We Love Our Cellphone’s – New Purchase

cellphone

We Love Our Cellphone’s – New Purchase

Good morning. With the weather all snowy and gloomy in mid April, I thought I would spend some money. I always feel pretty good after putting more money to work for us. Seriously though, spring can come any moment.

As you probably know I love to drip my stocks and essentially put them in cruise control. Some stocks of mine don’t have enough cash to enable a full drip but with time I’d like to get them all to drip. This purchase bumps up one of my position’s in my portfolio. I have been debating what to do for awhile and hoping the market would pull back on all the recent news. It seems this market can’t get shook. So might as well throw more cash at it slowly.

I wanted to add to my communication sector as its lagging behind currently. Shaw is a full position, so I won’t be adding there. I keep hearing negative news about their short term future, but think its overblown. We all know how hard it is to get into the cell phone business in Canada. Generally it has always been the big 3 – Telus, Bell and Rogers. Shaw is a new player who should really add some needed competition and has a tonne of potential in the future.




The Great Debate

O.K. so the debate eliminates Shaw. I really don’t care to much for rogers personally to be honest as we don’t do business with them. (I love buying stocks we actually use) We use bell for my cellphone (virgin mobile) and our house internet. My wife uses Telus for her cellphone.

I already own 35 shares of Telus but the stock has basically been going sideways lately while Bell fell back a bit. I was debating selling our position in Telus and moving it all over to Bell, since it seems to offer a better price at the moment. Bell has a nicer Yield currently of 5.57% vs Telus’s 4.53% but bell has already boosted their dividend while Telus hasn’t this year yet. Telus 5 year average growth rate sits at 10.1% vs Bell’s 5.3%. If telus boosts their dividend 10% this year it would bring their yield to 4.97%

Telus holds a 14 year dividend growth streak vs Bell’s 9 years. I think on a dividend front both companies are extremely close. While Bell’s yield may be higher now, with Telus’s dividend growth history that could be passed soon enough. Bell’s P/e ratio is lower at the moment though at 17.4 vs 18.1

As you can see it’s a pretty close debate. I know from personal experience Telus has waayy better customer service though, and in the battle for customer’s this is going to be a major factor in the future.

While reading a fool.ca article comparing Bell and Telus, I came across this stat of Telus though. Telus has increased its wireless average revenue per user for 28 straight quarters. Yup 7 years straight! That sealed the deal, time to add to our Telus position.

The Buy

Yesterday I decided to purchase 24 additional shares of Telus for a price of $1060. This will add $48.48 in forward dividends and also brings our yearly forward dividend’s over the $5,000 mark. That is just awesome. Unfortunately our total position in Telus won’t drip a full share yet but I intend to add to Telus before their next ex dividend date. With the possibility of Canada raising their key interest rate, I decided to dollar cost average to see what the price is next month.

Conclusion

Well there it is, my retail therapy… haha! I don’t see cellphone’s going anywhere in the future. If anything people will be spending more on crazy phones and bigger data plans. I can leave home without my wallet (if I don’t need it) but if I forgot my cellphone, I got to go back and get it. We hit the 5k dividend mark and added more shares of a solid company, Today was a good day.

Whats your thoughts? Are you reading this on your cellphone now?

Cheers!

Go Leafs Go!

Hey I’m Rob, creator of Passive Canadian Income.

In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey!

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18 Responses

  1. Nice buy Rob, I’m a big fan of Telus and Bell.

  2. Also a Big Leafs fan. Great win last night)
    I am also a big fan in investing in companies one uses. I usually say to people if you don’t like your cable bill, buy the company. It acts as a hedge.
    That is the ‘buy what you know’ type of strategy. I own my bank, gas utility and cell provider etc. etc.
    Cheers!

    • Rob says:

      Hey Peter

      Yeah for sure huge win last night. Great to get a couple penalty kills too and really nice to see them hit and not be afraid to get hit. They beat them at bostons game. Hitting!

      I say the same thing. People whine company x is soooo big how did the govt let them get that big… ahhhh just buy them and own them!

      Plus i dont mind the bills as much……… I said as much. Lol

      Cheers!

  3. Stefano says:

    I sold my shares of Telus. I found there debt was to high, when the interest rate goes up, they will go down again. That might be the time to buy

    • Rob says:

      Hey Stefano

      Thats true their debt is a little high. I thought they would drop in January when interest rates went up and telus barely moved.

      Did you buy any one of the other telecos with the proceeds of the sale?

      Cheers

  4. Alana says:

    Why yes, I am reading this on my cellphone…you’re a psychic!

  5. Leo T. Ly says:

    The big three pretty much got the Canadian market cornered. If you don’t subscribe to their main brand, they each also have another brand to serve you. I currently own BCE, but wouldn’t mind owning any of the three telcos.
    Leo T. Ly recently posted…How To Reduce Investment Risks With A Ladder Bond StrategyMy Profile

  6. I’m reading this from my laptop, while sipping some hot coffee from Starbucks… I do have a smart mobile though… will re-visit your blog often and comment…

    Happy regards from Bucharest, Romania
    Codrut Turcanu recently posted…Australian Dream Review 2018 – the Good, the Bad & the UglyMy Profile

    • Rob says:

      Hey Codrut

      Always cool seeing readers from the other side of the world! Welcome

      Im sure all these starbucks shareholders would love hearing that. Glad you enjoy the site.
      Cheers

  7. Nice buy! I will look into Telus and Bell this year so I don’t have any exposure in telcos. You’re right about the cell phones and data plans in general. With APPS we have today, 1G or 2G plans won’t cut anymore. People will eventually sign up for 6G or 8G data plans to support bandwidth those apps use. So eventually the ARPU will increase too. Both Telus and Bell are nice companies and eventually I will buy both, probably this year.
    Dividend Income Stocks recently posted…Purchased more shares of AltaGas (ALA.TO)My Profile

    • Rob says:

      Hey German

      If you don’t have any, for sure you should. Always nice to stay diversified. Just keep in mind teleco’s might drop in price as interest rates rise.
      Cheers man!

  8. Hey Rob, I like the telecom stocks, but stick to the big US providers VZ and T for the most part. They are good, steady income sources if not the fastest growers. Tom
    Tom @ Dividends Diversify recently posted…Build Your Wealth | Part 1My Profile

  9. I don’t know about Canadian telcos, but U.S. telcos tend to be steady and safe dividend stocks. I’d imagine it’s the same thing in Canada?
    Troy Bombardia @ Bull Market recently posted…Simple trading strategy that generates 17.2% per yearMy Profile

    • Rob says:

      Hey Troy

      Yeah I think of telecos alot like utility’s. Most people need their phone and internet these days. So its pretty consistent.

      Cheers

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