Portfolio Update - May 2019

The month of May 2019 2019 now behind us.
 
The new provincial government, the United Conservative Party  (UCP) , has been sworn in Alberta.  The UCP leader is Jason Kenny, who is now the premier.  Premier announced as expected that the first order of business is to repeal the Carbon Tax that was brought in by the previous NDP government of Alberta.

Although the bill to repeal the carbon tax has not been voted on, the carbon tax ended on May 30.  The bill will come to a vote on Monday, June 3.  The price of fuel had dropped very shortly after the carbon tax ended.

The federal government has yet to make a public statement about whether they will implement a federal carbon tax on Albertans. 

The Alberta government is also trying to pass an Open For Business Act that can affect a lot of things including holiday pay for employees.  From what I am reading, once this bill is passed a person will not receive any pay from a holiday unless they work on the holiday.  What is the point of having holidays anymore if you don't work on the day of the actually holiday?  So the employee will have less weekly pay for weeks that involve holidays.  The employer seems to be the one to benefit from this bill.  

The former Alberta NDP government announced they will lease rail cars to move Alberta oil via CP Rail (CP.TO) and CN Rail (CNR.TO).  The leasing of the rail cars is suppose to be a temporary solution as the government is hoping to start  the construction of the  Transmountain  pipeline expansion to the BC coast. 

Portfolio Activity

During the month of May,  a blockbuster announcement was made that Onex CEO Gerry Schwartz was buying WestJet Airlines for an all cash deal of $31 per share.  At the time of this announcement, WestJet airlines was trading around $18.00 per share. 

Before this announcement, I sold 2 puts in $WJA.TO on May 8 with a strike price of $18.00.  The expiration date for this trade is June 21, 2019.  I collected a premium of $78.05 after commissions. When the announcement was made that Onex is to acquire WestJet, the price of the stock shot up to around $30 per share.  So, the put option will not get assigned and I get to keep the premium.

 I still have an outstanding covered call on WestJet expiring July 19 2019.  The strike price is $24.00.  Currently, the option is trading at a very high price with the option way in the money.  I will monitor this to see if it goes down as I could buy the option back to keep my shares.  I do believe the sale will be approved by shareholders and will not be blocked by government.  

I purchased 50 shares of Intertape Polymer Group (ITP.TO) at $18.00 for a total cost of $904.95 including commissions on May 6. This purchase was in my margin account.  Intertape Polymer Group pays a quarterly dividend of $0.14 USD per share. As of the time of this writing, this purchase adds $37.92 CDN to my annual dividend income. 

I added to my Canadian Imperial Bank of Commerce "C.I.B.C"  (CM.TO) inside my margin account. On May 22, I purchased 12 shares at $107.90 for a total cost of $1299.79 including commissions.  CIBC currently pays a $1.40 quarterly, or $5.60 annually, per share dividend.  This purchase adds  $67.20 to my annual dividend income.  

On May 22, I also sold 3 $18 puts in ITP.TO with an expiration date of June 21, 2019. I received a premium of $92.05 after commissions.

The month of June, I will monitor the West Jet bid price for the $24 July 18, 2019 call option to see if goes lower.  If the short put on ITP.TO gets assigned, I will look to sell the position and start a new smaller position again. 

 Shares Purchased Via DRIP
 
1 unit of CUF.UN.TO @ $11.6535 for a total cost of $11.65 (TFSA)

I own 218 units of Cominar REIT (CUF.UN.TO). Currently, CUF.UN pays $0.72 per unit per year, or $0.06 per unit monthly. This DRIP adds $0.72 to my annual dividend income.

Please note that if some brokerages DRIP shares when there is no DRIP program by the actually company. This DRIP is when the brokerage buys the shares directly off the public market stock exchanges.
 
Dividend Increases

On May 9, Telus Corporation (T.TO) increased their quarterly dividend from $0.545 to $0.5625 per share. This is a 3.21% increase.  Telus has been raising their dividend twice a year for several years.  I currently own 24 shares of Telus inside my TFSA, so this increases my annual dividend income by $1.68.

On May 9, Cineplex (CGX.TO) increased their monthly dividend from $0.145 to $0.15 per share. This is a 3.45% increase. I currently own 100 shares of Cineplex, so this increased my annual dividend income by $6.00.

On May 29, Bank of Montreal (BMO) reported their quarterly earnings and increased their quarterly dividend from $1.00 to $1.03.  This is an increase of 3.00%.  BMO has been raising their dividend twice annually for the past several years.  I currently own 35 shares of Bank of Montreal, so this increased my annual dividend income by $4.20.


Dividend Decreases

On May 14, High Liner Foods (HLF.TO) announced a dividend decrease from $0.145 to $0.05 per quarter. This represents a decrease of 65.5%.  I currently own 306 shares of HLF.TO, so this decreases my annual dividend income by $116.28.

High Liner Foods stated they are trying to restructure their business and pay off debt. The import tariffs are also affecting their bottom line.  

Summary:
 
As of June 1 , the value of the portfolio is $123642.38. This is a 1.320% increase over last month's total.
 
The portfolio is estimated to produce $4897.22 in dividend income over the next 12 months.

The price of the call option on West Jet does not represent the exact bid price of the time of this writing.  
   
Disclosure: Long all aforementioned stocks except Onex and CP.TO.


Please Note: Positions in Restaurant Brands International (QSR.TO) and Intertape Polymer Group (ITP.TO) pay dividends in US dollars. Brookfield Renewables Partners (BEP.UN) pays distributions in US dollars. 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.