Month: May 2015

Side Hustle: Released My First Mobile Application

Side Hustle

Today I come bearing fruitful news: I’ve released my first mobile application to the Google Play Store.

As some of you may know, from when I briefly introduced myself in one of my first posts, I’m a programmed by trade. Since I was 10 or so I knew that I wanted to program video games when I grew up. It all seemed like a distant dream back then, but dedication and hard work make everything and anything possible.

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Telus Raises Their Dividend

Dividend Raise: Telus (TSE: T)

Dividend Raises

I meant to write about Telus’ dividend raise from May 7th a couple times but figured I’d compile any dividend raises into one post by the end of the month. I had a bit of time on my hands and so I decided to do a minor analysis of their dividend raise and what it meant in relation to future raises and payout ratios.

Telus (TSE: T) raised their quarterly dividend by 10.5%  (compared to last year’s second quarter dividend) to $0.42 per share on May 7th. Telus’ quarterly dividend for the end of last year’s second quarter was $0.38 per share.

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Plaza Retail REIT

Recent Purchase: Plaza Retail REIT (TSE: PLZ.UN)

Purchases

Good evening fellow investors and would-be investors,

On  Friday I purchased shares in another REIT in my TFSA: Plaza Retail REIT (TSE: PLZ.UN). I bought 260 shares of Plaza Retail REIT at $4.43 each, with the CIBC Investor’s Edge trade fee this purchase comes out to a total investment of $1158.75 – which was all I had in my TFSA at the time.

PLZ.UN pays a 5.64% dividend, which equates to an annual dividend of $0.25 per share. Considering I purchased 260 shares, this means my investment in PLZ.UN will increase my forward twelve month dividend income by $65.00. Considering PLZ.UN is an REIT and pays dividends monthly, I will be receiving $5.42 every month from this company. 

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Dividend Stock Analysis: Atco Ltd (TSE: ACO.X)

Stock Analysis

Good evening readers,

Ever since I started these dividend stock analyses I’ve felt like I’ve learned quite a bit about reading and understanding different stock metrics. Like my blog title, I am a dividend beginner, and I’ve decided to open up my entire journey here for others to see, read about, and hopefully inspire.

As I begin to analyse stocks more thoroughly instead of simply watching and reading about what others may be doing, nodding my head in agreement, and throwing money into companies – I’ve come to realize It’s not a bad thing to have cash lying around, waiting for the perfect investment to come along rather than investing in a series of companies that will do average or a bit better.

The price point at which you enter a company is important. It determines how much appreciation you may muster, and how much difficulty the stock may have in pushing the price higher, so looking for value in the stock price is intelligent – unless you want to be an enterprising (growth) investor, in which I’m definitely not the guy to tell you about, as I’m not interested so much in capital appreciation – where one month you can be rich and the next month poor; unlike with the uncertainty of capital appreciation, dividends paid are cash in your pockets; not a fluctuating digit.

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Dividend Stock Analysis: TransCanada Corp (TSE: TRP)

Stock Analysis

Hey guys,

It’s time for another dividend stock analysis as I search for the next good company I can trust to grow my money for decades to come. TransCanda  Corp (TSE: TRP) is under the spotlight today.

According to the Dividend All-Stars list, TransCanada Corp has increased their dividends without fail for the past 14 years. If I put that into a bit of perspective, TRP has been paying share holders more and more in dividends every year since I was 7 years old. I’d say that’s a good indication as any that the dividend will continue to grow in the future.

Now let’s dive right in: “TransCanada Corporation (TransCanada) is an energy infrastructure company. The Company operates through three segments: Natural Gas Pipelines, Liquids Pipelines and Energy. Natural Gas Pipelines and Liquids Pipelines consist of natural gas and liquids pipelines in Canada, the United States and Mexico, as well as its regulated natural gas storage operations in the United States.”

So just like Canadian Utilities Limited (TSE: CU), TRP is focused in energy and pipelines. However, CU has a broader range of diversification in its operations which means, in theory, it may perform better as crude oil prices still face uncertainty.

TRP is currently trading at $53.61, down 16.05% from it’s 52-week high of $63.86 and up 8.74% from it’s 52-week low of $49.30. As an investor, I like to see that it is trading closer to it’s 52-week low rather than it’s 52-week high. This represents a better price at which to initiate a position in TRP. It is currently trading at a P/E (TTM) of 22.1, which is above the P/E of 20 which is the most 8I would be wiling to pay.

Thomson Reuters has a 12-month mean price target of $62.00 on the stock, which would represent a 15.90% stock price appreciation. They also have a 12-month high price target of $68.00, and a low of $54.00. Currently they’ve attributed a Hold rating on TRP, which is right on the edge of a Buy signal.

TRP pays an annual dividend of $2.08 per share. This represents a very attractive yield of 3.88% in relation to its $53.61 share price. Currently, TRP has a payout ratio of 80.91% which is pretty high and on the edge of what I’d be willing to accept. However, with it’s 14 year yield growth track record I could not imagine them cutting the dividend – and I’d hope they don’t freeze it.

TRP had a concensus estimate of $0.66 EPS for Q1, which was met in their announcement on May 1st, 2015. Two days after this announcement, however, the stock price fell nearly $-0.91 to $55.34, and has since fallen further. I’d watch the price fall quite a bit more, at least to drop the P/E to below 20 before initiating a position. Investors have been a little erratic ever since the NDP majority vote in Alberta, and all the new regulations they are planning to implement which would make these companies less profitable. The price may fall further in accordance with this as well.

TRP has an annualized 10-year dividend growth rate of 5.17%, and a 4.78% 5-year annualized dividend growth rate. Now, assuming TRP continued at a 5% annualized dividend growth rate from 2015 to 2025, the yield on cost would be 6.35%. This means that by investing now at TRP’s 3.88% dividend yield, if they continued raising their dividend at a 5% average for the next 10 years, you’d be receiving an attractive 6.35% dividend yield based on the cost you paid today.

Looking at TRP’s 1-year chart, it appears to be a volatile stock making large strides up and down. The best time to invest would be when it’s in one of the trenches of its chart. However, by looking at the 5, 10, and All-Time chart, the stock prices has floated up and up.

TRP is definitely a long-term dividend-growth oriented investment, which would be nice to pick up on a downward trend which could happen with the price of crude oil and the NDP majority vote in Alberta. Though, as with the stock market as a whole, is completely unknowable.

And that’s that for another dividend all-star, we’ll pick up again real soon with another 10-year+ dividend grower!

Dividend Stock Analysis: Canadian Utilities (TSE: CU)

Stock Analysis

Canadian-Utilities

I figured it was time I did a bit of stock analysis without making purchases for a change, just to scout the market. I’ve jumped into the investment game and I’m sure I could benefit from a bit of research, and I’d really like to come up with a list of stocks I’d like to invest in once I have the capital.

I follow a dividend growth model – a way to ensure that I receive income regularly, and that the income will grow year-after-year as I sit tight and hold onto these growing companies. I’d like to do my own analysis of a series of stocks which are considered Canadian Dividend All-Stars. As described on his site, “The Canadian Dividend All-Star List is comprised of Canadian companies that have increased their dividend for 5 or more calendar years in a row.”

Considering there are quite a few Canadian Dividend All-Stars listed here, I’d like to focus in on the ones with the most successful dividend growth streaks. Why? Because when a company has payed out an increasing dividend for 41 years (Fortis Inc.), I’m sure they would not dream of ruining their incredible streak. In this case, I’d like to focus in on companies which have raised dividends for a minimum of 10 years.

I already own two companies which are listed in the 10 year+ section of the Dividend All-Stars, which are Telus Corporation (TSE: T) and SNC Lavalin Group Inc (TSE: SNC). You can read about my analysis and purchase of SNC.

Today I’ve decided I’m going to take a look at Canadian Utilities Ltd (TSE: CU). I enjoy reading other dividend growth bloggers’ posts, and one of my favourite bloggers is Dividend Hustler, who just recently purchased shares of CU.

For a brief description of the company, “Canadian Utilities Limited is engaged in Utilities, such as pipelines, natural gas and electricity transmission and distribution, and Energy, such as power generation and sales, industrial water infrastructure, natural gas gathering, processing, storage and liquids extraction.”

CU is currently trading $36.76, only $0.26 above it’s 52-week low of $36.50 – which is very attractive. As I mentioned in my previous post on my purchase of Goldcorp Inc (TSE: G), “The fact that the price is so close to the 52-week low and far from the 52-week high is a good thing; meaning the stock has a large amount of space for growth”. CU has a 52-week high of $44.27. Thomson Reuters has a mean 12-month price target of $43.30, with a low expectation of $39.00 and a high of $47.00. I really like how they have a low 12-month expectation of $39.00 / share, which is higher than the stock is currently trading at.

CU pays an annual dividend of $1.18, which equates to a 3.21% yield. The 5-year yield average is 2.76% however, meaning that since the stock price has gone down but the dividend payment has remained the same / grown, you are getting more for  paying less. CU has increased dividends for 32 years without fail. I can count on this company to continue paying me more and more every year regardless of the economy.  In fact, during the financial crisis in 2008, CU raised their annual dividend from $0.67 to $0.71 (6% growth). CU currently has a very safe dividend payout ratio of 42% in 2014, and 48% for the most recent quarter (0.295 dividend / 0.61 earnings per share).

Given all this information, there’s a lot to love with CU. The dividend payment is safe and has grows consistently for decades. This is the type of company you can buy and hold for years and years and enjoy the growing dividends coming in.

However, they recently announced their 1st quarter results for 2015 which were deep in the red, missing estimates by -27.57%. A consensus estimate was given for an  EPS of $0.68, while actual earnings were $0.49 / share. The stock price dropped from above $40 to $36.76 now. Thomson Reuters has given CU a hold rating and I agree with this, however I lean strongly towards the buy side. I may initiate a position if the stock prices drops a little bit more to reflect the large miss in estimated EPS.

Regardless of whether this is bought later or right now, Canadian Utilities Limited (TSE: CU) has a lot to offer to a dividend growth investor: from it’s 3.21% yield to its 5-year yield growth rate of 8.70%, to having grown dividends for over 3 decades. It is currently in a bit of hiccup, but that only means it’s on sale and can go on further liquidation.

 

Recent Purchase: Goldcorp Inc (TSE: G)

Purchases

Hello!

Today I purchased 65 shares of Goldcorp Inc (TSE: G) at $22.60, for a total investment of $1,469.00. I’ve been watching Goldcorp ever since I started investing a month and a half ago and the price has dropped a decent bit; enough for me to initiate a position in it as the yield went up to 3.18% at the time I purchased. Another reason I purchased my shares today is because the ex-dividend date is tomorrow, May 12th.

For those who may not know much about investing, the ex-dividend date is the day on which you must own shares of a company to receive the dividend paid. You must purchase the shares the day before the ex-dividend date to be recorded as a shareholder, and you will receive your dividends on the payment date in your brokerage account.

Goldcorp pays US$0.05 (CAD$0.06) per share in dividends monthly. I was itching for another monthly dividend stock and as I’ve been watching Goldcorp for a little while, I thought it was time to jump in. The stock has a 52-week high of $32.32, and a 52-week low of $19.18. The fact that the price is so close to the 52-week low and far from the 52-week high is a good thing; meaning the stock has a large amount of space for growth. Goldcorp will add $3.90 to my monthly dividends, which adds up to $46.8 per year.

Thomson Reuters has a 12-month expected mean value of $25.50 per share, which would amount to a 36.1% increase over the current price; and currently advertises a Buy rating on the stock. Goldcorp also has a forecasted EPS growth of 31.5% for 2015, and 39.2% for 2016.

Considering gold is a hedge on inflation, the stock should hold up pretty well when interest rates do rise. I’d prefer holding a gold mining stock rather than simply gold; especially for the dividends which have a decent yield.

The 5-year yield average is 1.18%, meaning Goldcorp is currently extremely undervalued as it has a 3.18% dividend yield. Since the price of the stock has dropped so much, while the dividend payments have remained the same the yield is expressed as a higher value since you are getting more for paying less. Goldcorp also boasts a 27.23% 5-year yield growth rate, which is absolutely great. Although it has remained constant in the past couple years, they have not dropped their dividends – which I’m happy enough with.

This was my first purchase in my non-registered account. There’s a fee on this account if I don’t have $10,000 in it by September so I’m cracking down on this and giving the TFSA an unfortunate break (They raised the TFSA limit only after I opened the account!).

Anyways, that’s a wrap; happy dividend investing everyone!

April 2015 Dividends

Dividends

April was my first full month of investing in the stock market. I started buying shares in companies around Mid-march, and so some of the dividends I would have naturally received this month will be pushed over into May… so I will be seeing a nicer payout from dividends next month. Although, after receiving my first month of dividends I can see how this dividend growth investing strategy can really work out and earn a good deal of money which will consistently grow over time.

I could list a million things I’d love to spend my investment gains on, but will be disciplined in reinvesting all of it into my dividend machine to earn more and more as time goes on  and lead me to an early retirement.

Ticker Symbol Dividends Received
VUN 11.66
D.UN 8.4
HR.UN 4.95
TOTAL 25.01

So for my first month of investing I’ve received $25.01 in dividends. This does not include any capital appreciation ($250+ for this month) and I would not like to rely on capital gains due to their liquidity.

I had bought shares of Pengrowth Energy Corp (PGF), Dream Global REIT (DRG.UN), Pure Industrial REIT (AAR.UN) and Temple Hotels (TPH) pretty much on their ex-dividend dates rather than before in March so did not receive their dividends which would have amounted to roughly another $25, but will see them next month as these are monthly dividend payers. When I first started investing I fell in love with REITs and the thought of monthly dividend payments, but invested only in quarterly-paying dividend growth stocks this month, as I added shares of Bank of Nova Scotia (BNS), SNC Lavalin Group (SNC) and Telus (T).

Hopefully some good purchasing opportunities arise for the month of May, or I may hold off as I’m starting to wonder when a market correction is due with all the talk of rate hikes. Anyways, only time will tell here and I look forward to documenting more of my journey as I embark on it.

Thanks for reading everyone!

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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.