August Update. The “I’m getting old” edition.

Monthly Financial Update

Personal Highlights for August:

  • I just celebrated my 36th Birthday.  Wow, I’m old..and I’m feeling it.  My back hurts, I got some weird growth on my eyelid, grey hairs are everywhere…So how did I celebrate being so damn old?  Naturally the wife and I played Super Mario World and had some drinks…
  • In Lieu of random back pain, an ever expanding beer belly and general “oldness” I decided I should probably do something.  I registered for soccer (starting in October) and have started running a few miles on the treadmill each night.
  • The Premier League has started up again, and I decided to check out the 1 month trial of the subscription service DAZN.  So far I’ve only watched 2 games, but I’m leaning towards keeping it.
  • Amber got me a bunch of syrups & bitters to add to my cocktail collection, from a locally made company ABIDING CITIZEN.  Here is my updated collection:
    Bitters and Syrups
  • Financial Highlights for August:
  • Continued bi weekly payments into spousal RRSP  (30 units of US Equity Index Fund) and TFSA
  • Sold my cocktail Arcade table for $1200 on Facebook Marketplace that was just collecting dust in the basement.
  • Transferred half my work RRSP into my direct investing plan.  With the proceeds I added 1100 shares of XAW, 1000 unites of RBC Canadian Equity Income Fund, 244 shares of CAE and 256 shares of GSY.
  • Paid dividends from 5 companies, and 1 funds.  Dripped a total of 23.5 new shares/unites.

Passive Income Update For August 2019.

TFSA’S:

Diversified Royalty: $10.01 (dripped 3 shares)

Artis Reit: $27.36 (dripped 2 shares)

Interrent Reit: $4.01

Plaza Reit: $28.30 (dripped 6 shares)

Chorus Aviation: $11.60 (dripped 1 share)

TFSA’s Total: $ 81.28

RRSP:

Canadian Equity Income Distribution: $334.34 (dripped 11.5 new units)

Total Passive Income August 2019:  $415.62

Portfolio Update:

Total passive income in August was $415.62.  This represents a 24.17% increase from last August!

My portfolio currently sits at: $329,590.46.  This represents an increase of 2.63% Year over Year.

Thanks for reading, Cheers!

 

New Buy(s)! Doubling down on 2 favourites and started a new position.

Increased Dividends by $2700!

If you’ve been following my monthly updates, you will remember that I was in the process of transferring over a work RRSP into my direct investing RRSP account.  A portion of the funds finally made it over, and I wasted no time and put the money to work. The funds were previously invested in a mutual fund with a 2.2% MER, that was performing slightly below it’s benchmark.  So what did I buy?

Ishares All Country EX Canada:XAW

The first thing I purchased was 1100 shares of XAW.  This fund is not new to me, I already owned about 2600 shares.  I use this fund for US & global diversification.  It was an extremely low MER (0.22%) and is extremely diverse (over 8000 stocks across the world).  The fund covers everything except Canada, which is perfect for me, because I use my TFSA for individual Canadian stocks AND I own one other fund that is purely Canadian equity (more on that later).  XAW is a fairly new ETF, it was started in 2015 so there isn’t too much long term data on the performance.  That said since the fund’s inception it has returned 8.31%.  The fund also pays a distribution twice per year (June & December) and based on the last 2 payments this purchase should add $624.40 to my annual dividend income.

RBC Canadian Equity Income Fund Series D

Mutual Fund Performance

The next thing I did was add to my position in the RBC Canadian Equity Income fund.  I purchased 1000 additional shares, bringing my total share count to 3294.  Typically I am not a fan of mutual funds as they carry a higher MER, however this fund has performed exceptionally well for me, it is diversified, and pays a monthly distribution.  The fund holds 86 Canadian companies (mostly blue chip dividend payers) and RBC allows the fund to DRIP shares each month.  The fact that this is a “series D” fund*, means the MER is lower than the normal series A fund.  It is still higher than most ETF’s, but it’s much more reasonable (at 1.04%).  Over the last 10 years this fund has beat the benchmark and returned over 11% annually!  This purchase will add $1218.00 to my annual income, thus allowing me to drip an additional 3-4 shares each month.

*Series D funds are available to direct investors.  They offer all the same holdings as the series A fund, however you must purchase them yourself.

NFI Group – New Position!

NFI

Lastly I initiated a position in NFI Group by purchasing 500 shares.  The timing may have been a bit of a gamble, as they are expected to announce earnings today.  Last month the management team had come out and said they expect to miss on earnings.  The stock plummeted and I am hoping the downside is already priced in.  I still think long term this will be a great hold.  I wrote a bit more about NFI Group HERE.  I also kept some cash leftover in case the price comes down further after the earnings are released. The purchase of 500 shares will add $850 to my annual dividend income.

So although these purchases weren’t from any new capital being injected into my portfolio, I believe they will perform better than the fund they were previously invested in, the fees will be lower, and they will add an extra $2672 to my passive income!

 

 

2 stocks for long term investors near 52 week lows

2 Canadian stocks to check out

Here are 2 stocks currently at or near their 52 week low.  Each has their own challenges, but I believe both will look like great deals a couple years from now.  If you have time on your side, and can stomach some short term volatility I recommend looking a little closer at the following:

Diversified Royalty $DIV

DIV is a royalty corporation that pays out royalties each month, and currently owns the following royalty streams:

  • Mr. Lube
  • Air Miles
  • Sutton Realty
  • Mr. Mikes

The stock has dropped significantly over the last couple of weeks because investors are concerned about the payout ratio.  The company’s payout ratio is currently over 100% which is typically unsustainable and usually results in a dividend cut.  The situation is a little bit different here, because DIV is sitting on a pile of cash from a previous sale, so they can afford to continue to pay out over 100% for the foreseeable future.  Obviously this cannot go on forever, and eventually they will need to increase revenue to get the payout ratio in line.  The management team is continually looking to add new royalty streams (and has the cash to do it).  I am confident they will pull off another deal before the need to cut the dividend.  They seem to be confident as well, as insiders have continued to buy shares.  If you are okay with a little turbulence in the share price, and confident they can pull off another deal, now might be a good time to snatch up some shares as the recent dip has driven the yield up to almost 8%!

The RBC street consensus has this listed as a strong buy as well.

 

NFI GROUP (Previously New Flyer) $NFI

With over 8,900 team members operating from more than 50 facilities across ten countries, NFI is a leading independent global bus manufacturer.  SOURCE

Here is another stock that has taken a beating lately.  The stock is at it’s 52 week low, and currently trading at $28.26.  To put in perspective just how far it has fallen; in September the stock was trading  over $52.00.

The stock had run up and basically got ahead of itself.  It was trading at an extremely high P/E of 25+ on top of that they recently announced a few setbacks and a lowered updated guidance.  This got investors thinking they should take some profit and cash out.  The stock now trades at a reasonable P/E of 9.5.   The company is still fundamentally sound, and pays a hefty yet safe 5.94% dividend.  If you believe (like I do) that hybrid, electric vehicles are the future, than NFI seems a safe bet to continue to grow.

There may be some continued downward pressure in the short term, but again if you are a young investor with time on your side, I’d gladly tuck this one away in a TFSA or RRSP, collect the dividend and wait for the stock price to catch up.  I’d look at this anywhere below $30/share.

RBC currently rates this a buy with a fair value of $37.64.

*I currently own Diversified Royalty, but have no position in NFI.  That said, it is on my watchlist and I may start a position in it soon.

Is this Canada’s Best REIT?

Interrent Reit

This REIT is the gift that just keeps on giving.  I originally purchased IIP.UN about 15 months ago when it scored very highly on my stock screen.  The original purchase price was around 9.90/share.  I also recently added to my position when it dipped due to a stock offering to purchase more properties.

In the 15 months I have owned this REIT, I’ve already seen a couple of dividend increases, capital gains of over 35% and the future looks even better.  I wont get into what Interrent Reit is since I’ve already written about them a couple a times.  Here is the article I wrote when I originally purchased this stock:  New Purchase..and the one that got away(for now)

Well, Interrent just released their earnings and they looked GREAT.  A few highlights:

  • Operating revenues increased by 12.4% over Q2 2018
  • Average rent per suite increased by 6.9% over Q2 2018
  • Net Operating Income increased 15% over Q2 2018
  • Same property NOI increased 15.2% over Q2 2018
  • AFFO increased 29.9% while Fully diluted AFFO increased 16.8%
  • Eight consecutive quarters of double digit growth!

Basically every single metric is getting better, the payout ratio is still extremely low (for a REIT) and I’d expect them to continue to raise the dividend over the years.  The only downside to this company right now is the yield is low for a REIT, however I will gladly take a lower yield (that is growing every year) when the stock price is generating a +25% annual  average return over the last 4 years!

Interrent Reit IIP.UN

Stock Analysts love it too!

Don’t take my word for it.  The analysts continue to upgrade the stock as well.  Here are a few from this week:

  • Laurentian Bank analyst changed his rating from HOLD to BUY
  • TD maintains their BUY rating and increased price target to $16.50
  • RBC increased price target by $1.00

 

My only regret (both times I purchased it) was not having enough capital to buy more!  I’ll be keeping an eye on IIP and look to add if it dips again (if that ever happens).

What do you think? Do you own IIP.UN? Would you consider adding at the current price?