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DIVICENTS

June Dividends

DIVIDENDS!

I received $676.99
in dividends in JUNE.

Every quarter there are 3 months or dividend payouts, this is the largest one.

My total dividend haul this year is now $2840.

The thing I enjoy the most about a dividend payment is its permanent, no do-overs. It’s money in the pocket that I can spend however I see fit. It’s my little piece of the pie and it is delicious!

Market Musings

Brexit!

Well, that was a shock. When I woke up in the morning and read the news I almost choked on my coffee. When things like that happen the investing wheels start spinning into high gear. What should I do? Panic sell in fear of a crash? Should I hold on and wait the market out? Nah I went shopping!

Like I said last month, if I see Franklin Resources dip I would pick up some more. I added 75 shares at $32.50 USD. Now I didn’t go crazy because I like to keep a good portion of my portfolio in cash or equivalents so I can really spend in a full out crash. It’s always prudent to keep money in the banana stand. This in my opinion is just a blip though it could have many unknown consequences down the road. Still feeling bearish and I am still dreaming for a large market crash. When you are a net buyer, it’s better to buy on the cheap!

OIL

Still hoping on $60 oil to exit some positions I picked up when it was low $30’s. I’m not a big fan of oil or any commodity that can swing so quickly. That being said, I would still keep one oil stock that has shown to be far and above the other companies in the sector. Suncor TSE:SU. Of all the companies I have followed in the oil business Suncor has shown to be the best in terms of leadership and smart moves during the downturn. READ THIS. CEO Steve William is buying up gems while other companies are getting squeezed out. Suncor looks to exit this downturn in a better position than when it entered, not many other companies can say the same.

Moves in JUNE

Total Purchases $5406

Total Sales $0

I bought 80 shares of TSE:XLB Canadian Long Term Bond ETF for $24.61 per share for a total of $1968. This brings my total share to 80. I plan to add more of this next month unless the market drops. My plan it to buy more shares if the DOW gets as low as 17000. I don’t see Brexit causing this but I hope it does /devious face.

I added 75 shares of BEN Franklin Resources for $32.50 per share for a total of $2437. This brings my total shares to 150. This company has a great balance sheet and has increased its dividend payment every year for over 25 years. Franklin dividends history. This is one of those companies I just plan to forget about. Safe, oversold and has an ever-increasing payout.

I bought 70 shares of TSE:PZA Pizza Pizza Royalty Corp $14.30 per share for a total of $1001. This brings my total share to 220. I had previously bought 150 shares at $13.75 and wanted to bring my total up high enough to buy 1 extra share on a monthly drip. My monthly dividend from this company should now be around $15.

July 8, 2016
May Dividends

Alright,

DIVIDENDS!

I received $456.69 in dividends in May.

Every quarter there are 3 months or dividend payouts, this is the middle one.

My total dividend haul this year is now $2165.

The thing I enjoy the most about a dividend payment is its permanent, no do-overs. It’s money in the pocket that I can spend however I see fit. It’s my little piece of the pie and it is delicious!

Market Musings

The Dow Jones is close to 18000 and the TSX is 14000. I don’t see any reason for the market to be this optimistic with earning doing so poorly. It looks to me like the rally in oil is a large factor behind this and I’m not sure how much more steam this thing has. I continue to look for safety on every level. I still hold several highly speculative investments that I will continue to look to exit as I head toward safety in long term Government bonds, aristocrat stocks, or cash. I will try not to hold on to too much cash as it doesn’t do anything except lose its value over time.

I do believe gold might be a good bet but I HATE buying commodities do to the speculative nature that is inherent with them. (Disclosure) I do own a small amount of physical silver though I treat it more as a toy then an investment.

Oil, what about oil? Oil is getting very close to the $50 mark for WTI. I think it will power on up after people take their profits around $50. I wouldn’t be surprised to see it approach $60 and stay in the 50-60 dollar range for a very long time.

Oil for me is a love hate relationship. I own a fair amount of oil companies that I have been slowly picking up since around Jan 2015. I started buying when WTI was trading at $60 thinking it shouldn’t go too much lower as the breakeven price was around this level. Well I was very wrong. I’m still holding all of these stocks I bought and will be looking to exit many of them now that I have (luckily) recouped most of the loses during the downturn. One thing I did right in hindsight was to make sure the company I was buying could weather a bad market for a long time.

I will look back at this “collapse” as a learning opportunity and remember “don’t try to catch a falling knife”

Moves in May

I sold 0 Shares in anything this month.

I bought 1130 shares of Plaza REIT for $4.85 per share bringing my total share to 2470. You can read the April report on why here.

I bought 75 shares of Franklin Resources for $36.02 a share. This is a new position for me. This company has a great balance sheet and has increased its dividend payment every year for over 25 years. Franklin dividend history. This is one of those companies I just plan to forget about. Safe, oversold and an ever-increasing payout.

I plan to add more shares to Franklin if it continues to get cheaper. I also plan to buy some more Canadian bonds in the form of an ETF.

June 9, 2016
What is a Yield?

Now that we have an understanding of what a dividend is lets look into the yield.

A yield is the dividend per share divided by the current price of the stock expressed as a percentage.

Here’s an example.

Say you own shares of DIVICENTS CORP! and they pay out a yearly dividend of $1 per year. The current price is $10.

1÷10=0.1 or 10%

This would give D.C! a current yield of 10%.

Now, as I mentioned above, a yield is the dividend per share divided by the current price of the stock, what we have to keep in mind is that the price of a stock is almost always in motion. Say that our shares of D.C! had a great year and have moved all the way up from $10 a share up to $20. Although the shares have double D.C! board of directors have decided to keep the dividend payout at a steady $1 per year.

Now lets look at the yield again. $1 divided by $20 current share price is 1÷20=0.05 or 5%. The dividend stayed the same yet the yield was cut in half.

Having a low yield is not necessarily a bad thing, nor having a high yield is necessarily a good thing. Let’s have a look at a couple scenarios.

Let’s pretend D.C! just released a press statement saying that they have won an exclusive contract to supply all the ingredients to make soap to the PAPER STREET SOAP company.

PAPERSTREET SOAP is the biggest and best soap company in the world and D.C.! is going to make a lot of money of this deal. This is a tremendous opportunity and D.C! stock just went through the roof. It’s stock is now trading at $40 per share. It’s still 2 months away from releasing it quarterly financial results so the dividend are staying at $1 until then with no guarantee of them going up. The current yield is $1÷$40=0.025 or 2.5%. Not a great yield but I would still think this is a buying opportunity with a high probability that the EARNINGS PER SHARE or EPS will increase in the next quarterly result and D.C! will increase their dividend payout!

Now scenario 2. Let’s pretend that DIVICENTS CORP! has been supplying PAPER STREET SOAP company with all it soap making material exclusively for the past 2 years. D.C! has increased its dividend every quarter for 2 years and is now paying out a pretty hefty dividend of $3 per share. Out of no where PAPER STREET SOAP company releases a press statement that they are terminating their exclusive deal with D.C! due to the fact that D.C! wasn’t selling them tallow as they had promised but instead had been supplying human fat from a Liposuction clinic! The news wreaks havoc and the shares of D.C. crash all the way down from $40 to $20. It’s still 2 months away from releasing its quarterly financial results and the dividend is still $3 but everyone on the street knows D.C. EPS are going to take a massive hit. The current yield is now sitting at $3÷$20=0.15 or a massive 15%. Although this is seemingly a fantastic yield I would not judge this to be a good buying opportunity until we have some clarity on the earnings. Seeing a 15% yield would definitely send up the red flag and could possibly result in a cut to the dividend.

A company needs to make enough money to payout the dividend!!

To understand if the dividend is in risk we have to learn about a couple more things. Earnings per share or EPS and Payout ratio.

WHAT IS EARNINGS PER SHARE?

WHAT IS A PAYOUT RATIO?

May 1, 2016