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.
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 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 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%.
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.