August dividend update: another year older…

Dividend Income & Portfolio Update

Personal Highlights – August 2020

• Summer is almost over.  We spent a lot of time at the cabin this summer – and in August we both took a week off work and spent the whole time at the lake.  My sister was in town for almost the whole month, so we had a lot of drinks, a lot of fun, and got to do a little relaxing too.
• I turned 37 this month.  Had a pretty low key birthday at the cabin, spent the day with the family and spent the evening sipping some bourbon and scotch. As Larry David would say “Pretty…Pretty…Good.”
  
• Although I haven’t been watching much (any) hockey since the Jets got knocked out, I have been watching quite a bit of soccer.  I was able to see a bunch of the Champions league games, including the final where Alphonso Davies made history and won the trophy.  I’ve also been watching some Nations League games, and starting next week the premier league starts back up!  If anyone is interested in joining a Premier League Fantasy league let me know and I’ll send you the details.
• I’ve got a pinched nerve in my neck/back – so I haven’t been too mobile the week or so – which also means no treadmill, bike rides, etc.  The good news is – it is starting to feel a lot better – and we just got word our indoor soccer season is going ahead as normal so that should be starting up next month!
• We had some crazy wind yesterday which resulted in a tree at the cabin being split in half and then knocking over and taking out a power line.  Luckily Manitoba Hydro took care of it right away, and it won’t cost me anything (Phew)!  See below:
  
  

  Financial Highlights for August 2020:

• August was an expensive month.  We had some car issues (brakes, rotors, battery), we paid preschool tuition for the year for my son up front and as usual had the bi-weekly daycare, mortgage and pre authorised investments withdrawals.  The good news is – it sounds my salary should be restored to 100% soon (took a temporary pay cut due to covid) AND the wife officially got a promotion/raise!
• In July I made my first 2 stock purchases since the pandemic – I followed that up in August with another purchase of 573 shares of European Residential Reit.  This purchase adds an additional $94.20 to my dividend income, and allows me to drip a new share each month.  I plan to add more to this position if it dips below $4.10 again when I have some money in my TFSA.
• August is one of my slower months as far as Dividend income goes, and one of the only months this year I didn’t crack $500
• I was paid dividends from 4 companies, and 1 funds this month.  I dripped a total of 36 new shares/units.

Passive Income Update For August 2020.

TFSA’S:

Artis Reit: $28.62 (dripped 3 shares)

Diversified Royalty: $23.25 (dripped 12 new shares)

Interrent Reit: $4.29

Plaza Reit: $30.28 (dripped 8 shares)

TFSA’s Total: $

RRSP:

Canadian Equity Income Distribution: $356.31(dripped 13 shares)

Total Passive Income August 2020:  $442.75

Portfolio Update:

My portfolio increased by 5.48% in August to: $374,440.55  I know I say this every month, but I expect continued volatility as well as a bit of a crash around the election.  That said, my plan hasn’t changed and I plan on holding if/when this does happen.

After the last 3 purchases (Manulife, Telus & European Residential Reit) I don’t have much cash left in my accounts so I haven’t been updating my watchlist.  My plan is to continue adding cash to my TFSA bi-weekly and eventually add to my position in ERE.UN.

Passive income in August was $442.75.  This was only the second time this year my income was under $500.  This is due to dividend cuts/suspensions due to Covid. Hopefully by middle of 2021, we start to see some of them being reinstated and some other dividend increases.

Since January 1st, I’ve earned $7790.14 in passive income.  Assuming no dividend cuts or increases, my current Forward 12 month dividend income is $11,898.58.  My goal for the year was $12,000 – and had Covid not hit I believe I would have been well ahead of that – but now I’m going to need to make an additional purchase or two to ensure I meet that goal.

Cheers.

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3 New Dividend Stocks Purchased (Finally)!

Canadian Dividend Stock Purchases

If you are a regular reader of this site (my mom), you will know it’s been quite some time since I’ve added anything to my portfolio aside from the regular monthly contributions to my US Equity Index Fund & Canadian Equity Income fund. In fact the last stock purchases I had made were way back on March 10th when I purchased shares of:

• Go Easy Financial
• New Flyer Industries
• Ishares XAW Ex Canada ETF
• Diversified Royalty
• Chorus Aviation

Fast forward 5 months, and after taking a pretty big beating (due to Covid) most of them are back to my buy price or higher (Chorus being the one big exception).  Although I haven’t purchased anything in 5 months, I have still been contributing bi-weekly amounts into my TFSA, and I have been updating my watchlist, and keeping tabs on a bunch of stock prices and news daily.  A few that I have been following quite closely for the last few months include:

• Bank of Nova Scotia
• Telus
• Metro
• Alimentation Couche Tard
• Manulife

So what did I end up buying…

Dividend Purchase 1: Manulife

I was able to grab 146 shares of Manulife in my wife’s TFSA.  I picked these up for $18.08, and I was happy because as long as the stock price didn’t jump above $20.44 I would be able to DRIP 2 new shares per quarter.  Well, the good news is, within about a week of owning these shares I am already up 13%!  The bad news is, as of today, I will only be able to DRIP 1 share per quarter.  My plan is to continue to add to $MFC if it dips again.
This purchase added an additional $163.52 to my yearly dividend income.

Dividend Purchase 2: Telus

Telus was a stock I’ve been watching for months.  It was one that just wasn’t coming down too far in price compared to most, but I really wanted to grab some shares.  I finally bit the bullet on a day it dipped, and grabbed 180 shares for $22.99.  I’m already up over 6%, but I plan on holding this one for the long haul.  At the current price I will be able to DRIP 2 shares per quarter.  I don’t plan on adding more at this point since Telus is also held in my RBC Canadian Equity income fund as well.  Eventually I plan on selling some of the RBC Fund and picking up more XAW.  When I do – I may look at adding more Telus shares.  This purchase adds an additional $210.60 in yearly dividend income.

Dividend Purchase 3: European Residential Reit

ERE.UN is a stock I’ve followed a little over the last 6 months.  If I am being honest, mostly because I see a lot of other people I know & respect buying it/talking about it.  I kept it on my watchlist but hadn’t investigated it too seriously – until this week.  They released earnings earlier this week, and things looked pretty good.  I decided to start a small position with the intention of adding a bit more if it dips again.  I added 573 shares at $4.10 each.  This purchase allows me to drip an additional share each month, and adds $91.98 to my yearly dividend income.

Forward Dividend Income Update

If you recall, back in March I had passed my goal of $12,000 in forward dividend income, however after covid started decimating the markets, and global GDP began getting demolished, I very quickly had some painful dividend cuts and suspensions.  These included:

• Diversified Royalty Income – Slight cut to their dividend
• Western Forest – Suspended their dividend
• CAE – Suspended their dividend
• Chorus Aviation – Suspended the dividend
• New Flyer Industries – Cut the dividend in half

These cuts dropped my dividend income by almost $2000 meaning I was quite a bit behind my goal of $12,000 in forward dividend income.  Although I am not quite back yet, with these recent additions, I added $465.80 and I am happy to report my current forward dividend income is $11,894.72!

Hope everyone is staying safe out there.  Cheers!

July 2020 Dividend Report & Pizza

Dividend Income & Portfolio News

Personal Highlights – July 2020

• July started off pretty good.  The kids are back at daycare, most weekends at the cabin, nice weather..and then everyone got sick.  I forgot how quickly germs spread at daycare. It took a whopping 8 days before both kids got a cold, and in turn got both my wife and I sick.  That said, the kids are super excited to be back and seeing their friends, and since we are both working from home now – we are probably even more excited 🙂
• Although we’ve been spending most weekends out at the lake, whenever we stay in the city instead we’ve been trying to do something new or different.  So in July, a few things we did as a family; we had a picnic and ice cream at Assiniboine park, spent a day at the zoo and made home made pizza (pictured below is the kids creation)
  
• I put up a basketball net in my driveway and have been getting out once or twice a day for a few minutes to get some fresh air and shoot some hoops.  I forgot how much fun basketball is, and it’s nice to get away from the laptop for awhile every now and then.
• Thanks to my father in law, I got a bicycle in the city now!  Although I don’t plan on becoming a major cyclist, I am looking forward to some nice leisurely rides through the neighbourhood, and over to some friends houses for some backyard bourbon and beers without having to worry about driving home after.
  

  Financial Highlights for July 2020:

• I’ve continued with my bi-weekly contributions into my TFSA, spousal RRSP & wifes TFSA.  I noticed I had started to build up a decent amount of cash, and had started looking for a new stock or two to buy.  In June I updated my watchlist. You can see that HERE
• I made my first two stock purchases since the covid pandemic started.  I picked up 180 shares of Telus and 146 shares of Manulife.  These two purchases will add an additional $374.12 in yearly tax free dividend income!
• July was my second consecutive month of over $1000 in passive income.
• I was paid dividends from 9 companies, and 1 funds this month.  I dripped a total of 68 new shares/units.

Passive Income Update For July 2020.

TFSA’S:

Power Corp of Canada: $100.69 (dripped 4 shares)

Artis Reit: $28.49 (dripped 3 shares)

Diversified Royalty: $23.05 (dripped 12 new shares)

Interrent Reit: $4.29

Plaza Reit: $30.10 (dripped 8 shares)

Algonquin Power: $201.83 (dripped 12 shares)

TFSA’s Total: $388.45

RRSP:

Canadian Equity Income Distribution: $354.91(dripped 13 shares)

GoEasy Financial: $123.75

New Flyer Group: $58.01 (dripped 3 shares)

Transcontinental: $196.43 (dripped 13 shares)

Total Passive Income July 2020:  $1121.55

Portfolio Update:

My portfolio jumped a bit in July to: $354,977.52  This represents a increase of 3.33% from last month. I expect continued volatility in the market (and my portfolio) for the foreseeable future due to covid and the upcoming US presidential election.

My long term plan hasn’t changed. I haven’t sold a single stock, and I continue to look for good deals.  I pulled the trigger on two stocks on my watchlist this month (Telus & Manulife).  My plan is now to wait until the US election is over to make any other moves in the market.  That said, I will continue to keep my eyes open for any stocks that meet my screening criteria and fall to an attractive price.

Passive income in July was $1121.55.  This was only the second time in my investing history, that I’ve ever had back to back months over $1000 in dividend income.  It was my fourth month in 2020 with over $1000!  To put that in perspective, in all of 2019 I only cracked one thousand once!

Since January 1st, I’ve earned $7347.39 in passive income.  The second half of the year unfortunately won’t be as strong, as there won’t be another big XAW distribution until January 2021.

Assuming no dividend cuts or increases, my current Forward 12 month dividend income is $11,763.01.

This Canadian REIT is doing all the right things.

Artis Reit continues to impress

It’s been a rocky ride for this Canadian REIT.  Just last year Artis Reit cut their distribution in half, saw their stock hit a 52 week low and had investors scrambling to sell.  At the time of the distribution cut, they announced a plan to dispose of some non core assets, do a mass share buyback and explore “other opportunities” in other words – look for potential suitors to purchase the REIT.  In the days following the distribution cut he stock dropped to a low of $8.75.

Investors typically fell into two groups at the time.
Group 1: Sell this tire fire, cut our losses and move on.

Group 2: Continue to hold (or add) at these depressed prices, wait for the turnaround/buyout.  Have faith that management will turn things around.

I was a 100% a group 2 guy.  In fact, I even wrote a detailed post about my take on the dividend cut and the future of Artis exactly 1 year ago.  You can read that article HERE

If you don’t want to read the whole thing, here are a few things I said last November, when the stock had fallen to around 9.00.
“We should see a drop in price right away, but as the dust settles, I think in the long run this will in fact be good for the business.  As much as I enjoyed a juicy 9%+ yield, with the current earnings, it was unsustainable.”

“I’d hold and wait for the price to recover.  If the stock does take a big dip in the next day or two – consider loading up.  Keep in mind the net asset value for this Reit right now is 15.11”

Artis REIT 1 year later

It’s been a year since I wrote about Artis.  Let’s see how things played out…

*Spoiler alert* I was right!

Share Buybacks:  Since announcing their intention to repurchase shares, Artis has repurchased the maximum allowable # of shares allowed under the NCIB; a total of 15,959,760 at an average price of 10.84.  This is at a massive discount to the NAV, and the current stock price.

Payout Ratio: Prior to the distribution cut, Artis had a payout ratio of about 110%, which is of course unsustainable.  Fast forward to today, and Artis has an extremely low (for a REIT) AFFO payout ratio of 52.6%.  Keep in mind even after cutting the distribution in half, Artis still pays a respectable 4.44% yield.

Stock Price: After hitting a low of $8.75 after the distribution cut last November, Artis has continued to climb back up.  Although it is nowhere near it’s NAV of $15.72 it opened today at $12.09.  This represents a gain of almost 40% since last November.

1 Year Stock Price Performance of Artis REIT (AX.UN)

Occupancy: Increased occupancy from 92.7% to 93.3%

FFO & AFFO: Increased both FFO & AFFO by 3% and 4.2% respectively from last quarter.

Buy, Sell or Hold?  What to do…

I will continue to hold.  I’ve already weathered the storm, things continue to look good for the future.  I’d also consider adding if this dips below $11.50 again.  I expect Artis to continue buying back shares until while the stock trades at such a discount to the NAV.

There hasn’t been much news on the “exploring other options” front in a while, although I expect they are still exploring options for a possible buyout.   If Artis does get bought out, I would expect the takeout price to be north of $15.50.  In the meantime, I’ll gladly sit back and collect my 4.4% and DRIP a few more shares each month.
Cheers.