Friday, 17 April 2015

Recent Buy: Last Buys of March

    Before and after I went away on vacation I deployed a fair sum of capital that become available to me. Having already posted my recent buys that month of AQN and RY, there is still the additional shares of Bank of Nova Scotia (BNS), BCE inc (BCE) and Pizza Pizza (PZA) to my portfolio that month. It was a very busy month of portfolio building, which is reflected quite clearly in my last Portfolio Update, with a 103% increase in value!
    Leading up to these buys required quite a bit of time going over each companies available financial information, news releases and comparing the cost and benefits of each relative to each other. As well as comparing the portfolio weighting of each of the companies that were on my watchlist, as well as the impact of adding different amounts of each would have on my overall sector weightings as well.
    In the end I settled on adding to my current positions instead of adding any new companies. Although I very nearly initiated a position in Manulife Financial(MFC), a company I have been keeping an eye on for quite some time, but decided not to as its priced went up out of my decided buy range.

Bank of Nova Scotia

    So instead I purchased 40 shares of BNS at $62.7 on March 17th, which brought my average cost basis down to $63.08. The nice thing about post so late is getting to reflect on how the stock has done since. Fortunately in this case it looks like I did quite well, with BNS now trading at $65.73. The stock still has a relatively low Price to Earnings ratio of 11.55, and a dividend yield of 4.14%, with a quarterly payout of $.68. Which increases my annual dividends by $108.80! I also had 6 shares of BNS prior to this purchase, so I now have a total of 46 which I am sure I will be very happy to hold for a long, long time as the bank increases its dividends year after year like it has for decades.

Pizza Pizza Royalty Corp.

    On the 30th I added 80 additional shares @$14.50 to my prior holding of 60 PZA shares. My new average cost basis went up to $14.07, and unlike BNS which saw the stock go up PZA is now trading at $14.08. So unfortunately I guess I could have gotten a better 'deal' but you never know. The upside here is that the shares have a dividend yield of 5.68%, and pays out $.06 per share every month! Meaning with these 80 new shares my brokerage account will be seeing another $4.8 added to it every month, for a total additional annual dividend income of $57.6.

BCE Inc.

    My last big purchase of the month was 39 shares in BCE, which operates primarily under the Bell Canada name. I picked up the shares on the 31st for $53.76, and they are now trading with a slight upside at $53.98, so not a huge deal but certainly nice to see. To me however the better part is that BCE has been a consistent dividend growth stock with an already high dividend yield of 4.82%, paying out $.065 per share every quarter. So I will be very happy to see an additional $25.35 from them each quarter that they pay, that amount covers my cell phone bill! Over the course of a year that totals $101.40 in additional income for me, covering a third of my cellphone bills! Combined with my previous 21 shares, BCE is in a way paying for almost half of my cell phone bills just because I hold some of their shares. And I am helping in a small way to support those payments by continuing to use them as my provider, and perhaps not so subtly trying to get people I know to switch to them :)

    Together these three additional buys represented quite a bit of the money I had to invest. I feel quite good about all three of the buys, even with PZA's recent price decline I have little worries about them as they continue to add additional franchises to their royalty pool. Combined they represent an increase of $267.8 to my annual dividend income, which works out to 75cent a day! Which certainly gives me a the feeling of inching just that much closer to having to worry less about having to make money, or have to work at all(the dream)!


  1. I'm still liking the Canadian banks a lot. I just added a little more to my BNS holdings in April while buying TD and RY in months past. Thanks for sharing.

    1. Yeah there's a lot to like about them. And for US citizens such as yourself the stronger US dollar puts them at a discount, and if CAD starts to strengthen the relative dividend yield for you will only get better! Im eager for the next round of dividend raises!

      Good Hunting!

  2. Hey DW,

    I totally dig your BNS purchase. Im considering adding some more, either that or a telco.... Leaning towards telco. for this coming month. I'm just curious as to why you chose BCE over T or RCI.B? Their payout ratio is over 90% and they receive the most customer complaints out of the three, not to mention cable & media profits I believe are at risk.


    1. And I certainly dig the consistency of the big banks dividends!
      When I was initially setting up my portfolio I looked into BCE, RCI, T and SJR. At the time I felt T was a little overpriced, as well as RCI ~$45, there was also its NHL/Leafs deal going on and I felt they would most likely heavily overpay on that deal. SJR was very tempting with its nice monthly paying dividend, but I felt since it was mainly based in Western Canada I might have well as gone with Telus since it also operates(very well) in that area. BCE on the other hand, to put it simply OWNs a lot of the infrastructure in Canada, which lets them sell extra bandwidth to smaller competitors. It also has a great history of paying and raising dividends. Looking back I am very happy with this particular decision, T/SJR are at about the same price as a year ago, RCI is lower, and BCE has gone up 8% Woot! The complaints part is an issue, but from what I'v heard from talking with people, Rogers is worse ;) In the future though, I will probably diversify my Telco holdings with another Canadian carrier, as well as an American one as well.

      Thanks for commenting again!