Turning The Tap Open

   With the uncertainty in the whether interest rates will rise or stay the same as affected the values of REITs.  In Canada, the REITs also have to deal with the effects of low oil prices.  This is caused the price of REITs to fall and remain low over the past several months.  

   So I decided to TURN drip on for Dream Office (Ticker Symbol D.UN.TO) in both the margin account and TFSA.  I also decided to turn the DRIP on the Cominar REIT (Ticker Symbol CUF.UN.TO) inside the TFSA.  As there was issue with getting a confirmation from my brokerage, these DRIPs might not happen until November 15, 2016  payment.  These DRIPs will allow for the purchase of whole shares only.

Disclosure: Long D.UN.TO and CUF.UN.TO

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 Trades - Update

The 3rd Friday of each month is always an option expiration day. Some stocks have options that are weekly. I had 3 options that were set to expire on Oct 21, 2016.

There was rally in the price of gold lately, which pushed the price of IMG.TO over $5 per share.

       -3 Put IMG.TO $5 Oct 21 2016  =  $53.05 premium collected
       -3 Call IMG.TO $6 Oct 21 2016 = $ 38.05 premium collected

 I previously wrote a covered call in Potash Corporation on the Toronto Stock Exchange

       -2 Call POT.TO $23 Oct 21 2016 = $88.05

In these 3 option trades that expired, I get to keep the premium of $179.15 as seller of options get to keep the premium regardless if market goes up, down, or sideways.

With the price of IMG.TO trading near $5.50 a share on Friday, I decided to write a covered call with Nov 18 2016 expiration date. I sold 3 call contracts with a $6.00 strike price to collect a premium of $41.05 after commissions.

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.

Recent Dividend Increase

 As an investor in a dividend growth stock, what is that I look for as an investor?  As an investor, I look for a history of dividend growth.  On October 20th, Transforce Inc (ticker symbol : TFI ) released its earnings for their most recent quarter. Some of the highlights are as follows:

• Operating income of $72.4 million, or 8.1% of revenue before fuel surcharge; solid year-over-year improvements in Package and Courier, as well as in LTL
• Adjusted net income from continuing operations* of $56.4 million, or $0.60 per diluted share*, versus $48.6 million last year, or $0.48 per diluted share
• Free cash flow from continuing operations* of $81.3 million, or $0.88 per share*, a portion of which was returned to shareholders through the repurchase of common shares ($41.8 million) and dividends ($15.8 million)
• Quarterly dividend increased 12% to $0.19 per share from $0.17 previously 

•  Revenue before fuel surcharge from continuing operations of $897.4 million

Transforce Inc. is a North American leader in the transportation and logistics industry, that is headquartered in Montreal, Canada.  They operate across Canada and operate through subsidiaries in the United States.  Transforce Inc. operates in various sectors as follows:

• Package and courier
• Less-than-truckload
• truckload
• logistics

 Conclusion

The annual dividend rate of Transforce Inc was increased from $0.68 per year to $0.76.  This represents an increase of 11.76%.  What are the chances of getting a raise of 11.76% in a year at a job? Most jobs people never even get raises.  The might get a cost of living increase, which they interpret as a raise.  Personally, I do not consider a cost of living increase a raise as everyone usually gets this regardless of when they started to work at the particular company.  I currently own 50 shares of this company, so that means my annual dividends received increase by $4.00 for doing absolutely nothing. This is equivalent of investing $114.29 of my own money at a 3.5% yield.

Disclosure:   Long TFI

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.

CIBC - Dividend Analysis

          Canada has 5 big banks which are often regarded as some of the best banks in the world.  These banks are Royal Bank of Canada (RY), Bank of Nova Scotia (BNS), Toronto Dominion Bank (TD), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CM). The ticker symbol for each of these banks is in parentheses.

           Today, we are going to focus on Canadian Imperial Bank of Commerce, commonly know as CIBC.  CIBC has been paying dividends in 1868 and that year is not a typo.  CIBC has not missed a dividend payment in 148 years.  Therefore, CIBC has been paying dividends longer than any current human has been alive.  These dividends are coutesy of the investor relatons site of CIBC and represent the value in Canadian dollars.

Year                   Annual Dividend Amount  2000                  $1.290    2001                  $1.440  2002                  $1.600  2003                  $1.640  2004                  $2.200  2005                  $2.660  2006                  $2.760  2007                  $3.110  2008                  $3.480  2009                  $3.480  2010                  $3.480  2011                  $3.510  2012                  $3.640  2013                  $3.800  2014                  $3.940  2015                  $4.300  2016                  $4.750 As you can see the dividend has increased each year from 2011 to 2016. During the sub prime melton which lead to the global recession, CIBC did not reduce its dividend, but it also did not raise its dividend from 2008-2010.  The other 4 big banks in Canada did the same with no dividend increase or decrease in basically the same time frame.  With the dividend increasing this much, this also causes the price of the stock to rise as people want the yield.  In order to keep increasing the dividend, the bank has to increase earnings each year as dividends are paid from earnings. Compound Annual Dividend Growth Rate from 2000 to 2016  is  8.49%. Compound Annual Dividend Growth Rate from 2010 to 2016  is  5.32 % Everytime the dividend is raised, an investor gets a raise that is usually higher than you would get at a job.  When the company raises its dividend, an investor does not do anything besides remaining a loyal shareholder.  A dividend growth investor invests in companies that pay dividends and increases their dividend yearly, which helps them to reach financial freedom quicker. Disclosure:  Do not own any shares of C.I.B.C. 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.

Dividend Update - September 2016

      The month of September 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 markets continue to go higher in the month of September.  The price of oil continues to be a big topic. Recently watched on BNN, that OPEC believes there will be a bigger surplus in 2017 although they capped production recently.

      One thing for sure, is that I was paid dividends and distributions for being a shareholder or unit holder in  various companies or funds. In  Sept 2016, the Dream Office REIT will be counted as dividend income  for the first time.

 Non-registered Account

• Enbridge (ENB) - $8.30
• Enerplus (ERF)  -$ 5.58
• Dream Office REIT   (D.UN)  - $ 75.00
• Manulife Financial Corporation (MFC)  - $18.50
• Shaw Communications (SJR.B)    - $19.75

TFSA

• Boston Pizza  Royalties Fund (BPF.UN)   - $26.91
• Canadian National Railway (CNR) - $ 14.25
• Claymore 1-5 yr Laddered Corporate Bond ETF (CBO)  - $0.64
• Cominar REIT (CUF.UN ) - $5.39
• Dream Office REIT   (D.UN)  - $ 17.50
•  Enbridge (ENB) - $17.49
• Horizons Natural Gas Yield ETF (HNY) - $9.99
• Killam Properties REIT (KMP.UN) - $  15.10

Total = $234.40

        As the amount of distribution from D.UN inside my margin account, will have a large impact on the comparison of dividend income from 3 months or from 12 months ago.  Therefore, I wil not compare Sept 2016 dividend income with that of 3 months and 12 months ago.

 Dream REIT has reduced the amount of distribution they pay monthly which was announced in February.  Recently, I wrote about purchasing more units of D.UN inside a margin account.  Starting in September, the distribution from this D.UN inside the margin account will be included in my dividend income.

     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.

How was your dividend income for September?

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.

Recent Sale

     Several months ago, I purchased 100 shares of Manulife Financial Corporation on the Toronto Stock Exchange. The ticker symbol is MFC. I purchased my shares at $18.61 per share.  Since I have owned the shares, the price of the stock has fallen to below $17.00 to above $19.00.  I attempted to sell cover calls, but the premium was not high enough to justify writing a call.  With my brokerage, there is an option assignment fee of $24.95.  Some brokers have no option assignment fee, while other brokerages have higher option assignment fees.

     Manulife Financial Corporation, together with its subsidiaries, provides financial advice, insurance, and wealth and asset management solutions for individuals, groups, and institutions in Asia, Canada, and the United States. It offers various health and individual life, and individual and group long-term care insurance through insurance agents, brokers, banks, financial planners, and direct marketing. The company also provides pension contracts and mutual fund products and services; various retirement products to group benefit plans; and annuities, single premium, and banking products, such as deposit and credit products to Canadian customers, as well as non-guaranteed, partially guaranteed, and fully guaranteed investment options through general and separate account products. It distributes wealth and asset management products through insurance agents and brokers affiliated with the company, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks. In addition, the company is involved in the property and casualty reinsurance business; and run-off reinsurance operations, including variable annuities, and accident and health. Further, it provides planning software platform that enables financial advisors and institutions to help clients make financial planning decisions; manages timberland and agricultural portfolios; insurance agency, investment counseling, portfolio and mutual fund management, mutual fund dealer, financial reinsurance, and mutual funds marketing businesses, as well as investment management, advisory, and dealer activities. Additionally, the company holds and manages oil and gas properties; holds oil and gas royalties and European equities; and develops and operates hydro-electric power projects. Manulife Financial Corporation was founded in 1887 and is headquartered in Toronto, Canada.  (Source: Yahoo Finance)

       On October 13th, I put in a trailing stop limit order of $0.05 stop and and offset of $0.01.  The stock was trading at $19.01 at this time.  This means my starting point is $18.96. So selling point reached $19.13 yesterday before it filled.  That means the price of the shares went up to at least $19.18.  Due, to being in an low interest rate environment, this stock will struggle in price appreciation as the fixed income portion of their instruments are affected.

       Currently, MFC is paying an annual dividend of $0.74 per share.  That means my annual dividend income has been reduced by $74.00.  

 Summary:

Initial Price  = $18.61
# of shares = 100
# of dividend payments = 1
amount of dividend payment = $18.50
Sell Price = $19.13

Profit = # of shares *(Proceeds of Sale - Initial Cost) + Dividends
          = (1907.70 - 1865.95) + $18.50
          = $60.25

Return = Profit / Initial Cost
            = $60.25 / $1865.95
            = 3.23%

My return is 3.23% in just over 4 months.  If the stock falls below my previous entry price, I would strongly consider purchase shares again.  I will update my investing tab spreadsheet in early October to reflect this sale.

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 be NOT 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

Portfolio Update - Sept 2016

     The month of September 2016 is now behind us.  One of the major issues still facing the world is the low price of a barrel of crude oil, which is currently below $44 a barrel for WTI Crude Oil. This creates uncertainty in many oil producing regions especially in Canada. 

      I wrote about selling 2 put option contracts in TD Bank, which you can read about here. This option expired as the price of the stock never fell below the strike price on or before expiration.  I get to keep the premium of $38.05 after commissions, which represents a return of 0.34% for 24 days.  The represents a annual return of 5.12%.  Currently, the interest rate on my high interest savings account is currently is 0.80%.

    On September 13, I decided to average down on my position of Cominar REIT inside my TFSA.  I purchased 123 units at $16.16 per unit for a total cost of $1992.71 including commissions.  Cominar REIT is third largest REIT in Canada.

Cominar Real Estate Investment Trust is the third largest diversified real estate investment trust in Canada and currently remains the largest property owner in the Province of Québec. The REIT owns a real estate portfolio of 538 high-quality properties that cover a total area of 44.8 million square feet in Québec, Ontario, the Atlantic Provinces and Western Canada. Cominar's objectives are to pay growing cash distributions to unitholders and to maximise unitholder value by way of proactive management. (Cominar REIT Investor Relations)

     Cominar REIT current pays $0.1225 monthly per unit or $1.47 per share annually.  Therefore this purchase represents $180.81 increase to my annual dividend income.

      On September 16, the 3 put options contracts on IAMGold stock did not get assigned as the price of the stock remained above 5 dollars at or before expiration. On October 19 , I wroted a covered call for IAMGold Stock for 3 contracts at a $6.00 strike price.  I collected a premium of $38.05 after commissions.  On October 20, I sold 3 put option contracts with a strike price of $5.00.  Again, I collected a premium of $38.05 after commissions.

      On September 30, the put options in Royal Bank and TD Bank were not assigned as the price of these stocks stayed above the strike price on or before expiration.  On October 3, I sold a put option on Royal Bank with a strike price of $79.00 and expiration date of October 28, 2016.  I collected a premium of $59.05 after commissions.
  
      On September 25, I wrote about closing my position in Sherritt International,, which you can read about here.  This company is a nickel mine with operations in Canada, Cuba and Madagascar.

 Shares Acquired Through DRIP

0.164 Shares of ENB.TO @ $50.61 for a total cost of $8.30


As of October 9 2016, the value of the portfolio is $90201.01.  This is a 4.794% decrease over last month's total.  The spreadsheet in the investment tab above has been updated.

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 be NOT 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