividend increases which offset the dividend decrease in Enerplus.
I also received a dividend in Sherritt International of $10.00, but this is not included in the dividend income above as it was a trade, which I recently wrote about.
I also received another distribution payment of $56.00 for my swing trade in Dream Office 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 $1211.47 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
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.
Sunday, May 3, 2015
Portfolio Update - Apr 2015
The month of April in now behind us. The price of crude oil is starting to rise a bit. The price of crude oil for June 15 contract closed of $59.05 US/bbl .
I am cautious about the price of a barrel of crude oil still. I do believe there is still oversupply of crude oil and there will continue to be weakness in the price of this commodity. This will effect the economy in Canada as a lot of businesses are a direct relation or indirect relation to the energy sector. This is especially true in Canada. The people in the western Canada oil patch get paid well. These works may live in other parts of the country as well. When the industry slows down, it means less people in restaurants, hotels etc. I previously worked in the oil patch and had to do a lot of traveling while working. I ate at a lot of restaurants and stayed in hotels. When the oil patch is booming, there are oil field trucks everywhere.
During the month of Apr, I did not make any long term investments. I did acquire more shares through DRIPs.
Shares added due to drip
1 shares of ERF @ $15.55 for a total of $15.55
1 share of KMP @ $10.94 for a total of $10.94
x.xxx shares of BNS @ x.xxx for a total of $20.49
Note: BNS did pay a dividend on Apr 28. I own these shares directly though the transfer agent, which is the old way of buying shares. The price and amount of new shares has not shown yet in the account yet. I will update this when it is available.
Enerplus (ERF.TO) did cut its dividend from $0.09 per share a month to $0.05 per share a month starting with the payment for April. Enerplus is an energy producer and its revenues are highly impacted by the price of crude oil. Enerplus also has revenues from Natural Gas. The price of the stock has risen in the past month, which I believe investor's are confident in how this company is handling the effect of low oil prices.
I did exit out of my trade in Sherritt International which I held for 59 days on May 1. This was a profitable trade and all the profit will remain in the brokerage account.
As of May 3, 2015, the value of my portfolio stands at $81960.97. This is an increase of 4.41% over last month. I will update my investing account tab above
EDIT: May 5 2015 Today the shares show up for my BNS Reinvestment although the dividend showed up days ago. Last year BNS decided to stop their discount on shares purchased with reinvested dividends.
.305603shares of BNS @ 67.0477 for a total of $20.49
Disclosure: Long KMP, ERF, BNS
DISCLAIMER
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| Courtesy of Yahoo Finance |
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| Courtesy of Yahoo Finance |
I am cautious about the price of a barrel of crude oil still. I do believe there is still oversupply of crude oil and there will continue to be weakness in the price of this commodity. This will effect the economy in Canada as a lot of businesses are a direct relation or indirect relation to the energy sector. This is especially true in Canada. The people in the western Canada oil patch get paid well. These works may live in other parts of the country as well. When the industry slows down, it means less people in restaurants, hotels etc. I previously worked in the oil patch and had to do a lot of traveling while working. I ate at a lot of restaurants and stayed in hotels. When the oil patch is booming, there are oil field trucks everywhere.
During the month of Apr, I did not make any long term investments. I did acquire more shares through DRIPs.
Shares added due to drip
1 shares of ERF @ $15.55 for a total of $15.55
1 share of KMP @ $10.94 for a total of $10.94
x.xxx shares of BNS @ x.xxx for a total of $20.49
Note: BNS did pay a dividend on Apr 28. I own these shares directly though the transfer agent, which is the old way of buying shares. The price and amount of new shares has not shown yet in the account yet. I will update this when it is available.
Enerplus (ERF.TO) did cut its dividend from $0.09 per share a month to $0.05 per share a month starting with the payment for April. Enerplus is an energy producer and its revenues are highly impacted by the price of crude oil. Enerplus also has revenues from Natural Gas. The price of the stock has risen in the past month, which I believe investor's are confident in how this company is handling the effect of low oil prices.
I did exit out of my trade in Sherritt International which I held for 59 days on May 1. This was a profitable trade and all the profit will remain in the brokerage account.
As of May 3, 2015, the value of my portfolio stands at $81960.97. This is an increase of 4.41% over last month. I will update my investing account tab above
EDIT: May 5 2015 Today the shares show up for my BNS Reinvestment although the dividend showed up days ago. Last year BNS decided to stop their discount on shares purchased with reinvested dividends.
.305603shares of BNS @ 67.0477 for a total of $20.49
Disclosure: Long KMP, ERF, BNS
DISCLAIMER
Saturday, May 2, 2015
Recent Trade Update
On May 1, my limit order for the sale of my shares of Sherritt International went through. I originally had the limit order set to $2.65 for most of the duration of the trade. I raised it a few times to the $2.70. But recently, I decided to lower the limit price in order to close out the trade as there continues to be weakness in the price of nickel, which affects this company.
My position was initiated on Mar 4, 2015, which you can read about here. During this time, the company also paid a dividend of $0.01 a share. So, I received a $10.00 dividend payment for my 1000 shares.
Analysis
Initial Investment including commissions : $2359.95
Proceeds of Sale including commissions : $2520.05
Dividends Received: : $10.00
Total Profit = $2520.05-$2359.95+$10.00
= $170.10
Total Return = Profit / Initial Investment
= $170.10/$2359.95
= 7.208%
This position was held for a total of 59 days. The dividend received from this position does not get counted in my dividend income reports as it was for a trade and not investment purposes. As I am at work during market hours and cannot access my brokerage account, I use limit orders for buying or selling at the prices that I want. I was actually going to place a trailing stop order for this on Apr 30, but changed my mind to a normal limit order .
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Disclosure: None
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