Recent buys – TGT & BEP.UN

As long time readers may know, one of our goals for 2016 is to receive over over $13,000 in dividend income. Considering that we received slightly over $10,000 in 2015, we know we need to buy some high quality dividend paying stocks throughout 2016 to make this challenging goal. Although we’ve purchased over $35,000 so far in 2016 (using 1 to 1 conversion rate between US and Canadian), we still have a bit of work to do.

So the other day I decided to purchase the following stocks:

30 shares Brookfield Energy Partners (BEP.UN)
17 shares of Target (TGT)

Both of these purchases add to our existing shares.

We originally added Brookfield Energy Partners to our portfolio back in April. Since then, the stock price has climbed slightly. I continue to like the renewable energy sector and I think BEP.UN is well positioned to capture opportunities in the renewable energy sector. The company has more than doubled the size of its asset base in the last few years and will continue to grow and expand into new countries. At about 5.96% dividend yield, the dividend yield is higher than your average dividend paying stocks. However, the company is only paying out about 70% of funds from operation and plan to grow annual payout in the 5 – 9% range. BEP.UN’s net income grew by 60.56%, year over year, to $0.16 per share during the most recently completed quarter. This was amount the strongest growth seen by any company in this sector. At 7.04% net profit margin, the company should continue to grow. If the numbers continue to look this good, and we expect them to be, we will buy more BEP.UN shares in the future.

Like Brookfield Energy Partners, we only added Target to our dividend portfolio earlier this year. Given that Target has raised dividend payout for 48 years straight, I am a little surprised that we don’t own more of this stock. The stock price bounced between $65 and $85 this past 52 weeks. At the current price of around $70, I think it gives us a good opportunity to add more shares. One of the downsides of Canadian dividend paying stocks is that they are heavily concentrated in the financial and energy sectors. There are very few Canadian dividend paying stocks in the consumer staple sector (many are paying too low dividend rates to be considered). In order to increase our allocation in the consumer staples sector, we must add stocks in the US and international markets. We are monitoring a few consumer staple dividend paying stocks. Let’s hope the Canadian dollar will get stronger later this year so allow us exchange US dollar in a better rate.

These two recent buys added $112.80 in our annual dividend income.

Dear readers, what do you think about these two recent buys?

By the way, if you like this little blog of mine, I would really appreciate if you can dominate me for the Plutus Award. 🙂

Plutus Award

 

 

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16 Comments

  • Reply
    Mr. Tako @ Mr. Tako Escapes
    July 11, 2016 at 8:39 am

    That’s an interesting challenge I’ve never encountered — when your country’s economy is focused on just a few areas, finding good ways to diversify the portfolio might be tricky.

    Do you find that foreign exchange fees end up killing some of your returns? If so, how much would you say is lost to those hidden costs?

    • Reply
      Tawcan
      July 12, 2016 at 8:22 pm

      It’s an interesting challenge for sure.

      I exchanged a lot of US dollars when CAN was above parity. Now the Canadian currency sucks, I am seeing great return. There are definitely some small losses with exchange fees but I think in the long run given stock growth and such the losses should be pretty small (or might even get a gain).

      Can’t exactly invest 100% in Canadian stocks right? 🙂

  • Reply
    Stefan - The Millennial Budget
    July 11, 2016 at 9:29 am

    I think renewable energy is a great play on the future. I myself bought TGT in June. Wish I bought more as the price has risen 9.75% since I bought it but hopefully it will come down below $70 again so I can pick up some more. Best of luck with the award I will be nominating you 🙂

    • Reply
      Tawcan
      July 12, 2016 at 8:23 pm

      Hi Stefan,

      I wish I had bought more TGT way back. Oh well can’t really change anything in the past… can only purchase more TGT stocks when the price is lowered. Thanks for the nomination, really appreciate it.

  • Reply
    Investment Hunting
    July 11, 2016 at 2:49 pm

    Nice job grabbing TGT shares. It’s up slightly the past few weeks, but still a value buy in my opinion.

    • Reply
      Tawcan
      July 12, 2016 at 8:24 pm

      Thanks Investment Hunting. I, too, believe there’s some value in TGT even at current price.

  • Reply
    Dividend Diplomats
    July 12, 2016 at 3:56 am

    Tawcan –

    Nice job on the Target shares – great company, so many people love the red card and you have starbucks inside! Win, Win haha. Congratulations on adding all that income!

    -Lanny

    • Reply
      Tawcan
      July 12, 2016 at 8:24 pm

      Thanks Lanny. Although TGT didn’t succeed in Canada, from what I’ve heard, it’s a highly regarded brand in the states. 🙂

  • Reply
    Dividend Diplomats
    July 12, 2016 at 6:14 pm

    Nice purchase Tawcan! Picked up 50 shares myself last week for many of the same reasons you did. At this level with these metrics, it was hard to say no. Now I feel much better ever time I spend money there!

    Bert

    • Reply
      Tawcan
      July 12, 2016 at 8:26 pm

      Hi Bert,

      Boom! Big purchase with 50 shares. I’d love to buy more US stocks like TGT, Visa, and Starbucks. The currency conversion is a factor to consider for us Canadians. 🙂

  • Reply
    FerdiS
    July 12, 2016 at 11:56 pm

    Hi TawCan — I’m long TGT and sold a put to buy 100 more shares at a cost basis below $62. Maybe the put doesn’t get exercised, in which case I’ll sell another one!

    I’ve never considered the issue of Canadian stocks being so focussed. Mmm, that would make diversification challenging!

    • Reply
      Tawcan
      July 13, 2016 at 7:40 pm

      Hi FerdiS,

      I’d love to own 100 shares of TGT one of these days. Canadian stocks are probably not as focused as what I painted… just that many dividend paying stocks are in financial and energy sectors. Definitely need to look into US and international markets if we Canadians want to diversify into consumer staples sector.

  • Reply
    BeSmartRich
    July 13, 2016 at 8:01 am

    Solid buys Tawcan. Both companies will provide returns infinitely as long as their fundamentals are solid like today. Target is one of my favorite dividend growers!

    • Reply
      Tawcan
      July 13, 2016 at 7:41 pm

      Hi BeSmartRich,

      Given the dividend payout history, TGT is a very strong grower that’s for sure. Hopefully the fundamentals stay strong for a very long time.

  • Reply
    Evan
    July 19, 2016 at 7:48 pm

    Nominated!

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