Sunday, April 2, 2023

Dividend Growth Watch List for April - June 2023

Every November when it comes time to renew the domain name for this blog, I promise myself that I'll write more in the new year. My best intentions usually lose steam in late January or early February. In order to recreate the spark, here is the third of what could best be described as 15 30-minute, quantity over quality, blog entries. 

     With dividends flowing in regularly, on top of my regular monthly contributions to my investment accounts, and a decent amount of cash in my TFSA and unregistered accounts at the end of the first quarter, here are some of the companies I'm considering buying shares in heading into the second quarter of 2023.

     The most likely purchase in my TFSA is to increase my position size in Brookfield Infrastructure Partners L.P. (TSX: BIP.UN). BIP has grown to be one of my top five largest holdings, as I like the fact it gives a good amount of geographic and sector diversification, I feel it has strong management, and leverages the well-known "Brookfield" name to get access to acquisitions that other infrastructure players might not even know are for sale. Being a dividend growth investor, the 4.5% yield and consistent 5-7% distribution growth rate are good reasons to like this company. If I don't add to my position in BIP, it will likely be because another short-term opportunity in a REIT or royalty company becomes a more obvious choice to add to my TFSA.

     As I expect to be making my annual RRSP contribution sometime during the quarter, the two likely candidates for me to upsize my positions in are Home Depot (NYSE: HD) and Johnson & Johnson (NYSE: JNJ). As I try to rebuild my former position in Home Depot, the company's stock has stayed pretty range bound during the past three months, and it's tempting to keep adding in this company with such a great history of compounding returns. In contrast, I see JNJ's shares as very reasonably priced, likely due to the uncertainties regarding Talc claims, and the splitting of the company (which I really wish they would not do....but it seems like a done deal).

     In my unregistered account, I've tempted to add to my positions in several Canadian banks (Royal, TD and Bank of Montreal) as they have been beaten down by a cooling Canadian housing market, the government's recent change in tax treatment of internal dividends, and the bank turmoil in the U.S. (and internationally in Switzerland). Although I'm already pretty heavy on the company, Capital Power Corporation (TSX: CPX) is also very interesting to me as a value/high dividend play. Lastly, I had planned on adding to my position in Constellation Software (TSX: CSU), but every time I checked in the past couple of weeks, the share price has kept increasing.

     Despite feeling the above names are the most likely to be additions to my portfolio this quarter, I'm reminded of the saying "Man plans, god laughs". 


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