Friday, 18 December 2015

Next Buy Watchlist: December 2015

With my last Watchlist in September I focused on consistent, steadily growing quarterly dividend payers within the financial sector. The big Canadian banks and insurance companies. Which of those companies, I bought my first shares in Manulife Financial, read about it here in my Recent Buy post.

    Recently, with my last purchase of Dream Office REIT I went for high yield, monthly income. This time around though I am so far still contemplating on what I want to buy next. While I am hunting for income and yield, I do also want to plan for the future with dividend growth stocks.

    In particular, I am looking to build singular positions to a size where dividends are able to DRIP a stock per payout, as well as try to diversify investments within my TFSA portfolio. Currently, I want to have my portfolio heavier on REIT's since within the Tax Free Savings Account their high income through distribution is not taxed, so for the most part I think I am about where I want to be on REITs. Making it the ideal account for Canadians to hold REIT's in, read my overview on the TFSA for more.

     So, with those thoughts in mind, these are the companies that I am considering:

Pembina Pipeline (PPL)

    A energy and transportation company with a market cap of $11.4 billion. PPL has taken a beating this year as low oil and gas prices continue to impact its business. With a year to date drop in share price of 29.3%, or -$12.46. This stock is currently yielding 6.12% with its monthly distribution.

   In recent news for PPL, they posted strong Q3 profits and continue to invest in steady business growth, as well as having several revenue generating projects coming online within the next year which will boost revenue further.


    RioCan, like a lot of REITs have seen their share prices suffer due to uncertain interest rates, with the general expectations of rising rates occurring in the near future. Along with increased vacancies and worries over additional tenants in the energy sector ending their leases. In particular, the abrupt closing of Target hurt RioCan as it held several locations. Forcing the company to try and re-lease the properties and/or re-purpose them.

   Even through all that though, RioCan managed to report an increase in funds from operations by 5%. And they still have room to increase revenues when all the former Target locations get filled again.

Manulife Financial (MFC)

    I have had MFC on my watchlist for a long time, and in October I initiated my first position in this large, and increasingly global insurance company. At the time I bought the shares at $20.38, and I generally consider the stock when its around or under the $21 mark. Once again, MFC is trading below $21, at the time of writing it is at $20.50 and so is once again on my radar to build up my position in the company. With a current dividend yield of 3.31%.

Of the Big Six: TD, RY & BNS

    I am also as always open to adding to my three major bank positions. TD and RBC are both trading at roughly my average cost basis for the stocks, with RBC trading slightly lower, and TD slightly higher. As well as BNS which has been having a rougher year, trading 11% lower than my cost basis on the stock, even so it is my largest bank holding. Although a big Canadian bank with a near 5% yield is very tempting.

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