Sunday, 19 October 2014

Recent Buy! October 2014

    In the past few weeks the markets been dropping quite a bit, with an overall drop of 11.4% of the S&P/TSX Composite, which certainly hurt a lot of peoples portfolio values but also brought about many tempting opportunities.This week I decided to go with adding to my position in Alqonquin Power and Utilities (AQN). I'v been watching it from the sidelines in a portfolio simulator for about 3 years now and bought my first position in them in December when I first started my portfolio. Since then its gone up 22%, for the past month or so its been trading quite a bit lower than where its price had stabilized at around $9, so I decided to add to the position with 81 new shares at $8.59.

    This purchase takes my total shares of AQN to 170 with an average cost basis of $7.71. Based off the dividends I just got this month from my prior 89 shares which paid out $.0977 each, this adds $31.67 to my yearly dividend income, or $7.92 per quarter. AQN current dividend yield is still a very nice 4.52%. With the combined shares paying out ~$16.62 per quarter I now have enough to start a dividend re-investment plan(DRIP) whereby dividend income will be converted into new shares. So I may start that up in time for the next one, where I would probably only get one share and the rest in cash.

    I particularly like this company for the long run as they are steadily increasing their business. In the past few months they have added to their renewable energy and utility holdings through the accusation of a 200MW construction stage wind farm in Minnesota which has a 20year agreement to its power generation. They've finished signing a deal for a take over of a company which holds three water utility plants in Southern California which are expected bring in a steady stream of revenue.

    Other Considerations: During the same time I was also looking at a few other companies on my watchlist and also on my previous watchlist. I nearly bought shares of Manulife Financial as they were trading at around $19.30 which looked very attractively priced to me. I also come very close to buying more of Suncor (SU) even though I had mentioned I wanted to avoid oil based energy companies, its price of $35-36 was very tempting on Wednesday but I was holding out on buying anything till about $40 in dividends settled in my account on Thursday, unfortunately by then the stocks went up 3% and I went with AQN.

    Any stocks in particular that've picked up on the 'cheap'? Or any that you are thinking of?


  1. Thanks for sharing! I haven't looked into these stocks, as I'm still building core holdings as a new investor. But, I love reading about new stocks, so thanks for providing some insight. Best of luck with the buy!

  2. Happy to share :) That's the nice thing about looking through lots of blogs, you get to see what other people invest in and their thoughts and methods for doing so. From what I saw, I'm not too far ahead of you and already the monthly div income is feeling nice, so keep it up! Also, I am totally jealous of your account that lets u buy and DRIP fractional shares! Wish I had that.
    Thanks for dropping by!

  3. Thanks for sharing your recent buy with us. While I have heard of AQN before I never really looked into it seriously. I know Canada has many fine dividend payers to choose from and that this utility is a stable dividend payer. As far as Canada and my portfolio is concerned I am with TD, BNS and RY with an eye towards CM and BMO.

  4. @DivHut, thanks for stopping by again :) Yeah, I think AQN is one of those smaller companies that is a bit off the radar so to speak due to its smaller capitalization. I'v been following it for some time now(aprox 3years) on Investopedia's simulator and its been doing well. I like that they've been acquiring new assets over time to grow their income while keeping debt down. Also helps that they've raised there dividend in the last few months as well :) Also the low share price will make it easy to DRIP to get more shares as time goes on :) And I am definitely still looking to add more to TD, BNS and RY as well.