Recent Buy

You walk down the frozen section of any supermarket you will likely see High Liner Foods products under the High Liner Brand or another brand.

High Liner Foods is in the business of frozen fish products in the grocery story and provide fish products to restaurants. One of the most successful businesses in the world is McDonald's. High Liner Foods provides the fish burgers to McDonald's for the Filet-O-Fish sandwiches. 

High Liner Foods reported there earnings in the morning on August 14.
 
The President and CEO, Rod Hepponstall, has this to say:

"The Company's financial results for the second quarter of 2018 reflect continued challenges in the business related to soft sales volume, a shift in product mix from higher margin value-added products to lower margin commodity products, raw material cost increases not fully passed along to customers and inefficiencies in our supply chain.  The impact of these challenges in the second quarter was most acute in our U.S. business."

Second quarter (ending June 30 2018) Highlights ( all numbers in USD unless noted).
 

• Sales increased $12.9 million to $245.3 million of Q2 2018 compared to $232.4 million in Q2 2017
• Gross profit increased by $5.5 million to $43.3 million in Q2 2018 compared to $37.8 million in Q2 2017
• Net income increased by $2.2 million to $2.8 milliion in Q2 2018 compared to $0.6 million in Q2 2017 and diluted EPS increased to $0.08 in Q2 2018 compared to $0.02 in Q2 2017
• Adjusted Net Income decreased by $2.3 million to $3.8 million in Q2 2018 compared to $6.1 million in Q2 2017. Adjusted Diluteed EPS decreased to $0.11 in Q2 2018 compared to $0.19 in Q2 2017.
• Canadian-Equivalent Adjusted Diluted EPS decreased to CAD $0.14 in Q2 2018 compared to CAD #0.26 in Q2 2017
• The net interest-bearing debt to rolling 12 month adjusted EBITDA was 5.6x at June 30, 2018, which is roughly the same on end fiscal 2017.

High Liner Foods trades on the Toronto Stock Exchange under ticker symbol HLF.TO. The company is headquartered in Lunenberg, Nova Scotia.
 
High Liner Foods reports its earnings in US dollars approximately 75% of sales are in the US.
 
The CEO says the company is in the process of re-structuring to make the company operate more efficient. This will be a huge positive going forward, so the stock price should rebound in the next 12 months.

Warren Buffett says, "Be greedy when others are fearful, and fearful when others are greedy".
 
Prior today I owned 200 shares of HLF.TO at an adjusted cost base of $16.06 per share. After earnings the share price fell about 15% which led me to place a limit order. My bought 90 shares at $7.70 for a total cost of $698.27 including commissions.
 
HLF.TO currently pays an annual dividend per share of $0.58 Canadian. Therefore the yield on this purchase is 7.46%. This purchase adds $52.20 to my annual dividend income.
 
I will update my investment tab portfolio with this purchase in early September.

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

         I have owned Dream Office REIT since 2013 inside my margin account. Dream Office REIT was formerly Dundee REIT. The REIT recently reported earnings during the last week.

• Net income  for Q2 2018 was $25.386 million compared to $32.521 million for Q1 2018, which represents a decrease of 21.9%.
• Net income of Q2 2017 was $34.556 million. The 2018 Q2 net income represents a decrease of 26.5% from same 3 month period of 2017.
• The diluted funds from operaton (FFO) was 0.40 for Q2 2018 compared to 0.46 for Q1 2018, which represents a decrease of 13.0%. 
• Diluted FFO of Q2 2017 was 0.53.  Therefore Q2 2018 FFO of 0.40 represents a decrease of 24.5% for the same 3 month period. 

      The distribution has been decreased a few times over the past couple of years. The distribution on Feb 2016 was $2.23992 per unit annually and then was  decreased 33% to $1.50 per unit annually starting March 2016.  The distribution was again decreased to $1.00 per unit annually on Aug 15 2017 payment date.  The second distribution represents another decrease of 33.3%.  Overall, the distribution was decreased by 55.4%.

        As shown above, the REIT has a couple of tough years.  With interest rates rising over the last year and the recession in Alberta started in late 2014 effected their bottom line. In fact, during the recession the office vacancy rate in Calgary, Alberta was around 33%.  That was like entire floors of office buildings were vacant.  Although Dream Office REIT did not have a large portfolio of Alberta properties, it did affect them. The REIT did sell some Alberta properties over the last couple of years. 

    On Aug 9, I sold all 631 units of Dream Office REIT inside my margin account. When you own units of a REIT, some of the distribution payments are in the form of Return of Capital. The return of capital is substracted from adjusted cost base and therefore gives you a bigger capital gain or smaller capital loss when you sell.  My capital gain is $2113.76 which included the ROC up to end 2017.  So the ROC on distributions received in 2018 will not be known until a tax slip is generated the end of March 2019.  So the capital gain will be even higher that the current $2113.76.

   This sale also pays off my margin loan of approximately $9600 at 7.2% interest rate.  That interest rate is not a typo.

    This sale decreased my annual dividend income by $631.00.  

Disclosure:  Own 168 units of Dream Office REIT inside TFSA

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 Income Update: July 2018

      

        The month of July 2018 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.

       

 Non-registered Accounts 

• Bank of Nova Scotia (BNS) - $29.80 (Transfer Agent)
• Bank of Nova Scotia (BNS) - $16.40
• Bell Canada Enterprises (BCE) - $75.50
• Canadian Imperial Bank of Commerce "C.I.B.C" (CM) - $37.24
• Cineplex  (CGX) - $14.50
• Dream Office REIT   (D.UN)  - $52.58 
• Enerplus (ERF)  -$ 5.58
• Restaurant Brands International (QSR) - $58.59
• Rogers Communications Class B (RCI.B) - $96.00
• Shaw Communications (SJR.B)    - $19.75

Subtotal :  $405.94

TFSA

• A&W Royalties Income Fund (AW.UN) - $5.24
• Boston Pizza Royalties Income Fund   (BPF.UN) - $26.91
• Cominar REIT (CUF.UN) - $10.80
• Dream Office REIT   (D.UN)  - $14.00
• Horizons Natural Gas Yield ETF (HNY)  - $6.75
• iShares 1-5 yr Laddered Canadian Corporate Bond ETF (CBO) - $0.57
• Killam Properties REIT (KMP.UN) - $  16.11
• TFI International (TFII) - $10.50

Subtotal:  $90.88

Total = $496.82

    I received a total of $496.82 in dividend income for the month of July 2018.  I almost made $500.00 again after surpassing $500.00 for the first time last month.  This represents a 0.408%  increase from 3 months ago and 9.58%  increase year over year.  

    I received $54.05 from option premiums within my investment accounts in July 2018.

    AW.UN increased their distribution 2.17%, which is come into effect for the July distribution that gets paid August 31.

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

How was your dividend income for July 2018?

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.

Portfolio Update - July 2018

The month of July is now behind us. The big news in Canada is the start of the new PC government in Ontario, Canada having a session in the legislature.  The Doug Ford led Progressive Conservatives won a majority on June 7 2018.  A few weeks later the cabinet was named and the legislature was recalled for a session to start July 11 2018 to get down to business. This government is hoping they can restore confidence in Ontario and make Ontario the economic engine of Canada.

NAFTA is still not settled between United States, Canada and Mexico.  The markets continue to march higher even with oil falling to below $70.00

The government of Canada in May announced $4.5 million deal acquire the assets of Kinder Morgan Canada. That deal is expected to be done by August.  As of this time of this writing, the deal has not been finalized.  The government of British Columbia, the western most province in Canada, are going to court to stop the expansion of the Kinder Morgan Pipeline.

The price of a barrel of crude oil for West Texas Immediate is trading at $68.58 US.   Why do I keep mentioning the price of oil?  Energy companies make up a large percentage of the capital markets in Canada.  Also, the economic engine of Canada is Alberta, mostly to the oilfields directly or indirectly.

Portfolio Activity

During the month of July, there was 3 options trades started. During the month of June,  I made 2 options trades at the beginning of the month and one towards the end of the month.

Rogers Communications raised in value to above the strike price and stayed there.  Noticing the stock price was not receding to below the strike price of $65, I put a buy to cover order to closed the option and keep my shares.  The lost on this option trade was $395.10.

Restaurant Brands International (QSR.TO) has increased in value and I wanted to keep my shares. The strike price of was $82.00. So, I sent in a buy to cover order to close the option trade.  The lost on this option trade was $251.90.

The  naked 2 put option contracts in WestJet Airlines (WJA.TO) with a strike price of $17 expired, and I keep the $68.05 in premium.

In July, I "rolled" my trade in QSR.TO by selling a coverd call with a strike price of $88 and Aug 17 2018 expiration date. I collected a premium of  $54.05 after commissions.  The stock is trading  at $82.56.

I sent a personal check to the transfer agent for Bank of Nova Scotia.  The shares purchased this way are purchased with no commissions. This is the old, old way of purchasing shares.  The downside, you have no control over the purchase price of the shares.  I purchased 4.244999 shares of BNS.TO at $76.5607 for a total of $325.00.  Bank of Nova Scotia currently pays an annual dividend of $3.28 per share.  Therefore, this purchase adds $13.92 to my annual dividend income.  The yield on cost of this purchase is 4.28%.

Finally, the drip was turned on for High Liner Foods (HLF.TO).  The stock has been trading a lot lower over the recent months.  High Liner Foods over frozen fish products under High Liner and other named brands.  Also, High Liner Foods provides the fish burgers for McDonald's Filet of Fish sandwiches.

Shares Purchased Via DRIP

 0.387545 shares of BNS.TO @$76.8944 for a total cost of $29.80 (transfer agent)

As stated above, Bank of Nova Scotia pays a $3.28 per share per year dividend.  Therefore, this purchase adds $1.27 to my annual dividend income. The yield on cost of this DRIP is 4.27%.

Dividend Increases

A&W Revenue Royalties Income fund (AW.UN.TO) increased their distribution from $1.656 to $1.692 per unit annually.  This represents an increase of 2.17%.  I currently own 38 units of AW.UN.TO.  This distribution increase adds $1.37 to my annual dividend income.  This distribution increase is the second one in under 6 months.

Summary:

As of August 3, the value of the portfolio is $117380.88. This is a 2.54% increase over last month's total. The spreadsheet investment tab above has been updated.

Disclosure: Long all mentioned stocks

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.