Doubling a Position – 33 More Shares
Thought I would I give you an update with our most recent purchase. This market is definitely getting tougher and tougher to find a deal but recently certain groups of stocks came under a little pressure and dropped in price.
The Canadian telco’s for instance dropped a bit on the rogers – shaw takeover news.. I really don’t think this deal will go through as it creates less competition again in Canada. That tends to be a political sticking point as we pay some of the highest wireless plans in the world and I don’t see why they would allow things to revert back to just the big 3. Either way for some reason both bce and telus dropped on the news. (It really makes no sense as less competition would be good for them)
Utilities have dropped on rising interest rate news. As you probably know I’m a massive fan of renewable’s and was really debating adding to our Algonquin power position at this time. Utilities are a huge part of our portfolio though and I always like to focus on lower sectors/holdings when I can. Maybe we will get another purchase in before the end of the month and add to them though. In this quick changing landscape one thing for certain is the need and also demand for more renewable’s.
Another goal of mine for 2021 is to add more low income – high dividend growth positions. While it’s great getting that initial income up, dividend cuts are higher on the larger yields and dividend growth sometimes isn’t the best. Look at both 3m and Canadian utilities this year both with 1% or lower raises..
It’s like me in a hot pink thong. You can see I tried and will probably put a smile on her face, but its nothing to get excited about..
Meanwhile companies like CNR, Microsoft and couche-tard are consistently boosting their dividend quite a bit. The capital appreciation is nice as well! Long term these will most likely surpass those higher yielding stocks for yield on cost. I plan on sprinkling in these kind of positions every once in a while as we continue to grow the portfolio throughout the year.
In the middle of January we started a position in Couche-tard (ATD.B) after the carre-fore news. Couche-tard dipped on the news and basically it was free money for everyone who bought at that point. We are up 11% already on those shares, but I think the stock still has room to grow/recover from here.
We hold this position in our kids resp and their account had 400 sitting idle from dividends and the government match since January. In no way do I want to see 400 sitting idle, not working for us. We added another $1000 to the account and ended up purchasing 33 more shares of Couche-tard. This adds a whopping $11.55 to that forward income.
As I said before lower yield but massive dividend growth. Couche-Tard sports an 11 year dividend growth streak and a payout ratio of only 11.11% In November they raised their dividend by 25% and they rock a solid 10 year dividend growth rate of 27.3%. 5 Year sits at 21.7%. You got to love seeing growth like that and such a low payout ratio.
I’m not going to get into Couche-tard too much as I just talked about them 2 months ago. They are a solid company with tonnes of cash, great management and have been very shareholder friendly.
Obviously the elephant in the room is their gas stations. With the move to electric cars how will they adapt? They have already started to install charging stations in their locations and I think gas will still be around for 10 more years.
Well there it is. Short and simple. Doubled our holdings in one of our smallest positions in our portfolio. Increased our defensive sector allocation and added $11.55 to that income.
In this market it’s easy to get distracted. You see stocks like game stock climbing once again and it’s tempting to jump over there, but we got a plan and got to stick with it. Buy great dividend growth stocks and continue growing that cash flow. Slowly but surely.
Have you been purchasing anything these days? If so what have you been buying?
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 by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
Good buy. We have CircleK fuel stations. Our largest and most advanced network 🙂 Small world eh 😀
My wife’s cousin used to live in the uk. His roommate was my babysitters daughter when I was a kid. Yup the world really is smaller than we realize.
I hold ATD.B for quite a while and bought at the year beginning in my TFSA and it’s still underwater. I have added it in my taxable account since the dip. Also added to BCE and Telus when they were down due to the Rogers news.
Well unfortunate about atd being underwater but they will bounce back once things open full force for sure. Nice that you took advantage of that telco dip, to me it really made no sense as they will benefit from less competition. (Although I doubt the deal will go through)
Keep it up, sounds like you are deploying a lot of your cash this year!
Interesting to watch you build a position in this one Rob, as ATD.B is one of the few you hold that I do not own. Will have to take a closer look at them in the coming months. I do wonder if the gas station model will really work for electric vehicles in the same way, given relative power prices & greater time required to recharge. Maybe in the future, “gas” stations will make most of their revenue from restaurants, refreshments & entertainments offered to people waiting 30-60 minutes for their electric cars to recharge, rather than from the power itself.
I have mostly been deploying capital from my sales of HYI (high yield bonds) and IPL, which meant a focus on replacing the lost dividends! I’ve settled on increasing positions in TRP, BCE, AQN, POW & KMP.UN, with a little bit of S&P 500 index ETF thrown in for good measure! Definitely there will be a lot of action to report on this month!
It will be interesting to see for sure. They have a network a large network of charging stations in Europe and are working on growing them here in Canada and the us. I think you are right in the switch of revenue. People will have to do something while waiting for the charge. Even if you sit in your car waiting maybe you would hop inside and grab some snacks or something.
Sounds like you have been making lots of moves in some great companies. Im a fan of the apartment space right now for sure, but gain that exposure through rit etf. Im interested to see if algonquin will drop under that 19$ mark. I will be focusing on that position then!
keep it up John!
Nice job, love it and keep that money moving!!
Gotta keep growing it
Just want to thank you for your research on LMT. I bought it based on your recommendation, and it’s up more than 10% already.
Glad its worked out for you/us. It has had a great run recently.
I’m thinking indeed to add more shares of Alimentation Couche-Tard this month for more growth/dividends and add more to my defensive sector which is weak now. Good deal for sure !
With the recent run of some stocks – couche-tard and telus are near the top of my list for this month at current prices too.