Portfolio Update: May 2018

 The month of May is now behind us.

What a month for news affecting the markets? Where do I start? Things happened in the United States and Canada. 
  
 Canada has 2 major air lines in operation, which are WestJet Airlines and Air Canada.  Air Canada is a lot bigger than WestJet and fly to more destinations.  During the month of May, the pilots of WestJet voted 91% in favor of strike action. One of the major issues was the pilot's union did not like the plan of non WestJet pilots to fly SWOOP planes.  WestJet is considered a discount airline whereas SWOOP is a future ultra low cost carrier that will operate as a subsidiary of WestJet.  The pilots, as a goodwill gesture, said they will not strike during the long Victoria Day week in Canada.  This was to not disrupt the travel plans of their passengers.  The pilot's union and WestJet Airlines continued there talks and avoided a strike.  The head of the pilot's union and the CEO of WestJet came to an agreement to agree to mediation, and if necessary, use binding arbitration.  WestJet Airlines and the pilot's union said the pilots of SWOOP will be WestJet pilots. 

   Canadian Pacific Railway workers voted in favor of strike action.  Unlike WestJet Airlines, CP Rail  workers went on strike.  The strike lasted less than 48 hours, when an agreement was reached between the workers and CP Rail.  Canada has a backlog of grain shipments, so a prolonged striked would of been drastic to grain farmers getting their grain to markets.  CP Railway and its competitor CN Rail are regulated to move grain shipments.  Obviously, the railways move other freight such as intermodal, coal, crude oil etc.

The expansion of the Trans Mountain Pipeline, which was owned by Kinder Morgan, stalled as opposition to the pipeline.  The opposition was from protestors and the NDP government and the 3 members of the Green Party of BC are totally against the project.  The expansion of the pipeline would increase the capacity of Alberta oil and allow Canada to get their resources to market.  Right now, Canada is selling our oil to the Americans as a discount compared to what they could get on world markets.  Canada is essential loosing approximately $12 billion a year.

Kinder Morgan gave a May 31 2018 deadline to have the issue of protestors and opposition by the BC NDP Government come to a peaceful end.  Alberta NDP government recently passed legislation that Alberta government can restrict the movements if its resources through pipelines.  The NDP government  is going to go court to see if Alberta is legally allowed to restrict the flow of Alberta's resources outside Alberta's borders.  

The issues with the BC government opposing the pipeline along with the protestors, had led to the federal government  paying $4.5 billion to purchase the existing pipeline and assets of Trans Mountain pipeline.  The federal government has federal jurisdiction  when it comes to pipelines.  The federal government believes they can have construction on the pipeline started within months.  The federal government said the plan is to build the expansion and then to sell the pipeline to a non-government entity.  

Over the past several months, the US President Donald Trump and Canada are having talks about NAFTA.  NAFTA stands for North American Free Trade Agreement.  The US president announces tariffs this week and the federal liberal government retaliated by imposing tariffs of their own.

Portfolio Activity

During the month of May, there was no options trades started. 


Shares Purchased Via DRIP

0.434 unit of ENB.TO @ $39.37 for a total cost of $17.08  (transfer agent)
 
ENB.TO currently pays an annual dividend of $2.684. This DRIP adds $1.16 to my annual dividend income.

 
Dividend Increases
 
On May 1, A&W Revenue Royalties Income Fund (AW.UN) released it first quarter earnings.  With the release of their first quarter earnings, AW.UN announced a distribution increase $0.024 annually. The distribution was increased from $1.632 to $1.656.  This represents an increase of 1.47%. 

I currently own 38 shares of AW.UN,  so this increase adds $0.91 to my annual dividend income.  This increase of $0.91 is equivalent to investing $26.00 of my own money at a 3.5% yield. The distribution was recently raised for the Nov 30 2017 payment date.

On May 30, Bank of Montreal (BMO.TO) reported solid earnings and announced a dividend increase of $0.12 per year. The annual dividend was increase from $3.72 to $3.84, which represents a 3.23% increase. Bank of Montreal, along with 3 of the other 4 big banks, have been increasing their dividend twice a year. 

I currently own 35 shares of BMO.TO, so this increase adds $4.20 to my annual dividend income. The increase of $4.20 is equivalent to investing $120.00 of my own money at a 3.5% yield.


Summary:

As of June 1 2018, the value of the portfolio is $111409.75. This is a 3.62% increase over last month's total. The spreadsheet investment tab above has been updated.
 
Disclosure: Long AW.UN, BMO.TO, WJA.TO, CNR.TO
 
Please Note: All stocks are from the Toronto Stock Exchange except TTR which trades on the Venture Exchange.

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.