Apple Technology

I Doubled My Apple Position Post-Earnings

Purchases

On February 8th, I added 11 shares of Apple (NADSAQ: AAPL) to The Dividend Beginner’s portfolio. I purchased the shares at $131.75, with a trading cost of $6.95 for a total investment of $1,456.20. Unfortunately this was all the $USD that I had left in my account.

To add more U.S. stocks to my portfolio I’ll have to convert my $CAD at an awful rate… still, I see much more growth coming out of the U.S. than Canada, at least in the near term. I also don’t see very much upside to our currency other than if there was a sudden large increase in the price of oil, while the U.S. will have lower taxes and higher rates propel it’s dollar.

Apple posts record results

Apple, in it’s 2017 Q1 press release announced they had, “posted all-time record quarterly revenue of $78.4 billion and all-time record quarterly earnings per diluted share of $3.36. These results compare to revenue of $75.9 billion and earnings per diluted share of $3.28 in the year-ago quarter.” (apple.com)

While I had high conviction at the complete end of 2016, when I first bought Apple stock – my first tech investment – the great results made me even more optimistic on this name. There are many catalysts that can propel Apple’s share price and total returns, and you can check out those reasons in my previous article.

Pushing all-time highs

While many were touting that the stock price had already increased so much and it was dangerous, it continued to climb and is now at $135.72; and I don’t see it stopping. Even though it just recently pushed all time-highs, that’s the way things are supposed to go. From one high to the next. It appears Warren Buffett quadrupled his investment in Apple in the last quarter, it was discovered from his filings.

Apple is a growth play for me as the dividend is below 2% (1.68% right now), while the majority of my portfolio yields 4% – 6%+. Not to mention, being a Canadian, I am automatically deducted 15% in U.S. tax withholding on those dividends.

Yield on cost lowered to 1.83%

By purchasing the last 11 shares for a cost basis of $1,456.20, my yield on cost was 1.72%.

In my first purchase of Apple last month for 12 shares at a cost basis of $1,409.39 , my yield on cost was originally 1.94%

Now with 23 shares and an average cost basis of $2,865.71 – $124.60 per share. With an annual dividend of $2.28, my final yield on cost is a paltry 1.83%.

This $US position is worth $3,752.79 CAD, the 4th largest position in my portfolio.

Dividend Income increased 1%

My new shares in Apple Inc. add $25.08 USD to my annual dividend income, or $2.09 averaged per month. AAPL has increased their dividend consecutively for 4 years since it was reinstated in 2012 after being cut in 1995. The corporation maintains a very conservative payout ratio of 26.68%, and shouldn’t have any problem increasing it for years to come.

Before Net Increase After
Annual Dividend Income $2,516.99 $25.08 $2,542.07
Monthly Dividend Income $209.75 $2.09 $211.84
Percentage Increase +1.00%
YTD Increase +1.70%

Keep in mind. When calculating my annual / monthly dividend income, I use a 1 : 1 ratio for converting USD to CAD to keep it simple (it also keeps things even more conservative).

Stock Watch List

Stock Watch List for February 2017

Watch List

As we watch the market rise and fall, sometimes we see a big drop – the perfect opportunity to push some capital into the market and make some dividend growing investments. However, when this happens, many will watch and become lost in the vast amount of opportunities and potential investments. Which one is the best fit? Which one has the greatest expected dividend growth? These exact queries are the reason it’s so incredibly useful to make or follow a stock watch list every month, so when opportunities present themselves in abundance you know where to put your money.

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Passive income

January 2017 Dividend Income

Dividends

And so 2017 starts off strong as I record my highest ever monthly dividend income. I would consider the contributions I made throughout last year incredibly successful to have propelled me from where I was last year to today. It was my first full year of investing and I’ve learned a lot. I don’t doubt for one second that I may learn just as much, if not more, this year around.

I regret that I did not invest for the month. My late purchase last month in Apple was settled in January so perhaps I didn’t feel to as much as I should have. I would like to be investing every month rather than every so often like I ended up doing last year. It would require more time invested in analyzing potential companies though.

While the year started off without newly invested capital, Enbridge Income Fund came through with the best dividend raise I’ve received since the inception of the portfolio.

Summary of January Investment Activities

Throughout January, I’ve purchased:

  • Nothing

One of my holdings increased their dividend.

None of my holdings were sold to recuperate capital.

None of my holdings reduced their dividends.

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Enbridge Income Fund

Enbridge Income Fund’s Dividend Shoots up 10%

Dividend Raises

On January 5th, “Enbridge Income Fund Holdings Inc. (TSX:ENF) (the “Company”) announced that its Board of Directors has declared a cash dividend of $0.1711 per common share of the Company (“Share”) to be paid on February 15, 2017 to shareholders of record at the close of business on January 31, 2017. This represents a 10% increase in the monthly dividend over 2016.” (enbridgeincomefund.com)

I just recently bought some more ENF last month as I thought it was attractively valued. I consider it a very safe, sit-and-relax position that I can reap very large dividends from. Not to mention they are committed to a shareholder-friendly dividend growth program like the parent company Enbridge.

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December 2016 Dividend Income

Dividends

So the year 2016 has come to an end and so does tracking the year. I’ve greatly improved the way I track all of my investment purchases, dividend raises, and dividend income and growth this year. I know exactly how my investment journey has benefited my passive income cash flow, and ultimately, my net worth and sustainability in relation to expenses.

This past month I’ve finally boosted my dividend income to an average of over $200 a month. It took 22 months to get to this point but it’s become practically clock work to me now and is very feasible for me to continue this journey.

The writing makes it a little more difficult and takes by far the most time, but I get a lot out of it myself and it forces me to think a lot of my decisions over as I’ve forced accountability on myself by sharing this with all the readers. If you’ve been a dedicated reader on the blog here, I truly thank you for making this all possible up to now. Thanks to you, I’ve recently organized to renew the web site for a 3-year period in 2017.

Best of luck to everyone in 2017, I hope the market continues to roar forward and our dividend income can collectively grow and we’re all one year closer to financial independence.

Summary of December Investment Activities

Throughout December, I’ve purchased:

One of my holdings increased their dividend.

None of my holdings were sold to recuperate capital.

None of my holdings reduced their dividends.

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Apple Technology

My First Tech. Investment: Apple (AAPL)

Purchases

On December 28, I initiated a position in Apple Inc. (NASDAQ:AAPL). I purchased 12 shares of AAPL for $116.87 each, with a trading cost of $6.95 for a total investment of $1,409.39 USD.

Interestingly enough, this was my one and only U.S. stock purchase for the year of 2016. I converted a bit more of my CAD to USD at the same time because I need some more geographic diversification to my portfolio, as well as the fact that the U.S. market has much larger corporations which address a niche simply not available for purchase through the Toronto Exchange.

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TransAlta Renewables

Attaining over $200 a month thanks to TransAlta Renewables (RNW)

Purchases

On December 23rd, I added 110 shares of TransAlta Renewables Inc. (TSE: RNW) to The Dividend Beginner’s portfolio. This time around I paid $14.15 per share, whereas I first invested in RNW in May for $12.32 a share.

Renewable energy in Canada has a good deal of tax subsidies and with energy becoming more expensive again, it will be worth it to continue investing in these technologies. I like TransAlta Renewables as it does this, and stands under a more mature parent company, TransAlta Corporation where it receives many drop-downs. In essence, it could be classified as a yieldco at this point, just like my previous investment in Enbridge Income Fund Holdings.

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Enbridge Income Fund

Scooped up More Enbridge Income Fund Holdings (ENF)

Purchases

On December 19th, I added 43 shares of Enbridge Income Fund Holdings. (TSX: ENF) to The Dividend Beginner’s portfolio.

With Trump taking the reins soon and interest rates going up again, I’ve modified my approach a little bit, as I look into sectors which may benefit as a result. According to CIBC,

If history is any indicator, should U.S. rates continue to rise steadily, as anticipated by CIBC Economics, then the cyclical sectors – technology, energy, consumer discretionary, industrials & materials – should fare far better than defensive sectors – consumer staples, telecom, health care & utilities.

While I have not yet decided whether I want to increase my exposure to oil development, I thought that ENF would provide a much less risky attempt at gaining some income from this environment.

This is the second time I invest in ENF, as it’s a nice way to extract very decent income on a monthly basis from a great parent company, Enbridge. I’m not so much a fan of the metrics that ENB boasts, but do like where the company is going. So, for the time being, I parked some money into ENF.

Yield on cost lowered to 5.76%

Considering I paid $34.80 per share of Enbridge Income Fund Holdings, I scored a yield of 5.36%, paid out monthly.

I first bought 50 shares of ENF in March for $30.01, which was a yield on cost of 6.22%. Factoring in my transaction costs, I now have a total cost basis of $3,010.80 for 93 shares. With the annual dividend of $1.866, my shares bring in $173.54 of income. All in all, this equals a total yield on cost of 5.76%.

Dividend Income increased 3.50%

Before Net Increase After
Annual Dividend Income $2,295.24 $80.24 $2,375.48
Monthly Dividend Income $191.27 $6.69 $197.96
Percentage Increase +3.50%
National Bank of Canada Logo

National Bank of Canada raises dividend 2%

Dividend Raises

On December 2nd, the Board of Directors at National Bank of Canada announced “a dividend of 56 cents per common share, up 1 cent or 2%, payable on February 1, 2017 to shareholders of record on December 28, 2016” (www.nbc.ca)

Before Net Increase After
Annual Dividend $2.20 $0.04 $2.24
Monthly Dividend $0.183 $0.004 $0.187
Percentage Increase 1.82%

National Bank was one of my smallest investments made, and yet bears the largest gain at over 55%. That was an unfortunate combination, but this Quebec-based company continues to deliver dividend raises and so I will hold on to my shares and perhaps add more when the market valuation drops and the dividend returns to my large yield-on-cost. At the time, however, it appears that banks with exposure to the U.S.A offer more upside (Royal Bank, or TD).

Dividend Income increased 0.05%

Considering the Dividend Beginner portfolio contains 30 shares of NA, my annual income from NA has increased by $1.20, from $ 66.00 to $67.20. My 12-month forward dividend income has increased from $2,294.04 to $2,295.24, an increase of 0.05%. My income from NA accounts for 2.7% of my annual dividend income.

While a $1.20 increase in annual dividend income seems quite low, think about how it would require an investment of $29.48, at a yield of 4.07% (NA’s dividend yield) to generate $1.20 in dividend income. That’s the equivalent of getting one to three hours of your life back, depending on your wage.

Before Net Increase After
Annual Dividend $ 2,294.04 $1.20 $ 2,295.24
Monthly Dividend $191.17 $0.10 $191.27
Percentage Increase 0.05%
Dividends November 2016

November 2016 Dividend Income

Dividends

November was an incredible month for dividend raises. The Dividend Beginner portfolio registered FIVE dividend raises from various companies. This is one of those months where the methodology is really paying off and showing something. As the positions get bigger, so will the result of the raises.

In addition to that, a few more positions continued to be dropped from the portfolio as I eased up in some areas to further concentrate in others in the coming year. My portfolio is now down to 21 positions which I would enjoy investing in further given the right conditions. I would like to further rearrange my real estate exposure, but that’s in the future.

Summary of November Investment Activities

Throughout November, I’ve purchased:

  • Nothing!

Five of my holdings increased their dividend.

Two of my holdings were sold to recuperate capital:

None of my holdings reduced their dividends.

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Disclaimer

My publishings on dividendbeginner.com references an opinion and is for information or entertainment purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. I am not responsible for any decisions you make concerning finances, taxes, or investments. You must perform your own research and always take caution when extending capital.