Option Trades - Update

The 3rd Friday of each month is always an option expiration day. Some stocks have options that are weekly. I had 3 options that were set to expire on Oct 21, 2016.

There was rally in the price of gold lately, which pushed the price of IMG.TO over $5 per share.

       -3 Put IMG.TO $5 Oct 21 2016  =  $53.05 premium collected
       -3 Call IMG.TO $6 Oct 21 2016 = $ 38.05 premium collected

 I previously wrote a covered call in Potash Corporation on the Toronto Stock Exchange

       -2 Call POT.TO $23 Oct 21 2016 = $88.05

In these 3 option trades that expired, I get to keep the premium of $179.15 as seller of options get to keep the premium regardless if market goes up, down, or sideways.

With the price of IMG.TO trading near $5.50 a share on Friday, I decided to write a covered call with Nov 18 2016 expiration date. I sold 3 call contracts with a $6.00 strike price to collect a premium of $41.05 after commissions.

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 Dividend Increase

 As an investor in a dividend growth stock, what is that I look for as an investor?  As an investor, I look for a history of dividend growth.  On October 20th, Transforce Inc (ticker symbol : TFI ) released its earnings for their most recent quarter. Some of the highlights are as follows:

• Operating income of $72.4 million, or 8.1% of revenue before fuel surcharge; solid year-over-year improvements in Package and Courier, as well as in LTL
• Adjusted net income from continuing operations* of $56.4 million, or $0.60 per diluted share*, versus $48.6 million last year, or $0.48 per diluted share
• Free cash flow from continuing operations* of $81.3 million, or $0.88 per share*, a portion of which was returned to shareholders through the repurchase of common shares ($41.8 million) and dividends ($15.8 million)
• Quarterly dividend increased 12% to $0.19 per share from $0.17 previously 

•  Revenue before fuel surcharge from continuing operations of $897.4 million

Transforce Inc. is a North American leader in the transportation and logistics industry, that is headquartered in Montreal, Canada.  They operate across Canada and operate through subsidiaries in the United States.  Transforce Inc. operates in various sectors as follows:

• Package and courier
• Less-than-truckload
• truckload
• logistics

 Conclusion

The annual dividend rate of Transforce Inc was increased from $0.68 per year to $0.76.  This represents an increase of 11.76%.  What are the chances of getting a raise of 11.76% in a year at a job? Most jobs people never even get raises.  The might get a cost of living increase, which they interpret as a raise.  Personally, I do not consider a cost of living increase a raise as everyone usually gets this regardless of when they started to work at the particular company.  I currently own 50 shares of this company, so that means my annual dividends received increase by $4.00 for doing absolutely nothing. This is equivalent of investing $114.29 of my own money at a 3.5% yield.

Disclosure:   Long TFI

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.

CIBC - Dividend Analysis

          Canada has 5 big banks which are often regarded as some of the best banks in the world.  These banks are Royal Bank of Canada (RY), Bank of Nova Scotia (BNS), Toronto Dominion Bank (TD), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CM). The ticker symbol for each of these banks is in parentheses.

           Today, we are going to focus on Canadian Imperial Bank of Commerce, commonly know as CIBC.  CIBC has been paying dividends in 1868 and that year is not a typo.  CIBC has not missed a dividend payment in 148 years.  Therefore, CIBC has been paying dividends longer than any current human has been alive.  These dividends are coutesy of the investor relatons site of CIBC and represent the value in Canadian dollars.

Year                   Annual Dividend Amount  2000                  $1.290    2001                  $1.440  2002                  $1.600  2003                  $1.640  2004                  $2.200  2005                  $2.660  2006                  $2.760  2007                  $3.110  2008                  $3.480  2009                  $3.480  2010                  $3.480  2011                  $3.510  2012                  $3.640  2013                  $3.800  2014                  $3.940  2015                  $4.300  2016                  $4.750 As you can see the dividend has increased each year from 2011 to 2016. During the sub prime melton which lead to the global recession, CIBC did not reduce its dividend, but it also did not raise its dividend from 2008-2010.  The other 4 big banks in Canada did the same with no dividend increase or decrease in basically the same time frame.  With the dividend increasing this much, this also causes the price of the stock to rise as people want the yield.  In order to keep increasing the dividend, the bank has to increase earnings each year as dividends are paid from earnings. Compound Annual Dividend Growth Rate from 2000 to 2016  is  8.49%. Compound Annual Dividend Growth Rate from 2010 to 2016  is  5.32 % Everytime the dividend is raised, an investor gets a raise that is usually higher than you would get at a job.  When the company raises its dividend, an investor does not do anything besides remaining a loyal shareholder.  A dividend growth investor invests in companies that pay dividends and increases their dividend yearly, which helps them to reach financial freedom quicker. Disclosure:  Do not own any shares of C.I.B.C. 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.