The price of oil continued to dropped a lot over the last month. Oil currently trades at $50.72 for a barrel of WTI barrel of crude oil. This is not enough to create a wide spread panic but fear in Canada is starting. Currently, the price of a barrel of Western Canada Select is under $12.00 per barrel. The reason for this is for a few reasons. Currently, our pipelines are at capacity and the railways have limited ability to move the oil without affecting the ability to move other products like grain less efficient.
Alberta is considering taking action. In fact, they said they are in talks to purchase or lease rail cars to move the oil. Currently, our only foreign buyer of our oil is the United States. Shipping by rail is a lot more expensive and more dangerous than transporting though a pipeline. Alberta is considering the low price of Western Canada Select as a crisis. Companies in the energy sector have started to lay people off and this is on the heels of people who have been out of work for 3 years due to the Alberta recession caused by low world oil prices.
Later today, Sunday Dec 2, the premier of Alberta will make an announcement. It is believed that they will lower the production of oil in Alberta which will likely increase the price of Western Canada Select. Some companies have started laying people off such as Trican Well Services. Trican has laid off 70 in one week and said they will lay 70 more people in the following week.
General Motors has announced they are restructuring and will close all plants in Oshawa, Ontario. This will mean the loss of about 14000 jobs. This is a big blow to the economy of Oshawa when the plants are expected to shut down. General Motors are planning to cut jobs and possibly close plants in the United States as well.
Portfolio Activity
On November 12, I decided to sell the 121 units of Horizon's Natural Gas Yield ETF (HNY.TO) after the ETF increased in value. The net proceeds of sale was $1547.41. This sale was in my TFSA.
On November 19, I took this $1547.41 and the cash in my TFSA to purchase of 17 shares of Royal Bank of Canada (RY.TO) at $94.14 per share for a total cost of $1605.39 including commissions. Currently, Royal Bank pays a dividend of $3.92 per share per year paid out quarterly.
The RY purchase adds $66.64 to my annual dividend income. The yield on this purchase is 4.15%. The yield on the ETF was higher, but sometimes you have to step back to move forward. Royal Bank if a dividend growth stock as they have been increasing their dividend semi-annually for the past several years.
Shares Purchased Via DRIP
1 unit of CUF.UN.TO @ $10.82 for a total cost of $10.82 (TFSA)
Cominar REIT (CUF.UN.TO) currently pays an annual dividend of $0.72 per unit. This DRIP purchase adds $0.72 to my annual dividend income.
Dividend Increases
On November 8, Telus Corporation (T.TO) announced a dividend increase of $0.02 per share per quarter, or $0.08 annually. The annual dividend was increased from $2.10 to $2.18 per share per year. This represents an increase of 3.81%.
I own 124 shares of T.TO, so this increase adds $9.92 to my annual dividend income.
Summary:
As of December 2 , the value of the portfolio is $114461.43. This is a 3.53% increase over last month's total.
Disclosure: Long RY.TO, T.TO, CUF.UN
Please Note: All stocks are from the Toronto Stock Exchange except TTR which trades on the Venture Exchange.
Please Note: Positions in Restaurant Brands International (QSR.TO) and Brookfield Renewables Partners (BEP.UN) pay dividends and distributions in US dollars, respectively. My investment tab spreadsheet displays the Canadian dollar equivalent within 15 to 20 minutes of real time.
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.
Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.
nice port. Good breakdown of the oil problem and the gm closing. That will definately hurt Oshawa. sucks to see.
ReplyDeleteNice buy of royal. I was debating buying it, but got to get my other bank positions topped to drip.
seems like a good month
cheers
Passivecanadian,
DeleteRoyal was one of the stocks that I screwed up in the past. I owned like at $44.00 per share and it was called away in a covered call assignment. I would like to increase my ownership of the banks. What is not to like? Stable dividends and these banks have no trouble making their dividend payments.
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