The month of March 2020 now behind us. Some major things have happened in the world, which affect the markets in some way.
The carbon tax in Canadian provinces that have a carbon tax instead of a cap and trade system increase from $20 to $30 per tonne on April 1. This represents an increase of 50%. Due to the COVID19 pandemic getting worse by the day, the price of gas has dropped significantly as businesses across Canada have ground to a halt.
The price of WTI oil fell to below $20 dollars a barrel during the past several days. This also caused Western Canada Select oil to fall below $5.00 per barrel. Western Canada Select (WCS) is basically the oil from the Oil Sands in Alberta. Of course, this has led to massive layoffs in the oil patch in Canada. Low oil prices, along with the COVID19 pandemic, is a double whammy for Canadian economy.
Countries around the world have had their economies turned upside down. In my honest opinion, we are in a recession currently. I believe if the pandemic continues on, we will be in a depression.
On a positive note, some companies have stepped up. 3M have stepped up production of masks for people on the front lines and for the general population. Grocery store workers are working in their stores as their management have stepped up with safety measures such as plexiglass at the cash register and security guards to help maintain physical distancing. Truckers have continued to work as we need truckers to bring food and other supplies to all regions.
In the news later, truckers have been having problems with rest areas in Canada and the United States to use rest rooms. Fast food places have closed to non drive-thru traffic for the most part. Tim Hortons have stepped up in recent days by opening their dining rooms and restrooms to truckers near major highways. Truckers have had a bad rap over the years, so I believe they should get more respect by the general public now.
Portfolio Activity
Margin Account Activity
On March 10, I averaged down in Enerplus (ERF.TO). I purchased 170 shares of Enerplus at $2.93 per share for a total cost of $503.30 including commissions. Enerplus pays a monthly dividend of $0.01 per share, or $0.12 per share annually. This purchase adds $20.40 to my annual dividend income. The yield on cost for this purchase is 4.05%.
Enerplus, is an oil and gas producer with assets in both Canada and the United States. It has been increasing their production in the United States, while at the same time decreasing their production in Canada the last several years. This is due to low oil prices and a more advantageous regulatory environment.
Cineplex (CGX.TO) is currently in the process of being taken over by Cineworld, which is based out the UK. Recently, Cineplex has closed their theatres due to the pandemic. This was done prior to governments bringing in stricter and stricter recommendations for people to stay own. On March 30, Cineplex informed the public that their theatres are other entertainment venues will remained closed indefinitely due to the COVID19 pandemic. Cineplex has put out a press release to update shareholders of the status of the Cineworld deal.
A UK based fund wants the Canadian federal government to stop the deal in its tracks due to the fiscal state of both Cineplex and Cineworld in this pandemic. Currently, Cineplex is trading at $10.88 per share. The sale is suppose to be $34.00 per share and Cineplex was trading at around $23 per share at time of the announcement of the proposed sale.
TFSA Activity
There has been no buys or sells in this account. I have not taken any money out of this account in several months.
Telus shares (T.TO) has split their shares 2 to 1. This means that for every share of T.TO that I owned, I would get 2 shares. So, I now own 48 shares of T.TO. With a 2:1 stock split, the share price gets cut in half and so does the dividend rate. My annual dividend income from Telus remains the same.
Shares Purchased Via DRIP
3 unit of BPF.UN @ $6.86826 for a total cost of $20.60 (TFSA)
1 unit of CUF.UN @ $11.1935 for a total cost of $11.19 (TFSA)
2 shares of ERF.TO @ $2.7735 for a total cost of $5.55 (Margin Account)
Currently, Boston Pizza Royalties Income Fund pays a monthly distribution of $0.102 per unit, or $1.224 per unit annually. However, the distribution has been suspended going forward as their restaurants have been closed except take-out or delivery. I own 239 units of BPF.UN. So, this suspension reduced my annual dividend income by $292.54.
Cominar REIT pays a monthly distribution of $0.06 per unit per month, or $0.72 per unit annually. This DRIP adds $0.72 to my annual dividend income. The yield on cost for the DRIP unit is 6.43%.
Enerplus pays a monthly dividend of $0.01 per share monthly, or $0.12 per share annually. This drip adds $0.24 to my annual dividend income. The yield on cost for this DRIP is 4.32%.
Enbridge, has suspended their DRIP program over a year ago. So, I receive a check in the mail for my Enbridge shares held directly with the transfer agent. If the DRIP program is re-instated, then my shares will DRIP automatically without any action on my part.
I have some other positions with the DRIP turned on, but might not have enough of a dividend to purchase a whole share.
Please note that if some brokerages DRIP shares when there is no DRIP program by the actual company. This DRIP is when the brokerage buys the shares directly off the public market stock exchanges.
Dividend Increases
There has been no dividend increases in March 2020.
Dividend Decreases
Cineplex has announced they will stop paying a dividend after the payment on February 28. This is due to the potential sale of Cineplex to Cineworld at $34 per share. This deal has the approval of both sets of shareholders and is subject to regulatory approval. Cineplex has closed all their theatres and entertainment venues due to the ongoing COVID19 pandemic. So, this cut is to be expected. I owned 160 shares of Cineplex. This cut reduces my annual dividend income of $288.00 per share.
A&W Royalties Income Fund announced on April 1, 2020, the suspension of the monthly distribution. In most provinces and states, their restaurants have been closed for in restaurant dining. Eventually, the doors are locked in most places and only service is the drive-thru. A&W paid a monthly distribution of $0.159 per unit. I owned 38 units of $AW.UN, so this suspension reduces my annual dividend income by $72.50.
Boston Pizza Royalties Income Fund pays a monthly distribution of $0.102 per unit, or $1.224 per unit annually. However, the distribution has been suspended going forward as their restaurants have been closed except take-out or delivery. I own 239 units of BPF.UN. So, this suspension reduced my annual dividend income by $292.54.
On my twitter account, I have stated I received 5 cuts or suspensions, so far. The fourth position that was cut or suspended in Mullen Group, which is a position that I am trading in my trading account. The fifth cut was Inter Pipeline (IPL.TO) is a position in Savings. Inter Pipeline reduced their dividend by 72% from $14.25 per share monthly to $0.04 per share monthly.
Summary:
As of April 4, 2020 , the total value of the portfolio is $95436.21. This is a 23% decrease over last month's total. This decrease is a result of the market sell off over the past couple of months.
The dividend decreases reduced my annual dividend income by $653.04.
The portfolio is estimated to produce an estimated $5145.90 in dividend income over the next 12 months. This is an decrease of $603.67 CAD , or 10.5%. Some of the dividends in the Canadian stocks section are paid in US dollars, which are converted to Canadian dollars.
Disclosure: Long all aforementioned stocks
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.
We have to believe this pandemic will end and we will get through this. Everyone must do their part, although it is hard when businesses are told to close their doors.
Did the pandemic change how you will live going forward regarding finances?
EDIT: April 4 @ 8:06pm MST The value of the portfolio was updated to the correct amount. I realized I forgot to substract the cash portion of trading and savings sections I have within my margin account. The corresponding decrease percentage is updated as well.
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.
