Recent buys – HR.UN, HLF, BCE

After our recent purchases where we deployed around $7,500, I have been looking for buying opportunities to deploy more cash in our TFSA accounts. Although I typically have some cash sitting around, I don’t like having a large amount of cash in our portfolio as this is an opportunity cost that I’m taking on. I believe it’s better off to deploy cash when the right opportunity occurs and getting our money working hard for us rather than having money idling and doing absolutely nothing.

Luckily we saw some volatility in the stock market the last few weeks. This allowed the purchases the following stocks:

  • 110 shares of H&R REIT (HR.UN)
  • 80 shares of High Liner Foods (HLF.TO)
  • 37 shares of BCE Inc (BCE.TO)

Around $6,200 was deployed with these purchases. Since beginning of 2017 we have added around $13,700 worth of dividend stocks to our dividend portfolio.

All three of these buys gadded to our existing positions.

Reasons for Purchasing

Below are my reasons for purchasing these dividend paying stocks.

H&R REIT

In January, I mentioned H&R REIT as one of the stocks that I’m monitoring. Instead of owning rental properties and having to manage them on our spare time, we like the idea of investing in REITs and still collecting rental income. We have owned H&R REIT for a while now and enjoyed collecting the rental income distribution each month. We particular like H&R REIT because it is very diversified. It is both geographically diversified and industry diversified.

Just recently H&R REIT increases the monthly distribution. It has a solid occupancy rate of ~96% with a 68.2% payout ratio as percentage of FFO in Q3 2016. With top 15 tenants being large corporations, including Encana, Bell, Hess Corporation, New York City Department of Health, Canadian Tire, and Telus, accounting 51% of H&R REIT’s rental income, I believe the H&R REIT’s profitability will remain quite stable. Why? Because these large corporations are very unlikely to move their offices.

High Liner Foods

We purchased High Liner Foods back in April 2016. The stock saw a price jump in 2016 and since then the price has pulled back slightly. I see the price pull back as a buying opportunity. Upon further research, High Liner Foods is one the largest frozen seafood producers and distributors in Canada, the US, and Mexico. I believe there is further growth potential for High Liner Foods as it expands outside of North America. High Liner Foods has a 5 year dividend growth rate of 14.1% and recently raised its dividend by 7.7% from $0.13 per share to $0.14 per share. This is the second time that High Liner Foods has increased dividend payout in a year. At a payout ratio of 40.5%, I believe High Liner Foods will continue growing its dividend.

Due to the modern busy lifestyle, many people simply don’t have much time to prepare meal from scratch. High Liner Foods’ sustainable sourced seafood products allow people to enjoy seafood without having to spend too much prep time. Furthermore, more and more people are cutting back their meat consumption and increasing their consumption of seafood. With a company mission of providing healthy, easy to prepare, delicious seafood options, I think there are a lot of future growth for High Liner Foods.

BCE Inc

I decided to purchase some shares of BCE for the primary reason to increase our exposure in the telecom sector. With the popularity of cellphones and people’s addiction to data and media, I see telecom as a stable sector. How many people do you know that don’t own a cellphone, don’t own a landline, don’t own a TV, or don’t listen to the radio? Probably not many, unless they live in a cave! BCE is one of the three major communication companies in Canada with a large market share. We purchased BCE rather than Rogers and Telus because BCE stock price has retrieved quite a bit in the last few months. You can see this purchase as yet another opportunistic buy. I like to add to existing long term positions when there’s a share price pullback.

Conclusion

The three purchases added $303.16 to our annual dividend income.

Dear readers, what do you think about our purchases?

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13 Comments

  • Reply
    Mr. Tako @ Mr. Tako Escapes
    February 16, 2017 at 9:38 am

    Some great buys there Bob. Good companies with solid earnings streams. You’re bound to do well over time.

    I’m still sitting on my hands for now…but probably shouldn’t be.

    • Reply
      Tawcan
      February 16, 2017 at 8:16 pm

      Thanks Mr. Tako. I get itchy when I don’t purchase stocks for a while. 🙂

  • Reply
    Pauline
    February 16, 2017 at 11:23 am

    wondering if high liner will be a direct beneficiary of the new ceta trade agreement

    • Reply
      Tawcan
      February 16, 2017 at 8:20 pm

      It might, we’ll have to wait and see.

  • Reply
    Aaron Posehn
    February 16, 2017 at 11:50 am

    Hi Bob, very interested in your blog lately. I’m also living in Vancouver, so it’s interesting to see how another person in the city is investing. I found your blog just last month when you were profiled in a Money Sense article and have been reading your posts quite regularly since. Great work, and thanks for sharing insight into your investing strategies.

    • Reply
      Tawcan
      February 16, 2017 at 8:21 pm

      Thank you Aaron for your kind words. It’s always nice to hear from a fellow Vancouverite.

  • Reply
    mrspickypincher
    February 16, 2017 at 3:19 pm

    Great choice with growing that annual dividend income! Thanks for breaking down the different investments, too. I’m trying to learn all I can about investing while we’re getting out of debt.

    • Reply
      Tawcan
      February 16, 2017 at 8:21 pm

      No problem. Good luck with eliminating your debt.

  • Reply
    Mark Seed (@myownadvisor)
    February 17, 2017 at 10:05 am

    That’s a lot of capital to deploy in a short time – your saving rate must be through the roof! 🙂

    Well done.
    Mark

    • Reply
      Tawcan
      February 19, 2017 at 6:14 pm

      Thanks Mark, we are trying. 🙂

  • Reply
    Ashley
    February 20, 2017 at 7:21 am

    I purchased HR.UN is 2016 and have been happy with it and enjoyed the recent distribution increase and I consider it a stable portion of my REIT exposure. I didn’t have High Liner on my radar but will now, you present some good arguments. As to BCE I’ve actually been considering selling my appreciated Rogers to buy BCE as I believe Rogers has perhaps gotten ahead of itself and the lack of a dividend increase for several years is troubling. I’ve always had BCE in my radar and it may be time to hit the buy button on it.

    • Reply
      Tawcan
      February 21, 2017 at 1:08 am

      Please purchase these stocks after you’ve done your own research. 🙂

  • Reply
    Ramona
    February 21, 2017 at 5:54 am

    Nice work. I’m trying to learn as much as I can from all these strategies, so I appreciate the details. Keep up the great work and us informed 🙂

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