In early December I decided to take money I received from Christmas and the distributions that I received so far from Dream REIT trade in my margin account and put it in a dividend growth stock. This stock that I have chosen is very safe to own and has paid dividend for a very long time.
On December 31, I purchased 18.090543 shares of BNS at a cost of $66.33 per share. This purchase is directly through their transfer agent, so for there is no commissions. This is the old way to buy stocks. I have no control over the price I will pay for these shares. I had to have my funds in early in the month. I currently have full drip on this stock. There was a discount of 2% of shares purchased with reinvested dividends, but was cancelled during the last year.
During the recent financial crisis, Bank of Nova Scotia did not reduce its dividend and kept it the same during 2009 and 2010. This company has paid dividends since its inception in 1832. In 2005, Bank of Nova Scotia annual dividend rate was $1.32 and has increased to $2.56 per share in 2014. That is a CAGR of 7.637 % over the last 10 years.
The dividend was raised twice over the last year. So the current annual dividend rate is $2.64 per share. This recent purchase adds $47.76 to my annual dividend income.
Note: My shares of BNS were purchased in Canada.
Do you own shares in Bank of Nova Scotia?
I will update my investing account tab spreadsheet in a few days to reflect this recent purchase.
Disclosure : Long BNS
Wednesday, December 31, 2014
Friday, December 26, 2014
Recent Sale
I recently wrote about a purchase of Boston Pizza Royalties Income Fund (BPF.UN) in my margin account. I also own 234 units in my Tax Free Savings account that I have owned since March 2010.
This fund pays a distribution monthly at the end of the month. In Canada, the rules for income trust were changed in 2011, after the announcement on Halloween 2006 by the finance minister at the time, Jim Flaherty. Companies that would remain as an income trust would have to pay a SIFT tax. The SIFT Tax stands for the Specified Investment Flow Through tax. You can read more about the SIFT Tax here. With income trust having to pay this tax, it meant it has less profits to pay out to unit holders. This was the reason why the distribution was reduced a few years ago. A lot of companies switched back to a corporation setup prior to this tax coming into effect.
My limit order of $21.55 was recently filled on Dec 22,2014. I also will collect the distribution payment at the end of the month in the amount $20.40 for the 200 units that I held .
Initial Purchase with commissions: 200 *21.23 + $4.95 = $4250.95
Distribution received = $20.40
Proceeds of Sale = $21.55*200 -$4.95=$4305.05
Profit =$4305.05-4250.95+20.40
= $74.50
Total Return on Investment = $74.50/$4250.95
= 1.753 %
Disclosure: Long BPF.UN inside TFSA still
DISCLAIMER
This fund pays a distribution monthly at the end of the month. In Canada, the rules for income trust were changed in 2011, after the announcement on Halloween 2006 by the finance minister at the time, Jim Flaherty. Companies that would remain as an income trust would have to pay a SIFT tax. The SIFT Tax stands for the Specified Investment Flow Through tax. You can read more about the SIFT Tax here. With income trust having to pay this tax, it meant it has less profits to pay out to unit holders. This was the reason why the distribution was reduced a few years ago. A lot of companies switched back to a corporation setup prior to this tax coming into effect.
My limit order of $21.55 was recently filled on Dec 22,2014. I also will collect the distribution payment at the end of the month in the amount $20.40 for the 200 units that I held .
Initial Purchase with commissions: 200 *21.23 + $4.95 = $4250.95
Distribution received = $20.40
Proceeds of Sale = $21.55*200 -$4.95=$4305.05
Profit =$4305.05-4250.95+20.40
= $74.50
Total Return on Investment = $74.50/$4250.95
= 1.753 %
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Disclosure: Long BPF.UN inside TFSA still
DISCLAIMER
Sunday, December 21, 2014
Recent Trade
On October 8, my limit order that I had placed on Sherritt International Corp was filled at $2.42 a share for 1500 shares. I never got around to writing a post on it.
Sherritt is a world leader in the mining and refining of nickel from lateritic ores with operations in Canada, Cuba and Madagascar. The Corporation is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licenses its proprietary technologies and provides metallurgical services to commercial metals operations worldwide. (Source www.sherritt.com )
As this was a trade, my exit strategy was to place a limit order to sell at $2.70 a share. With the recent announcement by President Barrack Obama that the United States improve relations with Cuba means possibly lower costs for the Sherritt's operations on the island and less restrictions traveling for its directors. This recent announcement by the US president plus the other details such announcing measures to possibly work with congress to the lift the full embargo lead to the huge rise in the share price.
Calculation of Return
Initial Investment with Commissions : 1500 *2.42 +9.95 = 3639.95
Proceeds of Sale : 1500*2.70-9.95 =4040.95
Profit = proceeds of sale - initial investment = 4040.95 -3639.95
= 400.10
Total Return = 400.10/3639.95
= 10.99 %
I am going to use this $400.10 to pay on my line of credit used for investing as the interest is high at 9.5%. The interest was initially around 7.6% but the bank raised it to over 10 %. I called about the increase and got it reduced to 9.5% awhile ago.
Sherritt is a world leader in the mining and refining of nickel from lateritic ores with operations in Canada, Cuba and Madagascar. The Corporation is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licenses its proprietary technologies and provides metallurgical services to commercial metals operations worldwide. (Source www.sherritt.com )
As this was a trade, my exit strategy was to place a limit order to sell at $2.70 a share. With the recent announcement by President Barrack Obama that the United States improve relations with Cuba means possibly lower costs for the Sherritt's operations on the island and less restrictions traveling for its directors. This recent announcement by the US president plus the other details such announcing measures to possibly work with congress to the lift the full embargo lead to the huge rise in the share price.
Calculation of Return
Initial Investment with Commissions : 1500 *2.42 +9.95 = 3639.95
Proceeds of Sale : 1500*2.70-9.95 =4040.95
Profit = proceeds of sale - initial investment = 4040.95 -3639.95
= 400.10
Total Return = 400.10/3639.95
= 10.99 %
I am going to use this $400.10 to pay on my line of credit used for investing as the interest is high at 9.5%. The interest was initially around 7.6% but the bank raised it to over 10 %. I called about the increase and got it reduced to 9.5% awhile ago.
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