Having not purchased any dividend stocks since September, I have been feeling a bit itchy. It has been tough not to pull the buy trigger. With our cash reserve piling up due to monthly dividend income and the 2017 TFSA contributions, over the last few weeks I purchased several stocks to add to our dividend portfolio.
We recently purchased the following stocks
- 22 shares of AbbVie (ABBV)
- 110 shares of Smart REIT (SRU.UN)
- 200 shares of Exco Technologies (XT.CO)
In total a bit shy of $7,500 was deployed.
Reasons for Purchasing
Below are my reasons for purchasing these dividend paying stocks.
AbbVie is a research-based biopharmaceutical company. The company develops and markets therapies that address a range of diseases. The company was created at the beginning of 2013 when Abbott Labs (ABT) spun-off its biopharmaceutical business. Recently AbbVie hiked its dividend by 12.3% and managed to grow dividend payout every year since the spin-off in 2013. At a PE ratio of 17.2, an estimated 5 year PEG ratio of 0.87, and a return on equity of 107.29%, I think the stock is reasonably priced. The dividend matrix looks pretty good too as the stock currently has a dividend yield of 4% and a payout ratio of 68.8%.
The main reason for purchasing AbbVie is to increase our exposure to the health care sector. While Johnson & Johnson is a strong player in the health care sector, adding AbbVie will strengthen our health care positions.
I wanted to increase our exposure to REIT slightly this year. Given that we already own RioCan (REI.UN), Smart REIT gives us even more exposure to the retail REIT space. I like Smart REIT because it has managed to increase its dividend payout the past 3 years with a healthy payout ratio and increasing AFFO.
The more I look into Exco’s fundamentals, the more I like this stock. Exco Technologies has managed to grow its dividend for 10 straight years at a 10 year growth rate of 17% and a 5 year growth rate of 23.1. At a low payout ratio of 25%, Exco Technologies should be able to continue its impressive dividend growth for many years to come.
These purchases added $305.96 to our annual dividend income.
Dear readers, what do you think about our purchases?