Recent buys

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As some of you may recall, I was on the road a lot in November and December. Lucky for me, I find myself on the road again this week, spending a week in a luxurious beach resort near LA for company’s global sales conference.

It’s quite interesting the past three days sitting through PowerPoint presentation after PowerPoint presentation and listening to the different speakers on how to drive more revenue in the future. It’s really neat to be part of this kind of event and learn that the company is already looking 5 or more years ahead. It’s also very interesting to listen to the executives delivering amazing speeches and presentations. I have much to learn. 🙂

In other news, the stock markets remain very volatile the last few weeks. This has provided an excellent opportunity to purchase some dividend paying stocks and add to our portfolio.

We recently purchased the following stocks:

25 shares of TransCanada Corp (TRP.TO)
50 shares of Saputo (SAP.TO)
85 shares of Evertz Technologies (ET.TO)
70 shares of Telus (T.TO)
55 shares of Dream Office REIT (D.UN)
70 shares of H&R REIT (HR.UN)

Since I’m on the road I don’t have too much time to type up an elaborated analysis for each company. I will quickly go through my thoughts on why we decided to purchase these companies.

 

TransCanada Corp
This purchase was made to add to our existing position. TransCanada Corp price has dropped a little bit the last few weeks so this is a good opportunity to purchase shares at a discounted price. Although Keystone XL pipeline project remains to be in limbo, TRP has an established pipeline distribution network that will continue driving revenue for the company. Oil and natural gas will continued to be used no matter what the price is, and TRP is in a good position to provide the transportation option.

 

Saputo
Saputo is an interesting company for me as I want to add to more stocks in the consumer sector. Although the dividend yield is very low at 1.5%, Saputo has been growing dividend at 15% annualized rate for the last 5 years. In fact, last year they increased dividend by jaw dropping 39.7%! At 36.6% payout ratio, I expect the strong dividend growth to continue.

Saputo is in the dairy/cheese business. Primary markets are Canada, US, Argentina and Australia. The Company manufactures approximately 32% of all Canadian natural cheese. Considering the international exposure is limited at this time, I believe Saputo can grow their business quite significantly by expanding into Asia in the near future.

I’m a cheese lover so I’m very excited to be a part owner of the cheese making business.

 

Evertz Technologies
Evertz Technologies is an equipment provider to the television broadcast telecommunications and new-media industries. You might wonder why we are investing in a television broadcast company when I wrote a few posts on not having cable or TV at home. Evertz is not your typical television broadcast company. It designs, manufactures, and distributes video and audio infrastructure equipment which brings real-time video and replays to viewers of sporting events. As sporting events become bigger and bigger each year, Evertz’s equipment and technologies are posed to benefit. I’m a sports fan and I can see where real-time video and replays will be heavily used in professional sports like NFL, NHL, and NBA. Evertz fundamentals look good and most importantly, they have been able to grow their dividends for 7 straight years at a 5 year annualized growth rate of 19.7%. Last year Evertz raised their dividend by 14.3%.

 

Telus
This purchase is purely to allow us to start DRIPing our Telus holding. Telus remains to be one of the strongest brands here in Canada and have benefited greatly from the smartphone/data evolution. Since my last purchase of Telus, not much has changed. Telus is still one of the big three telecommunication companies in Canada and continues to have growing subscriber base. The company has also managed to keep their customers happy so they don’t switch over to the other Canadian carriers.

What’s more impressive is that Telus has been able to increase dividend for 10 straight years at a 10 year annualized rate of 16.3%. Considering Telus grew their dividend by 11.5% last year, I believe Telus should be able to grow dividend at a rate of round 5 to 10% annually for the next few years.

 

Dream Office REIT and H&R REIT
I bought these shares purely for dividend income purposes. With the additional shares, we should be able to DRIP two shares of both company each month, depending on the share price. This will help growing our future dividend income exponentially. Although there have been talks about interest rates hike, I don’t think such scenario is likely to happen for this year. With crude oil price very volatile and the economy shaky, it simply doesn’t make sense to raise the interest rates. Higher interest rates will harm the shaky economy and perhaps cause many countries to go back into a recession.

Dream Office and H&R REIT are some of the biggest REIT’s in Canada and both have well diversified properties. Our REIT’s sector breakdown is a little bit lower than the desired 15%, so adding some shares in the REIT’s sector will help us balancing our overall portfolio.

The purchases will add $415 into our annual dividend income. I have update our dividend portfolio to reflect these new positions.

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28 Comments

  • Reply
    Henry - Living At Home
    January 14, 2015 at 7:29 pm

    Saputo is on my watchlist. It’s a great company, just never been able to buy any at an attractive price.

    • Reply
      Tawcan
      January 17, 2015 at 8:37 pm

      Saputo has been on my radar for a while now but it just keeps going up and up. 🙂

  • Reply
    Dividend Diplomats
    January 14, 2015 at 11:03 pm

    Tawcan,

    BUSY MUCH?! H O L Y CRAP! That is quite a deployment of capital! I’ll have to read up on more of the companies you mentioned up there, but $415 is a huge addition to the income. Huge, I mean monsterous! This is awesome. I’ll post back once I read more, hopefully it’s not at 1AM though!

    -Lanny

    • Reply
      Tawcan
      January 17, 2015 at 8:40 pm

      Hi Lanny,

      Yup pretty busy this month and hoping to add more later this month too.

  • Reply
    Goosemann Jones
    January 14, 2015 at 11:29 pm

    Hi, Tawcan.
    BOOM! Nice job loading up the truck on some solid dividend payers. That’s a great start to the year. The market may move up and down, but the dividends will keep rolling in like clock work. Safe travels.

    Goosemann Jones
    Flight to Dividends Blog

    • Reply
      Tawcan
      January 17, 2015 at 8:41 pm

      Hi Goosemann Jones,

      Thanks for dropping by. Over the long run the markets generally go up, so this is a great opportunity to buy stocks a little bit cheaper.

  • Reply
    Jeff
    January 15, 2015 at 4:28 am

    Very interesting purchases Tawcan!

    I have TransCanada on my watchlist and was very close to adding a position to it but the unpredictable future of the pipelines made it seem risky. I’ll continue to keep an eye out for it though!

    • Reply
      Tawcan
      January 17, 2015 at 8:42 pm

      Hi Jeff,

      TransCanada should be OK in the future. Future is never predictable so all we can do is continue executing our investment strategy.

      Cheers.

  • Reply
    Roadmap2Retire
    January 15, 2015 at 7:53 am

    Some good purchases…although Ive never heard of ET before. Thanks for sharing.

    Thats a nice bump in annual dividends going forward. Congrats on adding more to your income stream.

    best wishes
    R2R

    • Reply
      Tawcan
      January 17, 2015 at 8:43 pm

      Hi R2R,

      I came across ET when I went over the Canadian Dividend All-Star List. I have been wanting to diversify into technology sector for a while now so this was a god opportunity.

  • Reply
    M
    January 16, 2015 at 1:29 pm

    Fantastic stuff Tawcan. Adding $415 to your annual income is something I can only dream of at present, especially since my goal for this year is only receive around $220 in dividends, when converted to US$

    • Reply
      Tawcan
      January 17, 2015 at 8:44 pm

      Hi M,

      We all start somewhere. I remember when I only received $220 in dividends a few years ago. 🙂

  • Reply
    dojo
    January 17, 2015 at 10:43 am

    Absolutely love this kind of articles: they inform and inspire. Keep up the great work and we’ll surely follow your steps as much as possible.

    • Reply
      Tawcan
      January 17, 2015 at 8:44 pm

      Hi Dojo,

      Thanks for taking your time to comment. Glad to have inspired you.

  • Reply
    NRG
    January 17, 2015 at 11:08 am

    Great Stuff Tawcan. Solid growth and value combined. I own all of the above except for Saputo. I am a little bit cautious of purchasing them because Canada may lift the dairy restriction to European countries which will allow them to send their much cheaper dairy products to Canada. Can hardly wait for dividend totals for January as I have been actively buying this drop also.

    • Reply
      Tawcan
      January 17, 2015 at 8:46 pm

      Hi NRG,

      Yes Canada lifting dairy restriction to European countries will be a concern but I’m not sure if all of a sudden we’ll see lots of European dairy products in Canada. Competition will force Saputo to be even more efficient and looking at expanding into other countries to continue driving revenue.

  • Reply
    Asset Grinder
    January 17, 2015 at 6:16 pm

    Good buys man. Own most of those except ET>TO. I will look into them. That is a big bump to your annual dividend income. NICE!!!!!!!

    • Reply
      Tawcan
      January 17, 2015 at 8:47 pm

      Hi Asset Grinder,

      Thanks. ET.TO is definitely a venture for me as this is probably not something on a lot of people’s radars.

  • Reply
    BeSmartRich
    January 18, 2015 at 7:04 am

    Great purchases. I enjoyed reading your post.

    I wanted to buy TransCanada however it went up quite a bit last Friday so I may have to wait a bit more. Saputo is another great company that I may be jumping in soon once I get extra 3-4K. I will be buying Bank of Nova Scotia soon as they have beaten up badly lately although there are some risks.

    Keep up the great work Tawcan!

    BeSmartRich

    • Reply
      Tawcan
      January 19, 2015 at 3:44 pm

      Hi BeSmartRich,

      Thank you for the comment. I went in TransCanada when it was down. I think long term wise both TransCanada and Saputo have great growth opportunities. BNS is something I’ve been looking at for the last few weeks.

  • Reply
    Dividend Mantra
    January 18, 2015 at 11:50 am

    Tawcan,

    Great stuff here. Big addition to the annual dividend income. I don’t follow a few of these companies as some of them only trade on the TSE, but it sounds like you did your DD there. Enjoy the passive income!!

    Best regards.

    • Reply
      Tawcan
      January 19, 2015 at 3:44 pm

      Hi Dividend Mantra,

      I’m hoping to add some US dividend paying stocks very soon. 🙂

  • Reply
    Geblin
    January 18, 2015 at 12:52 pm

    Hi Tawcan,

    Seems like some solid additions to the portfolio. Great addition to the annual dividend income. The snowball will only start to roll faster.

    Cheers,
    G

    • Reply
      Tawcan
      January 19, 2015 at 3:45 pm

      Hi Geblin,

      The snowball is definitely slowly getting bigger and rolling faster now. 🙂

  • Reply
    NRG
    January 19, 2015 at 8:29 am

    Great Picks.

    Here is another you may want to consider.
    Corby Spirit and Wine CSW.A

    Spirits and wines. Whiskey is the new ‘hot’ thing in the category. It has been shooting higher because they were highlighted at a conference a few weeks ago. It is not normally followed that well. They reported decent earnings yesterday, increased the dividend and issued a special dividend. They are expanding into the US with their Wiser’s brand. Trades at a discount to more global brands (11 times earnings). Nice dividend.

    • Reply
      Tawcan
      January 19, 2015 at 3:46 pm

      Hi NRG,

      Funny you mentioned CSW.A, I’ve been monitoring that stock for a while now.

  • Reply
    FerdiS
    January 19, 2015 at 9:13 am

    That’s quite an addition to your annual dividend income — congratulations! Most of those stocks are unknown to me as I trade on U.S. exchanges. Nevertheless, the objectives are the same: dividend growth and reinvesting dividend income. Take care!

    • Reply
      Tawcan
      January 19, 2015 at 3:46 pm

      Hi FerdiS,

      Yup, the objectives are the same, grow the dividend and reinvest as much as possible. Happy investing!

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