Stock Watch List – May 2019

May 2019 - Stock Watch list

May 2019 – Stock Watch list

Hey everyone.

First off, I’d like to apologize for no posts last week. This was the first time in over 2 years that I didn’t do a weekly post. Life has been crazy busy. Also a book that I rented from the library was due and I couldn’t renew it, so I was forced to focus on finishing it off.

The Compound Effect – by Darren Hardy was a fantastic read and shows you the power of your habits and how we should all start to take control of both the good and bad habits we have to improve our life.

Anyways, it’s raining yet again! Soo much rain here in Ontario this spring. So I have some time to catch up on the website, stocks and random house errands.

The Market

The trump effect strikes again and the market has been seeing quite a bit of red again. A 25% tariff is a big deal and these trade wars aren’t good for anyone. Well they are good for us buyers! Prices are starting to slip down but aren’t screaming buys.

Facebook groups I’m part of generally seem really bearish, people tend to be hoarding cash. Reminds me a bit of December last year and we aren’t even close to those levels. Things can continue to drop in price or China and the US can create a new trade deal and the market will flourish…

As always though I don’t believe in Market timing or setting target prices on certain stocks. (I have been burned before just hoping a stock would drop 2 bucks to hit my “target” only for it to shoot right up before hitting that price)

Like every other month, its steady eddy. Throw money into some great dividend growth stocks and watch that portfolio compound, while the dividend income grows.

My Current Sector Weighting

This is a snapshot of our current portfolio allocation. When I look at others, generally Utilities and Financials aren’t the 2 highest sectors. I got a bunch of utility stocks when they pulled back on rising interest rates. I thought they were a great buy and figured the economy couldn’t support rising interest rates. (especially in Canada) So they have done very well for me as the tide changed to slow things down.

Financials – Well I just love these Canadian Banks and wanted to get both BNS and TD dripping for me.

Awhile ago I mentioned I wanted to get back to what I used to do. Focus on our 4 lowest sectors. That 0% basic materials kinda bugs me a bit… Although I do own a bit of physical precious metals.

My communication sector got destroyed on the sale of Shaw so most likely that’s where I’ll be deploying some money, but who knows until that money is in the account and ready to be put to work.

I would like to contribute to our kids RESP account this month. It currently holds CNR, Canadian utilities, Enbridge and Inter pipeline so a phone company or even nutrien would be a nice fit.

Then again 3m keeps dropping in price and I’d love to increase that holding, so maybe the money will go into the rrsp.




Stocks

So I basically mentioned which stocks I’m interested in buying at the moment. Bell, Telus, Nutrien or 3m.

Bell (Bce)

This stock seems to be a staple for most Canadian Dividend Investors, but yet it’s one that I have no position in. I personally use virgin for my cellphone and they are pretty good. So they are already getting a pay cheque from me every month, I might as well start getting paid from them. They currently offer a dividend yield of 5.3% which is pretty huge. Their 5 year average dividend yield is 4.83%. They have a p/e ratio of 18.8x and are not to far off their 52 week high of $60.99 though…

The metrics don’t scream out buy me, but they are a solid blue chip company and one that would fit very nicely into our kids RESP account. Our kids won’t need the money for another 12-18 years and Bell should continue to do well in the future.

Telus (T)

I currently hold Telus and its now our sole position in this sector. It currently makes up 3.7% of our total portfolio, so I can throw some money into them but I try to keep positions under 5%. My wife’s phone is Telus and they are great to her. They are known for their customer service. Last quarter they added 99k new subscribers and raised their dividend %3.21. (They tend to raise their dividend twice a year and target a 7-10% increase until 2022) They currently offer a dividend yield of 4.58% which is lower than Bell’s but they tend to grow it faster than Bell’s 5%. Telus has a p/e ratio of 18.2 times and is pretty close to their 52 week high as well.

I personally think this is Canada’s best Teleco to own and love the addition of their health segment as well, but it would be nice having more than 1 teleco in the portfolio.

Nutrien (NTR)

I sold this one when we needed to buy our first new car at just over 70$. This is a great company with a tonne of potential, especially if potash prices increase. They are the world’s largest crop nutrient provider.

The stock currently trades at $67.84 and has been falling since they missed analysts expectations last quarter. I really hope it continues to fall as I’d love to get back into this one. Morning star has this valued at $79.31 and a really strong buy at the moment. In this market its nice to see that. They currently have a p/e of 11.54 and sport a dividend of 3.3% that gets paid out in US dollars. While this is not a proven dividend growth stock, I have a feeling they may just turn out to be one.

3M (MMM)

I figure I’ll include 3m in here as well, although its not as likely to be purchased as one of these other 3. One of my goals this year was to start or increase a position in either 3m, Pepsi and JNJ. I bought some 3m last month and the stock has continued to drop. This is one of the best dividend growth stocks on the market and currently offers a yield of 3.28% and a P/e of 18.8x

It seems to be getting dragged through the dirt as some people are even comparing it to GE. I bought at 190 and some members were saying I bought to early and they may buy at 165. I thought that was crazy but here we are at 173 and its still in bearish territory. Good call from them!

Their last couple of quarters haven’t been the greatest but this is a solid brand and I think they will continue to do well moving forward.

Time to Make Some Money

Well there we have it. Our May 2019 – Stock Watch list

4 Stocks that are on my radar to purchase some time this month. Bell and Nutrien would be new positions for us, while the other 2 would be just beefing up their positions.

I’m curious to hear your thoughts. Especially on the telecom’s. Would you be a buyer of either of them at these prices, if so which one? How low do you think 3m can go?

Have a great day.

Cheers!

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12 Responses

  1. May says:

    I have BCE, MMM and NTR on my watch list too. I also want to buy some MG. MG is pretty volatile and right now very close to 52 week lows.

    There are other stocks I want to buy but right now very expensive. COSTCO, VISA, MSFT, AMAZON, APPLE, BAM.A, TRI and CSU.

    • Rob says:

      hey May

      Great minds think alike?

      Nice list you got there as well. I have always wanted to add Magna as they seem very shareholder friendly and i got some friends who work for them.
      Im a little sketchy about the car industry at the moment though… So many new cars on the roads these days… They do have the electric model deals in place with china though which could be really good but then again all this trade tension with china isnt good.

      Im curious to see how this week go’s in regards to the market.

      cheers May!

  2. German says:

    You listed very strong companies that are hard to choose from! Bell is ok for income, but Telus is great for grow! I guess just pick the one that has the best deal at the moment, but eventually you want to own them all. It’s like banks, eventually you want to own them all 🙂

    • Rob says:

      haha

      Good point German. I agree telus has better growth prospects as well.
      Hopefully the market drops nicely in the coming weeks.

      What are you thinking of buying?

      cheers German

  3. PCI –

    Seems like you have a great watch list. Chemical companies have been beat up pretty bad, may want to take a look at them, as well. Such as EMN and LYB!

    -Lanny

    • Rob says:

      Love it Lanny

      Thanks! Ill look into them. Id love to add apd and was debating them at 160 and then they skyrocketed!

      one day…. haha cheers man

  4. German says:

    I will probably add to one of my banks or brookfield’s, depending on the ex-div date. Haven’t looked at stocks for a few weeks. I’ve been busy hustling around. 🙂

    • Rob says:

      haha nice German.

      Got to love the banks. Right now they are overweight for me so i need to focus on other sectors.

      Brookfield is solid and id love to add bip as well one day.

      Gotta love the hustle.
      cheers man!

  5. May says:

    I have bought some NFI yesterday. Attracted by the high yield and low pe. Almost pull the trigger on Magna today and scared back by some articles saying that automobile cycle is at the end and the new trend of the world is less cars in the future.

    What do you think about Magna? It looks quite cheap right now and I am really intrigued.

    • Rob says:

      I think cars will have a slow down but less cars in the future? I cant see that. Citys keep expanding and i dont think public transit keeps up.

      In big citys like Toronto, yeah it sucks to drive, those are walking and transit citys.

      Electric will be the next boom for cars and magna has some connections for that.

      Long term magna will do great but short term their maybe a better price.

      Its not a bad price now, if you want them id buy a third position and in a couple months buy another tranche. etc etc

      They seem to be a very shareholder friendly company atleast.
      cheers May!

  6. Thanks Rob, I’m too old for increased unpredictability and uncertainty of a Nutrien. It can perform at the whim of foreign governments and price fixing etc? Can’t say I know much about the space though. One would have to perhaps be an industry expert as well to select it for a concentrated portfolio? But if one is somewhat replicating an index with mostly full diversification then we’d go for it.

    I am a meat n potatoes investor and would not know how to analyze a company beyond the big financial long term picture and any moat and obvious sector probabilities. Nutrien looks to be all over the place on the basic financials of revenues and dividends and cash flow and earnings and more. Nothing moving in a consistent and positive direction. We’ll have to see with that merger thing. Ha. I remember being in Potash and XMA back in the accumulation days.

    Being ‘semi retired’ I’ll have to stick to my wide moats and oligopolies 🙂 Banks, pipelines, telco’s. I’d add rails and groceries and Brookfield and Couch-Tard and a few utilities if I was looking to diversify 🙂

    Dale

    • Rob says:

      hey Dale

      Haha great points. Nutrien can become pretty cyclical in nature. I do think the merger of both them will kind of even that out and make it a little more stable than potash previously was. As we continue building, reducing farmland and even more dope farms start up fertilizer will be a even more important ingredient in the future. (well i think at least)

      There’s no question the core of your portfolio should be built around those “meat and potatoes kind of stocks” I slowly improving to “beef” our portfolio up!

      Haha cheers Dale!

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