Tuesday, 5 July 2016

New Milestone and a Sell

Although it may be short lived, my dividend growth portfolio finally popped over $400,000 CAN, $30,400 of which is in cash (my non-registered account cannot be seen on the screen shot below because I have to scroll down to view it).



Last week, I unloaded my 100 shares of UL @ $48.07 because
1. the PE is in the mid 20's.
2. the dividends received have decreased over the last two/three years (due to forex).

Q1Q2Q3Q4
2014$0.3654$0.3938$0.3842$0.3637
2015$0.3253$0.3140$0.3232$0.3385
2016$0.3246$0.3598??

3. given Brexit, i don't believe the Euro (in which dividends are declared) is going to appreciate relative to the USD. So dividend payments in USD will continue to be low for some time to come.
4. my average dividend yield analysis shows that $40 is a fair and $35 is undervalued. So $48 is a little high.
5. i don't understand why the stock suddenly rallied to $48. It might be due to Mondelez making a bid for Hershey.

Friday, 1 July 2016

Bolt-on Purchase - Empire Company

On June 29, I took the opportunity to increase my holdings in EMP.A. Quarterly results were not great and the stock price was down 11%. The integration of their Safeway Canada aquisition is proving very difficult which is the reason for their poor financial results.  A day prior to my purchase, the company announced a 2.5% dividend increase.

EMPIRE COMPANY LIMITED (TSX: EMP.A)  is a Canadian company headquartered in Stellarton, Nova Scotia. Our key businesses are food retailing and related real estate, through wholly-owned subsidiary Sobeys Inc., and a 41.5% equity accounted interest in Crombie REIT. With $24.6 billion in annualized sales and $9.1 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 125,000 people.

EMP.A (I averaged down):

Number of shares purchased
100
Price per share
$19.20
Commission
$9.95
Total cost per share
$19.30
Total cost
$1,929.95
Annual dividend per share
$0.41
Initial dividend yield
2.12%
Increase in forward 12-month dividends
$41.00

My initial purchase of EMP.A was on March 14, 2016: 145 shares @ $22.27.

With this purchase, my 12-month forward dividend income is $11,139.

Tidbit

On August 9, 2009, I bought 495 shares of EMP.A @ $13.73.  The dividend yield was 1.8%.
I sold these shares on July 9, 2014 @ $23.73 because of low dividend yield + low dividend growth.