Friday, 10 June 2016

Bolt-on Purchases - GM and Telus

Today, I took the opportunity to increase my holdings in two companies.

GM (I averaged down):


Number of shares purchased
60
Price per share
$29.19
Commission
$9.95
Total cost per share
$29.36
Total cost
$1,761.35
Annual dividend per share
$1.52
Initial dividend yield
5.18%
Increase in forward 12-month dividends
$91.20

Telus (I averaged up):


Number of shares purchased
125
Price per share
$40.42
Commission
$9.95
Total cost per share
$40.50
Total cost
$5,062.45
Annual dividend per share
$1.84
Initial dividend yield
4.54%
Increase in forward 12-month dividends
$230

My 353 shares of Telus are throwing off $650/year and the company has stated that it will increase its dividend by 7 to 10% per year up till the end of 2019. So $650*1.07^3 = $796. That's a little closer to the $980/year Telus is charging me for my cell phone service.

With these purchases, my 12-month forward dividend income is $11,090.

Thursday, 9 June 2016

New Purchase - TGT

Today, I added to my position in TGT. It seems like the stock price is down because of their bathroom policy, and just like everything else that's happened to Target (think exit from Canada and credit card breach), this will blow over.

I like what Brian Cornell has done and is doing.

Number of shares purchased
50
Price per share
$67.52
Commission
$9.95
Total cost per share
$67.72
Total cost
$3,385.95
Annual dividend per share
$2.40
Initial dividend yield
3.54%
Increase in forward 12-month dividends
$120


With this purchase, my 250 shares of TGT have an average cost of $62.87 and my 12-month forward dividend income is $10,750.


Wednesday, 8 June 2016

right on target

Yes. The pun is intended. A nice 7.1% dividend increase from Target today, which is pretty much what I was expecting (just read my article published yesterday). 

That means the quarterly dividend is going from $0.56 to $0.60, my 200 shares have a YOC = $2.40 / $61.66 = 3.89%, and I'm getting $32 more per year.

Not a bad day.

Tuesday, 7 June 2016

Options Trade - Target

After the recent market run up, it seems value can only be found in companies people love to hate. GM is one. TGT is another.

My average dividend yield analysis of TGT shows the average 3 and 5 year yields to be 3.0% and 2.63%, respectively. Using the current dividend, that corresponds to $74.72 and $85.08. Because TGT is trading at a discount to these prices, I decided to sell a put option on this baby:

Jun/06/2016 Sold 1 TGT Jan 20 '17 $67.50 Put @ 4.40 ($11.21 fee)

If I get put the shares, my cost (after commission) would be $63.22.

Last year, TGT announced a 7.7% dividend increase on June 9. If they announce a 7.1% increase this year (i.e. $2.40 annually), the 3 and 5 year yields would correspond to share prices of $80.08 and $91.16.

The FAST graph below indicates that EPS are estimated to increase about 10% in 2016, 2017 and 2018. I couldn't believe these numbers so I checked S&P and they estimate 2017 and 2018 EPS at $5.25 and $5.70, respectively. Is it me, or is it a magical time (yeah yeah, I've got Donna Lewis - I Love You Always Forever - blasting on my Focal Aria 926)?






Sunday, 5 June 2016

Options Trade - GM

In January 2016, I bought 100 shares of GM. Ever since, the stock has been range bound. So far, this has allowed me to make some extra money buying and STC call options:

16/Feb/2016 Bought 1 GM Sept '16 $30 Call (-$181.21)
21/Mar/2016 STC 1 GM Sept 16 '16 $30 Call (+$293.80)
Profit: $112.59


08/Apr/2016 Bought 1 GM Sept 16 '16 $30 Call (-$157.20)
25/Apr/2016 STC 1 GM Sept 16 '16 $30 Call (+$278.79)
Profit: $121.59

And on Friday:

03/Jun/2016 Bought 1 GM Sept 16 '16 $30 Call (-$127.20)

As I commented on My Dividend Pipeline's recent purchase of GM shares, I believe the current price offers excellent value.