Tuesday, August 4, 2015

July Portfolio and Goals Update

Before heading off on my three week vacation, I decided to make a couple buys to decrease the amount of idle cash in my portfolio. On Thursday July 9th, I decided to buy shares of BCE Inc in my unregistered account and Suncor Energy in my TFSA.

The BCE Inc purchase allowed me to establish a full position in my unregistered account. I can now sell my full position of BCE in my RRSP (after waiting at least 31 days to avoid tax implications). I was able to buy my shares of BCE at a time when the dividend yield was 4.95% and the P/E ratio was about 18.7X. Canadian telecommunications companies continue to be more shareholder friendly (i.e. raising their dividends 5-10% a year) than their US counterparts due to an oligopoly between Rogers, Telus, and BCE that has resulted in very little price competition. Additionally, my feeling is that the Conservative government, who have long ranged an ineffective war against Canadian telcomms, might be out of office with the upcoming October 2015 federal election.  I have a hard time imagining another party being more hostile toward the telecommunication industry than the Conservatives have been.

Having bought and subsequently sold Suncor Energy four times in the last twelve months, I was hoping to keep the company in my portfolio for the long-term. Buying a price under $34, with a dividend yield of about 3.3%, and expecting a dividend increase announcement when they announced their Q2 results, I should have seen the factors playing against my will to hold this company for the long-term. Suncor announced very solid Q2 results last week and boosted their dividend. On the day of the announcement, I felt compelled to sell the stock around $37 where it simply doesn’t hold the same appeal to me. Luckily, the shares were held in my TFSA, so I won’ t have to pay taxes on my capital gain.

While on vacation, two of my holdings, Kinder Morgan Inc and Omega Healthcare Investors both announced dividend raises of a penny per share respectively. I continue to enjoy getting a quarterly raise from OHI (a pattern they’ve held for over three years). Due to recent weakness in their shares, I’m looking to add more Kinder Morgan shares in my RRSP, despite the falling value of the Canadian dollar. I’m willing to go overweight on Kinder Morgan as I have confidence that Richard Kinder can deliver the five-year dividend growth plan he presented to investors last year.

As for my monthly non-financial goals, despite my vacation, I still managed to post four entries in July, barely meeting my goal of one entry a week. I also kept my weight below 160 pounds, actually losing weight during my vacation (my wife encourages me to walk while on vacations). Although I didn’t make a contribution to charity in July, I have something planned to cover July through September, I just have to double check how to complete my plan with my brokerage. I’ll be posting an entry on this initiative very soon.

How busy was your portfolio in July? Did I miss any great investment opportunities in Canada or abroad?

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