I typically try my best to never carry any non mortgage debt. I’ve been pretty good at this over the last 10 years (Although I did have a line of credit I was using to invest with for a while).
Lately however, my credit card was actually carrying a balance for the first time. We had some big purchases for the new house, the Jets went on a long playoff run(more tickets), our new daycare is costing $1200 a month & I had a few people behind in their payments to me for Jets tickets. On top of all of that, I recently had a root canal which although will be reimbursed mostly via insurance cost almost $2000.
All that said, last week I did something I rarely do- SOLD a stock! I sold my full position in Alimentation Couche-Tard from my TFSA. I am still a fan of this company, and truth be told, I may look at getting back into this one if the stock dips again. I only had 125 shares, which were purchased for about 58.00 each. Although I didn’t hold the stock very long (just under a year) I ended up making a return after commissions of 8%. The proceeds were enough to cover the outstanding balance on my credit card and then some. With the extra cash, I left a little bit in my savings account, and put about $2000 to work upping my position in another stock….
Today I purchased an additional 1018 shares of Western Forest. I originally started my position in Western Forest in January of this year. Here is what I wrote back then:
The lowest priced stock on my list (trading at $2.68) this is a B.C wood producer that has shown consistent profits and has increased revenue over the previous 3 years. The dividend hasn’t grown in 5 years which is a slight concern, although with a payout ratio under 40% there seems to be some room to grow it in the future as long as revenues keep increasing and they can control their costs.
Since I wrote that, the dividend has in fact been increased. The company is still profitable, and has a strong balance sheet. The stock price has been hurt mostly due to the NAFTA concerns. The company clearly has confidence in it’s ability to produce, and believes it is oversold, as it recently bought back over 3 million shares. I scooped up these additional shares at a price of $1.93.
Although I think the price could stay depressed for a while , I’m okay holding and DRIPPING additional shares. At the current share price – this is yielding over 4.5%. This will allow me to drip 18 shares per quarter. There may still be room for another dividend increase as well, as the current payout ratio is still under 50%.
There are two other Canadian companies which I currently own, & have on my watch list right now as well. Both are trading at their 52 week lows:
Artis’ debt and payout ratio are a bit of a concern right now, so I didn’t pull the trigger on any new shares, however they are releasing their earnings in a couple of weeks, so I will keep a close eye and reevaluate.
Power Corp seems like another solid opportunity to sit on, and collect the juicy 5.45% yield while you wait for the stock price to recover.