Recent Buys

buy

Since our last round of purchases where we added $415 into our annual dividend income, the markets have continued to be volatile. Due to the recent decline in crude oil price, Bank of Canada even announced that the overnight interest rate between commercial banks will be cut from 1% to 0.75%. This major announcement sent shock waves across Canada. What does this mean exactly? Does it mean the economy is slowing down? Does it mean the housing market will crash? Does it mean that we will see another recession? There are many questions but it’s rather difficult to have convincing answers and predict the future (if we can we’d be all rich!). Interesting enough, since the interest rate announcement, stocks have been rallying. Perhaps it’s a coincidence as crude oil price has also rebounded the last few weeks. Whether this is recent pop is a dead cat bounce or not remains to be seen.

What does a Canadian like me do when the markets are down? As I’ve learned from my experience in dividend investing, we took advantage of this opportunity and invested in some solid Canadian dividend paying stocks.

Recently we invested roughly $2,500 of capital and purchased the following stocks.

24 shares of Bank of Nova Scotia (BNS.TO)

30 shares of Canadian Natural Resources (CNQ.TO)

 

I wrote some brief analysis of BNS and CNQ back in Nov. Since then, the price of both stocks have taken a hit. Purchasing more shares of BNS and CNQ allows us to average down our cost basis. Looking at the fundamentals of both BNS and CNQ, I still believe both companies have great future growths and will continue raising their dividends moving forward.

These purchases will add $89.76 into our annual dividend income.

 

Looking ahead, our plan is to deposit some cash into our RRSP before the March 2nd deadline to maximize our 2014 RRSP contribution limit. Right now we have little cash in the RRSP so we are unable to purchase US dividend stocks (we avoid 15% US withhold fee by investing US stocks in our RRSP). Once the March 2nd deadline passes, we plan to deposit some more cash to start our 2015 RRSP contribution. Some of the US stocks we’re interested in include:

CVX – hopefully the crude price will remain volatile

COP – same as CVX

XOM – same as CVX.

JNJ – we want to add to our existing position. Recent price drop provides an excellent opportunity.

PG – same as JNJ

AT&T – Excellent dividend yield, the telecom sector is not going away anytime soon as we move toward Internet of Things.

UL – consumer stable. Would like to add to our existing position.

COST – Costco is simply a beast. Dividend yield is quite low but the dividend growth has been pretty solid. Every time I go to Costco, I’m amazed how packed the store is.

BBL – this stock has taken a beating the last few months. The stock price has recovered a little bit but the stock outlook remains weak. The fundamentals look solid so this may be a good long term hold.

MMM – another consumer stable giant. We would love to hold this stock in our dividend portfolio.

MSFT – Microsoft has certainly floundered with their Windows 8 and 8.1 releases. Windows 10 looks promising so far. The recent price drop has provided a good entry point. Adding MSFT will also further diversify our technology holdings.

DIS – I love Disney theme parks and the Disney empire just continues to grow as Disney owns a wide selection of assets. Hard to say no to a well diversified company (or should I say empire?).

V – as long as credit card is around, revenue will continue to flow. This is a high dividend growth stock that we hope to own in our dividend portfolio. Visa is something that Baby T already owns in his dividend portfolio.

 

While we continue adding positions in our RRSP using the added cash, we will also continue allocating capital in our regular accounts and TFSA, focusing on Canadian dividend paying stocks. Some of the Canadian stocks we’re interested in include:

TD/RY/BNS/BMO/CM/NA – The Canadian bank stocks all look very appealing right now. The price has recovered a bit since a few weeks ago but with the low interest rates, banking stocks may continue going south. CM remains to be the only big 5 Canadian banking stocks that we do not own right now.

DRG.UN – Liquid wrote a good article on DRG.UN a few days ago. Dream Global REIT invests in properties in Germany. We would like to add a bit more REIT’s in our portfolio and adding a non-Canadian REIT might be a good idea when it comes to geographical diversification.

AGU – Agrium has seen a tremendous growth. Adding AGU would allow for further diversification in our portfolio. AGU also has a very solid dividend growth history.

ESI – Ensign Energy Services might be an interesting one to monitor. The company has been able to increase its dividend for 19 straight years. However the recent drop in crude oil price has taken a huge toll on the company. It will be interesting to go over ESI’s earning reports and determine whether it makes sense investing in ESI or not.

CNR – We already own Canadian Nation Railway but would like to add to our existing position if possible.

TCL.A – Transcontinental Inc. popped up in my dividend filter. The company has solid fundamentals and has been increasing dividend for 12 years straight. The 10 year dividend growth rate has been pretty solid as well.

ADW.A/CSW.B – People will continue drinking alcohol. Both Andrew Peller and Corby Spirit and Wine look quite interesting to me.

Since Questrade offers free ETF purchase, we plan to add VXC (Vanguard All-World Ex Canada Index ETF) with the DRIP left over dividend in Mrs. T’s regular account. This is our method of having some more international diversification. We may also look at ZDI (BMO International Dividend ETF) in Mrs. T’s TFSA as well.

 

What do you think about our recent purchases? What do you think about the stocks that were mentioned above?

Get update via email:

You Might Also Like

42 Comments

  • Reply
    Dividends with Children
    February 3, 2015 at 7:08 pm

    Tawcan,

    I’m not familiar with CNQ being your neighbor to the south, but am a fellow shareholder in BNS. Looks like you grabbed some just in time before today’s spike up. I was hesitant adding more since I’m somewhat averse towards financials in general. I certainly don’t mind owning a little bit 🙂

    Congratulations on the purchases!

    Best,
    DWC

    • Reply
      Tawcan
      February 3, 2015 at 10:41 pm

      Hi DWC,

      I may continue adding BNS so we can enrol in DRIP in the regular account. We are also DRIPing in tax deferred account. I think BNS will continue to grow.

  • Reply
    Henry - Living At Home
    February 3, 2015 at 7:22 pm

    I heard that housing prices are coming down in Canada due to the lower oil prices. I guess people are getting layoff so that effects nearby economies where the jobs are. It seems like it’s also having a negative effect the Canadian banks as well. But it looks like you’re seizing the opportunity to load up on some great companies. Best of luck on the investments! Cheers.

    • Reply
      Tawcan
      February 3, 2015 at 10:41 pm

      Hi Henry,

      Housing price going down will most likely happen in Alberta. Not sure it will go down for the rest of Canada though.

  • Reply
    The Broke Dividend Investor
    February 3, 2015 at 7:27 pm

    I hope the dollar stays strong for a while. PG, JNJ, UL, and PEP might correct to reasonable levels.

    • Reply
      Tawcan
      February 3, 2015 at 10:42 pm

      Hi The Broke Dividend Investor,

      Well the Canadian dollar has stumbled from par to about 78 cents. Converting Canadian to US to buy US stock will cost us more money now. I hope the Canadian dollar will get stronger soon.

      • Reply
        Adam @ AdamChudy.com
        February 4, 2015 at 8:34 am

        May be stuck on that one. Canadian dollar is so commodity driven, and now they’re easing rates.

  • Reply
    Liquid
    February 3, 2015 at 7:48 pm

    Good decision to buy BNS. I think all our major banks will do well in the foreseeable future. DIS has been one of my best performers. I highly recommend them. Share price up almost 70% since my purchase back in 2013. Despite the run up I think Disney still has room to grow because the new Star Wars movie is coming out later this year along with some awesome Marvel movies. Thanks for the mention by the way.

    • Reply
      Tawcan
      February 3, 2015 at 10:44 pm

      Can’t wait for the new Star Wars movies and all the Marvel movies. Disney is a huge empire as they own ESPN too. Will definitely look into adding DIS into our portfolio.

  • Reply
    Roadmap2Retire
    February 3, 2015 at 7:53 pm

    Lots of those names on my watchlist as well. Congrats on adding BNS and CNQ.

    R2R

    • Reply
      Tawcan
      February 3, 2015 at 10:44 pm

      Hi R2R,

      I guess we think alike. 😉 Thanks for dropping by and taking the time to comment.

  • Reply
    My Dividend Pipeline
    February 3, 2015 at 7:54 pm

    Tawcan,

    You are killing it with your additions. We have very similar names (U.S.) on our watchlists. I like your energy list along with PG and MSFT. It’s hard to believe MSFT is yielding around 3% with a mountain of cash available to pay dividends. I bought some shares a year and a half ago and now am looking to add more.

    Stay aggressive!

    MDP

    • Reply
      Tawcan
      February 3, 2015 at 10:45 pm

      Hi MDP,

      MSFT is looking quite interesting, they do still own a majority of the PC OS market share. Last time I checked, 90% or more of people I know all use Office suite.

  • Reply
    Barry @ Moneywehave
    February 3, 2015 at 8:04 pm

    Heh when I read the title I thought this was going to be a list of cool things you bought. Okay stocks are cool but I was expecting to see something material like a TV =P

    I need to lower my expectations.

    • Reply
      Tawcan
      February 3, 2015 at 10:46 pm

      Haha Barry… if we actually buy something material like a TV then none of my posts about not getting cable will be invalid. We like buying appreciating assets. 😀

  • Reply
    Dividend Hustler
    February 3, 2015 at 8:26 pm

    Awesome purchases Tawcan. 2 high quality companies. They’ll amongst my favorite. I wish I bought more but I’m preparing for tax season… :(. Keep up the great work my friend. I know how hard and fun this journey is. Take care and keep on grinding.
    Much love. Tyler.

    • Reply
      Tawcan
      February 3, 2015 at 10:47 pm

      Hi Tyler,

      I’m in a the mist of preparing for tax season too. Looking forward to sorting all the paper work. Great website and great portfolio you have.

  • Reply
    Investing Pursuits
    February 3, 2015 at 8:31 pm

    Those are two solid companies that you purchased. Like you, I recently purchased shares in BNS. At the end of December, I purchased $1200 worth of shares directly through the transfer agent. BNS has also paid a dividend near the end of January and I have a full drip set up.

    I have not owned CNQ ever, but believe this to be a solid company that will do well over time.

    • Reply
      Tawcan
      February 3, 2015 at 10:48 pm

      Hi Investing Pursuits,

      That’s awesome you have a full DRIP set up with BNS. We haven’t went through the effort of setting up full DRIP. All of our DRIPs are through discount brokers, so only synthetic DRIP.

  • Reply
    B
    February 3, 2015 at 9:48 pm

    Hi Tawcan

    Just read across your kid legacy which you have purchased not long ago. I did the same thing last year too when my son is born.

    I may have missed but what is the frequency you will put into your kid portfolio? Maybe once every year on his birthday? They have a much larger time to compound, so no worries on the amount yet for me.

    • Reply
      Tawcan
      February 3, 2015 at 10:50 pm

      Hi B,

      We haven’t really decided on the frequency that we will put into Baby T’s portfolio. The focus is to continue maximize RESP ($2500 per year), and if we have any money left over we’ll put that into his dividend portfolio. Considering there’s already over $10k in his dividend portfolio and he’s only 15 months, the portfolio will have a long time to compound. We need to take care of our dividend portfolio first. 🙂

  • Reply
    Adam @ AdamChudy.com
    February 4, 2015 at 8:38 am

    Very solid list and I also share a lot of those on my watchlist. Many of the US bluechips continue to be above what I’d like to see as buy-in prices though. That’s why my purchases lately have definitely been overly concentrated.

    I’d love to see Disney put out a couple of bad movies for once and let me get in there at a decent entry price.

    • Reply
      Tawcan
      February 5, 2015 at 12:51 pm

      Hi Adam,

      I’d love to see Disney putting out a few bad movies so the stock price would drop. 🙂

  • Reply
    DividendMongrel
    February 4, 2015 at 4:57 pm

    Hello Tawcan!
    I see a lot of the same companies that I also want to add to my portfolio as well. I just pulled the trigger on MSFT and I will be posting my other buys soon. BNS is still a great value as well. Thanks for posting this updated buy list.

    • Reply
      Tawcan
      February 5, 2015 at 12:53 pm

      Hi Dividend Mongrel,

      I really like your buy on MSFT as commented on your blog. You’re making some great process on your dividend portfolio. Keep it up.

  • Reply
    Ged Ward
    February 4, 2015 at 7:53 pm

    Hi Tawcan, really enjoying your blog and some of the information is really informative. Will be looking forward to your emails in the future

    Ged

    • Reply
      Tawcan
      February 5, 2015 at 12:53 pm

      Hi Ged,

      Thank you for taking the time to comment on my blog.

  • Reply
    BeSmartRich
    February 4, 2015 at 8:28 pm

    Excellent purchase on BNS and CNQ. I purchased BNS a couple of weeks ago and it has been doing pretty well. I am looking closely at Suncor which will be added to my wife’s TFSA.

    When you purchase US stocks in RRSP do you use Norbert’s Gambit strategy?

    Keep cracking.

    BeSmartRich

    • Reply
      Tawcan
      February 5, 2015 at 12:54 pm

      Hi BeSmartRich,

      Suncor will be a great add to your wife’s TFSA.

      I do use Norbet’s Gambit if there’s a large amount of cash I want to convert from CAN to US. If it’s less than $1,000 sometimes I don’t bother.

      • Reply
        BeSmartRich
        February 5, 2015 at 6:17 pm

        Excellent. Thanks for the response.

  • Reply
    Dividend Diplomats
    February 4, 2015 at 9:40 pm

    Tawcan,

    Nice job on adding more to the canadian bank play! You are definitely taking an aggressive approach to 2015 and everyone should be staying out of your way. JNJ did have a decent pullback lately and T was down in the upper $32s as one point, also very enticing. I think you have a great list there, hope they turn out for you to buy them!

    Talk soon Tawcan and congrats.

    -Lanny

    • Reply
      Tawcan
      February 5, 2015 at 12:55 pm

      Hi Lanny,

      We’re definitely taking a pretty aggressive approach to 2015. The markets have been volatile and we want to take advantage of this great opportunity.

  • Reply
    Dividend Gremlin
    February 5, 2015 at 11:26 am

    Tawcan,

    Excellent purchases there. I especially like your Canadian bank positions. I only have CM, and right now they look to be at a great price point to get in (at least they have been).

    All of your wish/watch list items I either have or want to have, nice to have quality company in that regard.

    A more serious question: where did Mrs. T find that scratch map from a few posts back? That thing looks great!

    – Dividend Gremlin

    • Reply
      Tawcan
      February 5, 2015 at 12:56 pm

      Hi Dividend Gremlin,

      Funny that CM is the only one that we don’t own right now. 🙂

      I think Mrs. T bought the scratch map from Chapters, it’s a Canadian wide bookstore. Thanks for dropping by.

  • Reply
    Dividend Growth Journey
    February 5, 2015 at 6:51 pm

    Interesting list of stocks. The oil sector has bounced back very quickly in the last week or so. Wish it goes down a bit for to add more oil stocks at attractive prices. I was able to add COP and little bit of BP during the recent past. Also added BBL at 40s and that too has gone up by over 10%. I just initiated position in T as part of my weekly purchases. So looks like we have lot of common stocks in our portfolio.

    • Reply
      Tawcan
      February 6, 2015 at 4:01 pm

      Hi Dividend Growth Journey,

      I wish we were able to add more oil stocks when the sector was down as well but considering the markets remain volatile, maybe we will have some more opportunities this year.

  • Reply
    Dividend Wisp
    February 5, 2015 at 8:36 pm

    Definitely like the BNS pickup and may be adding some of it for myself as well in the next few weeks I hope! Not so sure on CNQ/resources in general, but I havnt looked much into them at all. Hopefully the low CDN dollar will help out on the demand for their products though.

    For ZDI in the TFSA, won’t it incur taxes as the source of the income is not from Canadian company sources? Which would make the RRSP a better spot for that ETF?

    • Reply
      Tawcan
      February 6, 2015 at 4:06 pm

      Hi Dividend Wisp,

      Great to see another BNS fellow shareholder. For ZDI, that’s a good point, I will need to spend more time investigating.

  • Reply
    DivHut
    February 6, 2015 at 2:19 am

    It’s all about the Canadian banks. The more blogs I read the more I see the same names popping up again and again, TD, BNS, RY, CM, BMO, etc. I added to my TD in January and will most likely add to another Canadian bank in February. Just haven’t pulled the trigger on anything yet. It’s been a crazy wild ride so far in 2015 and the market seems rather directionless. Thanks for sharing your recent buys.

    • Reply
      Tawcan
      February 6, 2015 at 4:09 pm

      Hi DivHut,

      Looks like Canadian banks all went up in prices the last few weeks. I was looking at TD but didn’t buy any, should have listened to my intuition I guess.

  • Reply
    Get Rich Brothers
    February 8, 2015 at 9:34 pm

    Tawcan,

    We own four of the Big Five Canadian Banks in our portfolios. We believe BNS to be a top notch operator with significant runway ahead of it for growth down the road. The Latin American exposure in addition to the solid retail banking division in Canada give the company ample room to keep bumping the dividend for years to come.

    Take care!
    – Ryan from GRB

    • Reply
      Tawcan
      February 10, 2015 at 2:20 pm

      Hi Ryan,

      BNS is definitely looking very interesting but all the other 4 Canadian banks are doing quite well too.

    Leave a Reply