Thursday, 18 January 2018

New Purchase - Capital Power Corp (CPX)

Today, I used fresh cash ($5,748) along with the proceeds from the sale of EMP.A and XTC to buy 604 shares of Capital Power Corp (CPX) @ $23.60. It pays a dividend of $1.67 per year, and the company plans on increasing the dividend by 7% per year through to 2020 (that’s 3 increases @ 7%). My total investment is $14,264.35, adding $1,008.68 to my yearly dividends – they now stand at $10,716.

So, why am I convinced this is a good investment? Read on…

On Jan. 9, 2018, President and Chief Executive Officer Brian Vaasjo purchased 2,300 shares at an average price per share of $24. The previous day, he bought 8,050 shares also at an average cost per share of $24. These trades lifted his portfolio's position to 94,680 shares.

On Jan. 12, 2018, Jill Gardiner, who sits on the board of directors, acquired 1,280 shares at an average price per share around the $23.44 level, increasing her account's position to 6,705 shares.

John Heinzl published an article on October 31, 2017, “A 6.8 per cent dividend yield that’sactually safe”. You can read the full article if you have a Globe and Mail subsription. If not, here is an excerpt:

Even as the company has been increasing its dividend, its payout ratio is a comfortable 48 per cent of adjusted funds from operations (AFFO) for 2017, falling to 44 per cent in 2018, according to analyst Patrick Kenny of National Bank Financial. Despite Capital Power posting a net loss of $5-million, or 13 cents a share, in the third quarter – reflecting non-cash charges – Mr. Kenny maintained his "outperform" rating and $33 target price, noting that Capital Power still expects AFFO to come in near the midpoint of its guidance range of $340-million to $385-million in 2017. (AFFO is based on net cash flow from operating activities, adjusted for a number of items, and is "a measure of the company's ability to … fund growth capital expenditures, debt repayments and common share dividends to the company's shareholders," Capital Power says.)

Raymond James is positive: "The company's pipeline of [North American] wind projects represents a key element of our constructive stance on CPX," Raymond James analyst David Quezada said in a recent note, in which he reiterated his "outperform" rating and $30 target price on the shares.

Veritas Investment Research is also positive: "Given its commitment to return significant amounts of capital to shareholders through fiscal 2020, combined with the long-term advantage of a young asset fleet, we believe CPX is an appealing income investment," said Darryl McCoubrey, who has a "buy" rating and $29.50 intrinsic value estimate on the shares.

In addition to the above, there is an excellent article on seekingalpha that goes into the financial details.

Note:

I bought shares of EMP.A (Sobeys) 2 years ago and its been dead money. The dividend yield is quite low (1.7%) and the dividend growth has been pathetic @ 0.5% per year. They really screwed up the purchase of Safeway Canada.

As for XTC, I bought the shares in January 2017, and I'm underwater about $600. I'm pissed with myself that the market has boomed and this has been shit.

Wednesday, 17 January 2018

Dividend Increases - Telus, ENB, ACO.X, CU

On November 9, Telus increased its quarterly dividend from $0.4925 to $0.505, or 2.5%. Since I own 398 shares, my yearly dividends increase by $19.90.

On November 29, Enbridge increased its quarterly dividend from $0.61 to $0.671, or 10%. Since I own 400 shares, my yearly dividends increase by $97.60.

On January 11, Atco increased its quarterly dividend from $0.3275 to $0.3766, or 15%. Since I own 100 shares, my yearly dividends increase by $19.64.

On January 11, Canadian Utilities increased its quarterly dividend from $0.3575 to $0.3933, or 10%. Since I own 100 shares, my yearly dividends increase by $14.32.

2018 Dividend Increases

Telus: +2.5%, $19.90
ENB: +10%, $97.60
ACO.X: +15%, $19.64
CU: +10%, $14.32
CVS: 0%

Saturday, 13 January 2018

My Total Return on TGT

All my TGT shares have done is pay me a dividend, that is until last week, where the share went from about $66 to $76. Finally!

Those who bought in June or July 2017 at close to $50 have done extremely well for themselves (provided they didn't sell). Unfortunately, I sold 50 shares at $50.65 to raise cash for the purchase of my Tahoe. Fortunately, I sill have 250 shares.

I've been in TGT since 2012 and at one point, my total return was close to -20%. Today, my total return is 26%. With dividends, it's 40%. Those numbers are nice and big. They make me feel good! But how about the CAGR?

Because there were cash deposits (i.e. share purchases) and cash withdrawls (i.e. shares sold, dividends received) spread out over time and at irregular intervals, I used the XIRR formula in Google Sheets to calculate the CAGR. The table below shows my CAGR is just over 9% with dividends and just below 6% excluding dividends.


Friday, 12 January 2018

Closed my Call on GIS

As discussed in my previous post, I sold a Call option in GIS on Dec 26th. Since then, the share price has fallen a couple dollars and I decided to close the option.

On January 11th, I bought to close (BTC) the Call option. The transactions are:

Sold 1 GIS Call Apr 20 '18 $60 @ $2.43 ($11.20 commission + $0.01 SEC Fee)
BTC 1 GIS Call Apr 20 '18 $60 @ $1.38 ($11.20 commission)

I netted $82.59 over 16 days. 

I will consider selling another call option on GIS should the share price surpass $60.