Month: February 2017

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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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.