August 2018 Portfolio Update

As usual, August was a slow month for income received. All the same, I managed to make some nice maneuvers within my portfolio which I believe were good moves overall. I bought some quality stock while selling out of a speculative position.

CAD Dividends

Company	CAD Payments ($)
RioCan Real Estate Investment Trust (REI.UN)	31.32
Chartwell Retirement Residence (CSH.UN)	4.90

Dividend Summary

August has brought in a total of $36.22 from dividends. This represents a sharp decline in dividends received for the month and will likely continue to be the case moving forward on the Feb-May-Aug-Nov payment schedule because I have only two companies providing income. This comes in sharp contrast to the two previous months where I brought in nearly $400 for June and almost $500 for July.

This unevenness in payments is something that retirees need to bear in mind when planning expenses. While $1,000 over three months might average out to $333 monthly, it may actually look more like $400+$500+$100 in practice and require careful attention to the details in terms of ensuring there is enough left over from the strong months to carry the lean ones.

The decline in dividends in this period also is in relation to my sale of The Jean Coutu Group Inc. (PJC.A) which was amalgamated into Metro, Inc. (MRU). PJC.A was my only quarterly dividend payer on this schedule and so it helped to bulk the numbers up somewhat. Having said this, I have no intention of going and looking for companies which pay on this quarterly timetable; my primary concern is always whether an investment meets my needs from a quality perspective.

Market Opportunities

This was a relatively slow period in terms of overall activity in my portfolio. While in other months this year I made several purchases, in August I was limited to just one buy and one sale.

Last month I initiated a position in Brookfield Renewable Partners L.P. (BEP). I opened the position for 55 shares at a cost of ~$39.60. This month the stock advanced slightly and I decided to roughly double down by adding $2,029.95 CAD in fresh capital which brought me 50 more shares at a cost of $40.40 CAD each.

As noted last month, my position in BEP is held in CAD on a Canadian exchange. However, BEP’s $0.49 quarterly distribution is denominated in USD and so on a conservative estimate, I anticipate these 50 shares to bring in around ~$32.00 CAD on a quarterly basis or ~$128 annually.

While my portfolio is already heavy on energy/utilities, I felt BEP was an opportunity to diversify somewhat within the space on two levels. Firstly, the company has a global presence and so it allows me to add assets from around the world rather than focusing primarily on Canada. Secondly, BEP has hydro, wind, and solar operations; all of which are likely to continue being areas which capitalize on the movement toward generating sustainable energy. BEP is well-positioned in that it is part of the overall Brookfield ecosystem of businesses which has access to capital should it need to raise money to continue acquiring prime assets. This will become increasingly important in the renewables industry as governments potentially cut back opportunities for subsidies.

Conversely, this month I took the opportunity to capitalize on the strength in the cannabis sector to entirely sell out my position in Canopy Growth Corporation (WEED) which I owned in CAD on a Canadian exchange. I sold my 30 shares at $62.31 CAD for total proceeds of $1,859.35 CAD. I originally opened my position with WEED back in early December for 55 shares at $18.64 CAD. Shortly thereafter, I sold 25 shares for roughly the same total value as my purchase price as the company had more than doubled in price ($41.10 per share) in around a month. Overall, it was a highly successful purchase despite being a minor piece of my portfolio. One considerable upside to this sale is that it provided the fresh powder I needed to pull the trigger on BEP, as described above.

I still retain two other positions in the cannabis market, though my speculation in the sector is at this stage winding down. The overall catalyst for growth was, and is, the impending legalization of recreational use in Canada. It is quite possible there will be another bump in the market in the lead-up to mid-October, but this ultimately falls far outside of my general investment thesis as a DGI and so I dabble knowing full-well that it runs contrary to my beliefs. Still, a little speculation here and there can be interesting. Occasionally, as in this case, it can also be quite rewarding.

Cash Cushion

Beyond the $36.22 from dividends this month, I also pulled in $42.56 in interest earned on deposits in my high-interest savings account where I have a 2.5% rate. This brings my passive income for the month in aggregate to $78.78.

Conclusion

August was a slow month in terms of dividend income. However, I am content to have the opportunity to close out my position with WEED. It was a fun ride to watch the share price rise from $18.84 CAD to my ultimate sale price of $62.31 CAD over the course of around nine months. While it is tempting to wish I had placed more capital on the line, that is the slippery slope of speculative investing and one I’m not interested in becoming overly involved in.

I look forward to September and to continue seeing the dividends grow from companies I have been increasing my stake in through the earlier part of 2018.

Thank you for reading.

Full Disclosure: Long REI.UN, CSH.UN, MRU, BEP

Pictures courtesy of pixabay.com