New Purchase – First U.S Stock
First U.S Stock
After the long wait we have finally finalized our rrsp transfer. No more mutual funds! It is not too much since we basically used both our rrsp’s to help purchase our first house awhile back and haven’t focused on replenishing them. For awhile now I have been debating if it is even worth the current conversion rate between Canadian dollars to U.S Dollars. Ultimately though if I stay mostly Canadian equities we will be very limited in sectors.
I bit the bullet and made the conversion. I feel there are a lot of factors that could possibly lower the Canadian dollar more, of course that’s just speculation though. Also it would be great to start receiving some U.S dollars. I keep seeing other bloggers debating or making this purchase, which I fully support.
So what did I buy?
Yesterday I added a new position in General Mills – GIS. We bought 125 shares, enough to drip one per quarter if it stays at the current level. This trade benefits our portfolio in a couple ways. Before this purchase we had a 0.27 % position in the consumer defensive position. (yeah it needed work) It also diversifies us way more. One step closer to the goal of better global diversification.
At just over $57 US General Mills is basically at its 52 week low and also just over 21% off its 52 week high. I have been eating honey nut cheerios for as long as I can remember, Ok sometimes I get cinnamon toast crunch (also General Mills) but mostly my honey nut! There really is no better buys then companies you use on the regular. Its 3.3% dividend for a defensive stock is also really impressive. It has raised it dividend every year for the last 13 years and had paid dividends without interruption for 117 years. Can’t get much safer than that.
From what I understand the stock is down because people want less prepared food and they fell behind on their yogurt not jumping on the Greek yogurt trend. meh I prefer my fruit on the bottom cups =) This is a huge company and something like this pullback probably will fix itself up. I’m a long term investor and I feel its a great buy. It also adds 240$ in forward dividend income.
A Couple of their Brands…..
What do you think? Do you like the stock? Should I have not done the conversion currently 1$ Canadian = 74 cents US
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
I like your plan. I have many U$ stocks (no GIS…yet) that I accumulated during my working phase. I’m happy I did as I’m now retired and spend winters in PSP. I couldn’t buy them in my RRSP, as RBC d/s would convert to C$…so unfortunately I pay w/h tax and the divis are treated as int but the plan has won in other ways. I’m very well diversified, the divis pay my winter exps and the stocks have grown nicely over the years and even provided several successful spin-offs:)
Awesome to hear. IntrestING I have the rrsp in rbc and meant to call them about keeping the dividends in us currency. Hope it doesn’t kill the returns…. Glad to hear your living the dream.
I like GIS, the products and its brands. The stock price came down over the last months and looks interesting. Not cheap but reasonable. Last month I bought some stocks of J.M. Smucker and will certainly keep an eye on GIS.
Yeah actually I was surprised how many brands they actually owned! Thanks for coming by
PHENOMENAL Move! Love their brands, their dividend and history. Congrats on the MASSIVE purchase.
Thanks Lanny. Definately one of my biggest purchases to date. I’m happy with it
Nice buy. I am not entirely sure of the tax implications. I heard US would withhold 30% of the dividends & capital gains? You might have to file taxes in US to get it back? Is that a problem?
You might want to check out: http://home.personalcapital.com
No in a rrsp there are no withholding fees
Well done, nice pick, after all, look at the number of folks that eat cereal day in-day out, it’s like buying a gasoline stock or a toilet paper stock – these are regular consumables.
In 2010 the stock split 2:1. Your thoughts of what are you expecting from GIS say 12 months to five years from now?
Hopefully go up in price and keep increasing the dividends!a stock split would be sweet
I like defensive stocks that have a history of continuous dividend payments. It’s even better if you can buy it on sale. Gotta be greedy when people are fearful.
Yeah learning slowly but surely
I more of a Frosted Flakes kinda guy but my son loves his Cheerios so GIS future looks bright lol.. Great buy the currency exchange is a bit of a downer but when the stock appreciates along with dividend payments you will be fine in the medium to long term.
Thx Yardie. I was a frosted flakes fan but when I was a kid we went camping and i.poured myself a bowl and it was full of earwigs from sitting outside that night lol.
It is great that you started to look to the USA market.
By the way, do you have a strategy when you buy a stock? Usually, before I buy a stock, I am looking into the fundamentals, calculate the intrinsic value and I do not listen to the analysts opinions unless the stock will pass my requirements.
My two cents, I analyze a bit GIS stock and I found it overpriced, the intrinsic value is around $30, book value is over 8 and quick ratio is 0.5 which is too risky… also, the bussiness is flat almost no increase in earnings and the sugar products are seeing a decline.
Anyway I might be wrong in my assumptions…
Keep up with the good work.
I tend to look at their past stock price, dividend history, payout history, dividend increases. I read a lot but don’t analyze all their numbers. Obviously could be a mistake. Yeah things aren’t to good at the moment for processed foods but right now money is cheap. That will change and processed will be the way to go again in my opinion. 30$ dam that seems really low, ahhh well this is a solid company if it hits 30$ you will see my next post about me buying more. haha! No name honey nut cheerios just don’t cut it.
What is the most efficient way to buy US stocks with CAD? Did you just buy it from your trading account without caring much about the exchange rate?
Good luck with your journey!
Hey muki. Norbert gambit tends to be the best way. Buy a stock in Canadian dollars and sell it in your us account for us dollars. This limits the banks commissions. But you still pay 2 different trading fees. While the conversion is a big factor im a long term investor so it was worth it imo