2015 Mid-Year Review: Part I

You can read Part II here.

With June now firmly in the books and the GRB Anniversary being complete, we are now half-way through twenty-fifteen. As at the beginning of each year it is good practice to take measure of where we have been and where we would like to go, this likewise affords us an opportunity to see how things have progressed.

This post will break some of the down the financial moves I have made from January of this year until now and detail what I have been thinking along the way.

In Part I I will focus on my Canadian companies with Part II taking a look at my U.S. equities.

Canadian Companies

Toronto-Dominion Bank (TD): I have continued collecting my dividends from TD and selectively reinvesting them into other companies along the way. I am not DRiPing my shares of TD. The dividend increased its quarterly dividend from $0.47 to $0.51 this year, amounting to an 8.51% bump.

While TD is a core holding for me, I am not intending to add to this position in the near-term. My Yield-on-Cost (YOC) on these shares exceeds 8% since I picked them up during the financial crisis and have held ever since.

RioCan Real Estate Investment Trust (REI.UN): REI.UN is another company I acquired during the financial crisis and currently enjoy a double-digit YOC based on my initial purchase price. My position has grown by over 25% since 2009 as a result of DRiPing my shares. I stopped reinvesting my distributions back into REI.UN last year since the price of the company has grown considerably and I would rather invest the cash flow elsewhere.

Though REI.UN had been increasing its distribution every year from 1994 until the financial crisis in 2009, it has only since bumped the payout once by 2.17% in early 2013. The company has been expanding aggressively and as such I am satisfied for the time being simply receiving my oversized payments.

Canadian Imperial Bank of Commerce (CM): I have held my CM shares since 2011. Since that time there have been a string of small dividend increases with three company in 2015; 3.00% on the first payment, 2.91% in May, with the next dividend to increase 2.83%. CM is a steady operator and I do not intend to add more shares in the near future.

BCE Inc. (BCE): BCE is the largest Canadian telecom and is presently my largest holding. The company pays a hefty dividend of nearly 5% at the moment. My YOC here exceeds 6% due to my purchases having come several years back in two tranches. I have been DRiPing this position, although I may in the near future cease doing so and instead use the dividends to build a stake in one or both of the other two large players in space, TELUS Corporation (T) and Rogers Communications Inc. (RCI.B).

BCE increased its dividend 5% this year. I expect low-to-moderate dividend growth from BCE which is acceptable given the high YOC I currently have with the company. Even if dividend growth was to cease entirely, I am generating a sizeable level of income which I can redirect to maximize returns.

Le Groupe Jean Coutu PJC Inc. (PJC.A): PJC.A is a company I initiated a stake in late last year. Rick bought his shares months before I did. After making an independent assessment of the company, I felt he was correct in his judgment and joined the party myself. Since getting my toes wet, the share price has declined considerably. As a result, I picked up more shares in May of this year and then again in June. I am currently monitoring the stock and will likely add some more shares if they fall into the mid-$19 range.

My assessment of PJC.A can be found here. I should also add that the company currently has no debt and though its dividend yield is low at the moment, I believe there will be room to grow over the years. The dividend increased for the first payment of this year to $0.11 quarterly which was a 10% raise. I will be, I hope, patiently collecting a rising stream of income for decades to come in this company.

Corby Spirit and Wine Ltd. (CSW.B): CSW.B is a rather small company with a current market cap of under $600M. I likely would not have paid this one much attention aside from the geographical proximity I share with it. However, it enjoys a host of incredibly solid alcoholic beverage brands which are recognizable to many Canadians. My full analysis can be found here which details the company’s U.S. expansion opportunity.

I initiated a small stake in CSW.B this past December. Since that time I have enjoyed two dividend payments. The share price has declined somewhat and this stock is on my radar to add more subject to availability of funds, though I will prefer to add more PJC.A if I achieve my price target there.

Conclusion

My Canadian companies have performed well through the first half of the year. With that said, it is important to not put too much emphasis on short-term results. With the strategy we use here at GRB, the important thing will be achieving riches that last. Dividend-growth investing (DGI) is all about making steady gains toward a long-term objective.

Thank you for reading and stay tuned for Part II!

– Ryan

What do you think of my portfolio of Canadian companies?

Full Disclosure: Long TD. REI.UN, CM, BCE, PJC.A, CSW.B.

Pictures courtesy of pixabay.com