April: Saying Goodbye, Dividends, Birthdays & A Podcast

Dividend Income & Portfolio News

Personal Highlights – April 2020

• Let’s get the bad news out of the way first.  We had to say goodbye to our sweet dog Penny this month.  She was a beautiful girl, with a gentle soul.  She lived a long, happy life and graced us with so many memories.  I even proposed to my wife with the dog (as a surprise) almost 12 years ago.  Here are a few of my favourite pics of Penny:
  
  

  

  

  

  

• Losing a pet is never easy – it’s even worse when you are in the middle of a global pandemic with two toddlers at home.  The kids have handled it pretty well so far.  Every now and then they(we) have a cry and remember the good times with Penny.
• Onto some less depressing news.  The weather has finally started warming up, so we have been able to get out into the back yard and stretch our legs a bit more.  Isaac just had his 3rd birthday, and got a lot of outdoor/yard toys.  I expect the next few days will be spent almost entirely in the backyard playing with new toys, kicking a ball around and of course drinking some cold beers.
• I was a guest on a podcast for the first time ever. I had a great time, and although it’s clear it was my first time..i’d definitely do it again. It was the FI_Garage podcast.  The guys sit around, drink beer and talk about investing.  What’s not to love.  You can check it out HERE
• I started re-watching Parks & Recreation with the wife since she has never seen it. If you haven’t ever seen it – do yourself a favour and check it out. It streams on Amazon prime.
• I posted some hopefully possible positives that could come from the Covid 19 pandemic.  You can read that post HERE
• My little man turned 3 on April 28.  Although we couldn’t get the family and friends together for a big party, we had some people drop by with presents, and still spoiled him with pizza and ice cream cake.  Here’s a few of our favourite photos of our little baby boy…I cannot believe he is 3 already!

• Financial Highlights for April:

• Continued bi weekly contributions into TFSA, Wife’s TFSA & Spousal RRSP
• Took a temporary pay cut at work due to Covid.  It’s hard to complain when so many people have lost their jobs. We are lucky in the sense we can both work from home, and are at least saving some costs on daycare for the time being.  That said, we miss our daycare family so much and cannot wait until the kids can go back.
• Our variable mortgage rate dropped, which ends up saving us about $200 per month.
• Since the Covid pandemic, I have received dividend suspensions from CAE and Chorus Aviation. I ‘ve also received  dividend cuts from: Diversified Royalty & New Flyer Group.  I expect my distributions from XAW & RBC Canadian Equity Income fund to be lower than expected as well.
• I was paid dividends from 9 companies, and 1 funds this month.  I dripped a total of 86 new shares/units.  These reduced prices have caused a huge spike in dripped shares per month. SIX double digit drips this month!
• Portfolio increased over $42,000 month over month, and is now back to the same level it was at in August. I don’t understand this market. I feel like we are in for another big drop…but I also thought it would have happened already, so who knows.

Passive Income Update For April 2020.

TFSA’S:

Diversified Royalty: $26.00(dripped 18 shares)

Artis Reit: $28.08 (dripped 3 shares)

Algonquin Power: $185.31 (dripped 10 shares)

Interrent Reit: $4.29

Plaza Reit: $29.44 (dripped 10 shares)

Chorus Aviation: $36.76(dripped 12 shares)

TFSA’s Total: $309.88

RRSP:

Canadian Equity Income Distribution: $351(dripped 13 shares)

Transcontinental: $192.83 (dripped 16 shares)

New Flyer: $57.16(dripped 4 shares)

Go Easy: $123.75

Total Passive Income April 2020:  $1034.62

Portfolio Update:

My portfolio jumped back up to: $329,207.77.  This represents a increase of 14.78% from last month. This market is crazy.  Over the last 3 months, my portfolio has gone:
– 5.41%, -19.73%, +14.78%

My long term plan hasn’t changed. I haven’t sold a single stock, and I continue to look for good deals.  I’ve updated my watchlist, I am currently keeping an eye on: Manulife, First National Bank, Alimentation Couche Tard, Metro and Canadian Western Bank (among a few others).

Passive income in April was $1034.62.  This was the second time in the first 4 months of 2020 my income was over a thousand!  I only achieved $1000+ twice in all of 2019!

Stay safe!

Cheers.

 

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Black Manhattan: A Twist On a Classic

Classic Cocktail Twist: Manhattan

The Black Manhattan is one of my new favourite drinks.  If you are a cocktail person, you are most likely familiar with a classic Manhattan.  If you are not a cocktail person a classic Manhattan is Rye, Sweet Vermouth & Bitters.  It’s a very boozy drink, but absolutely delicious.  I love a classic Manhattan, but I have to say, lately I’ve definitely been preferring a Black Manhattan.

Black Manhattan Vs Classic Manhattan

So what’s the difference between a regular classic Manhattan & the Black Manhattan?

As you can see, the only difference is swapping the vermouth for Averna.  As far as ingredients go, these drinks are VERY similar.  That said, don’t let it fool you, the flavour profile is completely different.  Aside from the dark complexion, the Averna gives the drink a more herbal/medicinal feel – but in a good way.  I like to make mine with a hint of sweetness ( I add a spoonful of Maraschino syrup).

Ingredients:

2 oz Rye Whiskey (You can substitute with Bourbon but traditionally a Rye).

1 oz Averna Amaro

2-3 Dashes Angostura Bitters

1 barspoon Luxardo Cherry Maraschino Syrup

*Garnish with 3 Luxardo Cherries.

 

Directions: 

Add all ingredients into a mixing glass with ice.  Stir for 20 seconds.  Strain into coupe glass.  Garnish with 3 cherries.  Enjoy.

This drink will go down fast and smooth.  Don’t let that fool you. It is a boozy one.  Take your time, enjoy it.  That said, if it goes down too fast – no worries, make yourself another one…after all it’s only a few ingredients!

 

Cheers!

3 Penny Stocks guaranteed to double in 2020!

3 Penny Stocks Set To Double In 2020

Okay, seriously. If you ACTUALLY clicked this headline – this is for you.

Stop chasing penny stocks.

Stop chasing unsustainable high yields. 

If you think you will find your next great stock on a blog, facebook group, reddit thread or from a friends “hot tip” – you probably shouldn’t be buying individual stocks.  I cannot count the number of people I’ve had message me over the last couple of weeks asking about penny stocks, oil stocks, etc.  People who have never invested a penny in their lifetime, messaging me telling me they are going to easily double their money in the next few months….

Are there some penny stocks that will double this year? Of course.  Do I (or anybody else) know which ones?  Of course not. If we did, we’d be billionaires.  The amount of people searching for “good penny stocks” or “best monthly paying stocks” or “dividend stocks yielding over 10%” is astounding…and it’s dangerous.

We’ve all been there, starting out trying to figure out what stocks to buy, how to make a quick buck.  Almost every experienced investor will tell you they got got burned early on, either chasing yield, listening to a hot tip or speculating/gambling.

High Dividend Yield Stocks

Almost everyone agrees getting a dividend payment from their stock is great.  It feels good, you can reinvest that money or use the cash – so why wouldn’t you want to find stocks that pay out the biggest dividends?  The answer is simple:

Sustainability & Future Dividend Growth

Owning shares in a company that pay a dividend feels great. You know what feels even better though?  Having confidence that the dividend will not only be around for years to come, but that it will continue to increase.  What good is a 10% dividend yield if it gets cut next month – or if the stock price declines 15%?

Here are some metrics that can help give you confidence in the sustainability of a dividend:

Payout Ratio & Earnings Per Share

Payout Ratio: This one is pretty straightforward.  What percent of earnings is the company paying out to its shareholders as dividends.  For an extremely simplistic example, assume company ABC makes $100 this year, and pays an annual dividend of $50.  The company would have a payout ratio of 50%. Look for companies that have a conservative payout ratio.  Payout ratios will vary between industries, but typically you want to find a company that is paying out less than 40-50% of annual earnings.  The big exception here would be REITS – but that is a discussion for another day.

Earnings History & Projections

Another important metric to focus on is earnings per share.  Are earnings increasing?  A super conservative payout ratio is great, but if earnings are falling each year, that payout ratio, by default will start to increase.  If a company is not able to increase its earnings, eventually the dividend is going to get cut.  Look for companies that have a history of growing their earnings per share, in good times and bad.

Strong Balance Sheet

Always look at the financial statements for a company before pressing the “buy” button.  A lot of metrics could look great, but if a company is over leveraged, it means they could be at risk in the future.  Always ensure a company has no problem meeting its debt obligations.  If they can’t this means they may need to raise equity (issue more shares/dilute your stake in the company), cut back on costs (cut dividends), or worst case face a possible bankruptcy.

Dividend Growth History

Lastly, look for companies that have a history of increasing their dividend each year.  This typically shows they have confidence in the business, and they like to reward shareholders.  It is important to do your own research, and just because a company has increased their dividend for 10+ years in a row, doesn’t mean it can’t or won’t get cut in the future.  That said, if a company has strong and growing earnings, increasing revenue, a strong balance sheet and a history of paying a growing dividend, you are probably on the right track.

Finally, since you may have been lured here with the click baity headline, and the hopes of finding 3 great stocks to buy, out of pure guilt I will post 3 Canadian stocks below I believe meet the following criteria:

• Conservative Payout Ratio
• Increasing Earnings
• Strong Balance Sheet
• Dividend Growth History

3 Canadian stocks to consider:

1. Alimentation Couche Tard
2. Metro Inc
3. CN Rail

 

As always, do your own due diligence.  Happy Hunting.
Cheers.

 

 

 

 

 

Jefferson’s Reserve Bourbon Review

Spoiler Alert – I decided to write this review because I was craving a sip of Blanton’s bourbon, but I didn’t have an open bottle.  As a general rule I only open a new bottle once I finish one of my open bottles.  I had about 1.5 ounces left of Jefferson’s, noticed I hadn’t reviewed it yet, and needed to clear some space on the bar shelf…so here it goes.

This is a bottle my sister got me for Christmas 2 years ago.  I had never had it previously, and I’ve been nursing this bottle for a while. Jefferson’s seems to sell for quite a premium here in Manitoba (i’m not sure why).  The bottle retails for $97.00 Canadian at the Manitoba Liquor Mart.

Jefferson’s Reserve

Date Reviewed: April 07, 2020

Atmosphere: In a Glencairn glass, neat at home during the covid 19 pandemic

Distillery: McLain & Kyne

Mash:  Unknown

Age: No Age Statement

Type: Bourbon

ABV%: 45.1%

Price I Paid: Zero – but it retails for $97.00 Canadian

Appearance:  Classic Amber colour, but more watered down than most.

Nose:  I found this bourbon to be extremely muted. It lacks the typical sweet vanilla/brown sugar scents that most are accustomed to with a bourbon.  The only thing that stands out is some oak/wood but even that is pretty tame.  After a few swirls, some VERY subtle hints of cherry cola come out, but again very faint.  This might be the least expressive nose of a bourbon on any bottle I’ve had over $20.

Palate:  The taste follows the nose.  The oak from the barrels is the dominant flavour profile.  It is very smooth, with no burn, but leaves a lot to be desired.  The second sip is a little better, some sweeter notes slightly poke through, but it’s not enough to capture my interest.

Finish: The smooth finish is definitely the best part of this bourbon.  No heat, no burn, just a nice easy finish.

Conclusions:  It’s a tame, easy to drink bourbon, but it lacks any real depth.  If this was a $40 bourbon, I’d say keep a bottle for the finish alone – but at almost $100 it’s a hard pass for me.  When you can get Bookers or Blanton’s for the same price it’s a no brainer.  That said I’ve heard some of the other Jefferson’s expressions are real good (Oceans for example) which I will definitely try.

Overall Score:  73/100

Cheers.