Blanton’s single barrel usually arrives in the Manitoba liquor mart twice a year. Typically you can grab a few bottles before it sells out after a week or two. The price is around $70 Canadian, and basically anytime we get a shipment in the province I pick up a few bottles. There is nothing worse than craving a sip of Blanton’s only to realise there is none left in your entire province.
For those unfamiliar with Blanton’s, you may know it by seeing it. The bottle is one of the most iconic bourbon bottles around, and has been used in many movies, tv shows, etc.
Each bottle includes the date the barrel was dumped as well as a bottle topper that has a horse/jockey in a slightly different position, as well as a letter. A lot of people try and collect them all to spell out B-L-A-N-T-O-N-S. This specific bottle was dumped March 05, 2020 and has the bottle topper is the letter “B”.
*Spoiler Alert* This has been one of my favourite bourbons since the day I first tried it. I haven’t yet done a review on it – so here I go….
Date Reviewed: September 17, 2020
Atmosphere: In a special rocks glass I was gifted by a good friend for being in his wedding party. Aside from my Glencairn glasses, this is my go to glass for sipping and cocktails.
Distillery: Blanton Distilling Company; Buffalo Trace/Sazerac Company
Mash: Buffalo Trace Mash Bill #2. This is thought to have a slightly higher rye content – about 15%
Age: No Age Statement – Thought to be around 9 years
Price I Paid: $70 Canadian
Appearance: Medium Amber/Brown.
Nose: From a mile away I can pick out the sweet, soft smell of Blanton’s. It’s one of the few bourbons I can take a big whiff of without any burn in my nostrils. Even with the glass resting on your lap, notes of vanilla, milk chocolate and caramel will make its way up to you. Give it a few swirls, and you may get some cinnamon too. If it didn’t taste so god damn good – I could spend the whole night just smelling the glass – but alas…I must drink it….
Palate: The first sip continues to showcase it’s sweet notes (think an aero chocolate bar – which by the way pares exceptionally well with this bourbon) it is followed by just the right amount of heat. Some spices shine through, maybe nutmeg or cinnamon, and although I’ve never smoked a cigarette in my life I can see how people would say they can taste a tobacco like flavour in this as well.
Finish: The finish is smooth, and has an almost burnt orange peel like finish. There is zero burn, and every sip is better than the last. I find a lot of whiskey will give you that heartburn like feeling the first few sips you have as it goes down – not this one. So smooth.
Conclusions: While not overly complex, that is what I like about it. Every single time I pour a Blanton’s I know what I am going to get. A smooth, tasty bourbon I can enjoy neat or showcase in a cocktail. It’s fancy enough for a special occasion sipper, it also makes a great gift, and luckily where I live it’s also readily available enough for an everyday sipper. It’s both sweet and smooth, but also spicy and has just enough heat for almost anyone to enjoy. While it may not have the punch and complexity of say a Bookers or Stagg Jr, I’d put it right up there next to those on my top shelf. I also highly recommend eating an Aero bar while you sip on this, and let a piece of the bar melt in your mouth between each sip. It is heavenly.
Overall Score: 90/100 (94/100 with an Aero)
Personal Highlights – August 2020
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: $
Canadian Equity Income Distribution: $356.31(dripped 13 shares)
Total Passive Income August 2020: $442.75
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.
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:
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:
So what did I end up buying…
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.
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.
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.
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:
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!
Personal Highlights – July 2020
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
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
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.
It took me months, but I finally got around to opening this bottle. First a little background. This was actually a gift, sent to me by a reader of the site, who happened to know I loved cocktails & bourbon. This bottle is unavailable here where I live, so it was extra special. It just so happens, I later got to know him a bit better, and I am now a reader of his site, and was even a guest on his podcast….what a weird world. If you are interested, you can check out his site HERE
Barchef is one of the top cocktail bars in Toronto, and for this bottling they partnered with Still Waters Distillery who make Stalk & Barrel whisky. I haven’t been to Barchef Toronto yet, but next time I am there I will check it out for sure. I have heard nothing but great things.
First of all, the bottle itself, is really a thing of beauty. It’s just got a real nice, simple, clean look to it. It was also shipped with a small orange aromatic spray (to mimic the orange zest/twist) which smelled absolutely delightful. A friend of mine joked he wanted to take it and use it as a cologne. One of the real nice things about this bottle, is the simplicity. Just pour over ice, give it a spritz or citrus twist, and you have a gourmet cocktail in your glass within seconds.
For the unacquainted, and old fashioned is a very straight forward, spirit heavy cocktail. Typically the ingredients and measurements are as follows:
2 oz Bourbon
1 bar spoon simple syrup
3-4 Dashes of bitters
Classic Old Fashioned’s just happen to be one of my favourite cocktails due to their simplicity, and also the fun in finding the right balance of sweetness and sharpness. If you aren’t a whisk(e)y drinker, or into booze heavy cocktails, a classic old fashioned may not be for you.The good news is, the Barchef Toasted Old Fashioned could be the perfect gateway drink for those wanting to get a bit more into cocktails.
The Barchef Toasted Old Fashioned is NOT your typical/classic Old Fashioned. In fact, after trying it, I was a bit surprised they marketed this as an old fashioned cocktail. First of all, it is very sweet, has a lot of added spices and flavours, and the bottle comes in at just 38.9% alcohol. According to the bottle, instead of simple syrup they use maple syrup (which is especially delicious), along with lots of other spices. As soon as you open the bottle, your nose will be hit with a heavy dose of anise/licorice. Unfortunately for me, much like Cilantro, this is one of the flavours I’ve never been able to get into.
The first sip is very sweet, and then you get hit with the spice. If I am being honest, the anise/licorice was too overpowering for me, and the drink was definitely too sweet for my liking. It almost tasted like a Jagermeister old fashioned with added sugar. I can definitely see the appeal of this drink for anyone who enjoys that Jager/Absinthe flavour, but I just couldn’t get into it as much as I tried. I offered some of the bottle to some friends who were visiting, and they were pretty split on it. Some enjoyed it, while some (like me) couldn’t get past the overpowered flavour and seemingly lack of bite that you’d expect from an “Old Fashioned”.
If there is one thing I’ve learned in my foray into cocktails over the last few years, it’s that everyone has different taste preferences. For example, I absolutely LOVE Campari, and Negoni’s but it is absolutely an acquired taste, typically you either love it or hate it – much like anise. So although I can’t say I’d pick up a bottle of this for myself if I saw it on the shelf, I would still recommend you give it a shot for yourself especially if you enjoy that jager, anise, licorice flavour profile. The simplicity and ease of making yourself a gourmet cocktail by just pouring it over ice, would make this a great drink for camping as well.
I’ve noticed recently there are a lot more options for pre made cocktails, but I’ve yet to find one I’ve really liked. If you have had this one, or some of the other pre made cocktails, let me know what you thought.
Passive Income Update For June 2020.
Diversified Royalty: $22.85(dripped 12 shares)
Canadian Western Bank: $0.29
Artis Reit: $28.35 (dripped 3 shares)
Interrent Reit: $4.29
Plaza Reit: $29.91 (dripped 8 shares)
Intertape Polymer: $55.12
TFSA’s Total: $140.81
Canadian Equity Income Distribution: $353.49(dripped 13.748 shares)
XAW Distribution: $1172.13 (dripped 44 shares)
Total Passive Income June 2020: $1666.43
My portfolio was up slightly to: $343,539.41 This represents a increase of 2.69% from last month. I expect continued volatility in the market (and my portfolio) for the foreseeable future.
My long term plan hasn’t changed. I haven’t sold a single stock, and I continue to look for good deals. I’m sitting on a bit of cash, and I’ve updated my watchlist, which currently contains: Manulife, First National Bank, Alimentation Couche-Tard, Telus, Metro and Canadian Western Bank (among a few others). I haven’t pulled the trigger on any of these yet, because I still think things are going to get worse before they get better.
Passive income in June was $1666.43. June was my second highest month in 2020. So far in the first six months of the year I’ve earned $6225.84 in passive income. The second half of the year unfortunately shouldn’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 $11,405.96.
*The following is a guest post by Dividend Power*
As a dividend growth investor, I love Dividend Champions. These are stocks that have paid a
growing dividend for 25-years or more. Thomson Reuters is a Dividend Champion. The stock is
also one of the Canadian Dividend Aristocrats. Thomson Reuters is a Canadian company that
trades on the Toronto Stock Exchange or ‘TSE’ and also trades on the New York Stock Exchange
or ‘NYSE’. At the right price, the stock is probably a good addition to many dividend growth
portfolios. The market downturn resulting from COVID-19 caused the stock price to drop, but it
has recovered somewhat since then. The current dividend yield is roughly 2.3%, which is higher
than the broader market average. Dividend growth investors may want to research this stock
Thomson Reuters is a media, content, and data company that traces its founding back to 1934 in
Canada and 1851 in London. The company in its current form is the result of a $17.6 billion
merger between Thomson of Canada and Reuters Group of the U.K. in 2008. More recently, in
2018, the company divested its Finance and Risk business forming Refinitv in exchange for $17
billion. Thomson owns a 45% stake of Refinitv and The Blackstone Group (BX) owns the other
55%. In 2019, Thomson Reuters agreed to exchange the 45% stake in Refinitiv that it owns for
a 15% stake in the London Stock Exchange Group subject to regulatory approvals.
Today, Thomson Reuters operates in five business segments: Corporates (22% of revenue),
Legal Professionals (41% of revenue), Tax & Accounting Professionals (14% of revenue), Reuters
News (11% of revenue), and Global Print (12% of revenue). The company will have about $5.9
billion in revenue in 2020 (before COVID-19 impacts). Thomson Reuters is the market leader in
the global legal market segment, and the market leader in corporate legal and tax solutions in
the U.S., and the tax market segment in the U.S.
Note that the company is controlled by the Thomson family of Canada through their investing
vehicle, Woodbridge Company Limited. They control approximately 65% of the company’s
common shares. The family holds the chairman position in Thomson Reuters.
Thomson Reuters is a Dividend Champion and a Canadian Dividend Aristocrat. The company
has paid a growing dividend for 27 consecutive years since 1993. The regular cash dividend has
increased from $0.08 per share in 1993 to $1.52 per share in 2020. This gives a current dividend
yield of approximately 2.3%, which is not bad compared to S&P 500s’ current average dividend
yield of about 2.0%.
Source: TRI Booklet Winter 2020
Thomson’s dividend safety metrics have historically been somewhat volatile due to special
items. They have also worsened recently due to the divestment and subsequent loss of revenue
and lower earnings, and COVID-19.
Looking forward, consensus 2020 earnings per share is $1.77. The forward dividend is $1.52 per
share. This gives a payout ratio of approximately 86%. This value is greater than my target value
of 65% or lower. However, revenue and earnings are likely to be depressed in 2020 due to
COVID-19. Further, Thomson Reuters is adding to revenue through bolt-on acquisitions. This
should improve the payout ratio with time as these acquisitions grow and add to the bottom-
On a free cash flow basis, the dividend is also safe. The company is guiding for roughly $1 billion
in free cash flow. This is down from guidance of $1.2 billion in FCF earlier in the year due to
COVID-19. The dividend costs about $760 million annually ($1.52 x 500 million shares). This
gives a dividend-to-FCF ratio of about 76%. This is an OK value but higher than my target value
of 70%. The long-range target for Thomson Reuters is to pay 50% – 60% of free cash flow as
The dividend is also seemingly safe from the perspective of debt. At end of the most recent
quarter, Thomson Reuters had outstanding debt of $3.8 billion off set by cash on hand and
short-term investments of $1.35 billion. No debt is due until 2023 adding to the good picture from the
perspective of debt.
Overall, the combination of the divestiture, restructuring, and COVID-19 has likely made the
dividend safety metrics somewhat worse the desired. However, Thomson Reuters has
positioned itself in higher growth areas and is forecasting organic growth supplemented by M&A. With that said, I do not expect the dividend to grow at very fast rate over the next couple
of years as the global economy recovers from COVID-19.
Is Thomson Reuters undervalued? The stock is currently trading at a forward earnings multiple
of about 38.5X. This is higher than the average of the S&P 500, which is trading at 21.9 as of this
writing. So, no Thomson Reuters is not undervalued at the moment. However, some of this
elevated valuation is due to lower consensus forward earnings per share due to COVID-19. The
high earnings multiple is also due to limited float that is also contributing to overvaluation.
Recall that the Thomson family controls about 65% of the common shares. So, there is limited
amount of stock that trades on a daily basis for a company of its size.
Thomson Reuters’ stock price dropped to near $52 per share at the depths of the downturn
caused by COVID-19, which was probably a good entry point. The stock is arguably an under the
radar dividend growth stock. I expect that the dividend will continue to grow in the future but
at a slower rate. The company has seemingly prioritized share repurchases and M&A at the
moment. With that said, dividend growth investors may want to research this stock further
and keep an eye on it for a better entry point.
Biography: Dividend Power is self-taught dividend growth investor. He is the founder and
author of the Dividend Power investment blog. He writes about dividend growth stocks for the
long-term small investor seeking to invest in dividend stocks for income and growth. His focus is
on undervalued stocks with sustainable dividend growth and capital appreciation potential. His
work has appeared on Seeking Alpha, Sure Dividend, ValueWalk, The MoneyShow, and other
It’s been a while since I’ve updated my watchlist. I haven’t made a stock purchase in a few months. In fact my last stock purchase was back in early March, right when Covid 19 was just starting to really hit North America. If you recall, I had added to my positions in XAW, GoEasy Financial, Chorus Aviation (ouch), Diversified Royalty and finally initiated a new position in New Flyer. I am still happy holding all of these companies long term and the only one that has taken a huge hit was Chorus Aviation.
I’ve increase my bi weekly contributions into my TFSA and although I haven’t purchased anything yet, I’ve had my eye on a few different companies. First a bit of background, so you can better understand my reasons for choosing the stocks below…
1) My RRSP holds mostly just 2 funds. One is XAW(which is about 40% of my total portfolio) and takes care of my USA/Global diversification and the other is an RBC Canadian Equity Income fund(About 25% of my total portfolio).
2) I use my TFSA specifically to hold Canadian Dividend Paying Stocks, so this watchlist will only include Canadian Stocks that pay a dividend.
3) Since about 25% of my portfolio is the RBC Canadian Dividend fund, I TRY to avoid holding the same stocks in my TFSA/RRSP. There are some exceptions (Algonquin Power, New Flyer, etc).
4) My updated watchlist will consist of Canadian Dividend paying stocks, and which meet my custom stock screening criteria. Some metrics I use in my custom stock screen are: Conservative Payout Ratio, Reasonable Price/Earnings, Earnings Growth & Expected Earnings Growth and Debt Levels.
Metro & Loblaw
Looking at these two stocks, I don’t believe you can go wrong with either. I would actually like to add them both, however right now I am leaning towards Metro. The only areas where Loblaw comes out on top is:
a) I am extremely familiar with it, I shop there multiple times a month.
b) Current dividend yield is slightly higher, slightly less volatility.
That said, the numbers speak for themselves, and I believe the first one I pick up will be Metro. See for yourself…
Metro looks like the clear winner here. They are trading at a better multiple, they have a much more conservative payout ratio (more room to grow the dividend), and the past 5 years show they are doing just that.
My target price for these stocks are:
The big banks are all well covered in my RBC Canadian Equity fund, so I will not talk about them here (although I will see, they pretty much all look like great pick ups right about now). I ALMOST grabbed some Bank of Nova Scotia last week when it was trading at 9x earnings. It is still trading under 10x earnings and yielding 6.13%!
I’ve been watching First National & Canadian Western Bank for years. In fact I owned CWB for a while, bought it at $19, sold it around $30. It is a stock that continually has good metrics, but also has crazy volatility usually tied to the Alberta market and oil prices. That said they have diversified away from being a “western” bank and continue to expand. If you don’t like volatility, it’s probably not for you, but it’s got a great history of increasing dividends, a low payout ratio and because of it’s volatility you can periodically scoop it up at a great price.
First National is actually the company I have my mortgage with, and they aren’t your typical financial institution. They work closely with mortgage brokers, and leverage technology better than most of the big banks. I’m a big fan of their online mortgage platform, however the current interest rates, coupled with the increasing amount of Canadian Household Debt may hurt them. First National pays a nice monthly dividend, and insiders own over 10%, which is usually a sign that management has confidence in the business.
Let’s see what the numbers say. I included Bank Of Nova Scotia here as well for reference:
As you can see, all 3 are trading at very reasonable levels, with the edge going to Canadian Western Bank. The dividend yields are all pretty strong as well. The conservative payout ratio as well as the 5 year dividend growth rate also put Canadian Western Bank on top.
Bank of Nova Scotia is the easy set it and forget it pick. It has solid, but not spectacular numbers all around, and you know it will keep doing its thing.
First National has a few risks attached with it, if interest rates stay this low, they will get hurt more than other big banks, and the payout ratio of 78.6% is way too high for my liking (especially in this sector). I own some reits with better payout ratios!
Canadian Western Bank looks like the winner for me here. That said, I still don’t like it enough at it’s current price to pull the trigger. I’ve seen it dip below $20 many times over the last few years, and I expect it (along with most other stocks) will see another huge drop as Covid continues to wreak havoc on us. I love the dividend growth history, low payout ratio and their commitment to diversifying outside of Alberta, and also more into wealth management.
Long term, I don’t think you can go wrong with any of these, and here are my target prices:
BNS: $60 or less. Honestly it’s a good price now. It could drop again, but if you are in it for the long haul, getting this for 9-10x Earnings is a go for me
CWB: $19.99 or lower. Although I would never recommend swing trading – if you had to choose a stock to do it – this may be the one. This one continually goes from $20-$35. I like it for its dividend growth and low payout ratio. I’d be comfortable buying and holding for 5-10 years if I can scoop some up at $20 or less.
First National: $22.50. If I am being honest it’s probably a good price at $25-27 as well, but due to some of the risk, I’d only grab this one if it really falls quite heavily again.
2 Other stocks I want, but am waiting for price to drop …Alimentation Couche Tard & DOLLARAMA
It’s getting late, so I won’t go into these ones too much right now (i’ll probably do a solo write up on each). I am currently waiting for these two to drop to initiate a position.
I actually owned ATD.B previously, but sold it a couple years back, and although I made a nice chunk on that trade, I wish I held on to it. Dollarama is one that I’ve never owned but have wanted to for a while. These two stocks have a lot of similar metrics, both have extremely low yields, but both are growing them at exponential rates. They both have super conservative payout ratios, and have both seen their earnings and profits rise at “growth stock rates” for the last few years. That said, Dollarama has seen a pretty big drop in the rate of it’s growth the last 2 years while ATD has continued to impress. These are another two great stocks for the long haul, which I hope to add both by the end of this year. My target prices are:
Do you own any of these stocks? Would you consider buying any? Let me know your thoughts.
Passive Income Update For May 2020.
Diversified Royalty: $22.62(dripped 13 shares)
Artis Reit: $28.22 (dripped 3 shares)
Power Corp: $98.90 (dripped 4 shares)
Interrent Reit: $4.29
Plaza Reit: $29.68 (dripped 10 shares)
TFSA’s Total: $183.73
Canadian Equity Income Distribution: $352(dripped 13.845 shares)
Total Passive Income May 2020: $535.73
My portfolio was up slightly to: $334,531.46 This represents a increase of 1.62% from last month. I expect continued volatility in the market (and my portfolio) for the foreseeable future.
My long term plan hasn’t changed. I haven’t sold a single stock, and I continue to look for good deals. I’ve updated my watchlist, I am currently keeping an eye on: Manulife, First National Bank, Alimentation Couche Tard, Metro and Canadian Western Bank (among a few others).
Passive income in May was $535.73. This is one of my slowest months, but luckily it should be followed by one of my largest. Next month XAW pays one of it’s semi annual distributions. With everything that has gone on in the market, I am not too sure how much to expect from XAW but it should be a much needed boost.
Assuming no dividend cuts or increases, my current Forward 12 month dividend income is $11,340.46.
*** The following is a guest post (Our first official guest post to be exact) from our good friends at Sure Dividend ***
At Sure Dividend, we don’t use the term blue-chip loosely. While the term blue-chip gets thrown around a lot in the financial media, we have a specific definition of what constitutes a blue-chip stock. Blue-chips, in our view, are stocks that have at least 10+ consecutive years of annual dividend increases. There are three specific groups of stocks that fall into the category of blue-chip stocks: the Dividend Achievers (10+ consecutive years); the Dividend Aristocrats (25+ consecutive years); and the Dividend Kings (50+ consecutive years).
We believe blue-chip stocks are those that have maintained long histories of raising their dividends each year. A long track record of consistent annual dividend growth indicates a company with strong brands, durable competitive advantages, and a proven history of generating growth over the long run.
Canadian Natural Resources (CNQ) qualifies as a blue-chip dividend stock for Sure Dividend, as the company has now increased its dividend for 20 consecutive years. We also consider the stock to be undervalued, given the recent and significant decline in the share price. With a high current yield above 8%, Canadian Natural Resources is a blue-chip dividend stock.
Canadian Natural Resources is an energy company that operates in the acquisition, exploration, development, production, marketing, and sale of crude oil, natural gas liquids (NGLs), and natural gas. Geographic areas of production focus include Western Canada, the North Sea, and offshore Africa. The company is headquartered in Calgary, Alberta, and the common stock is cross listed on the Toronto Stock Exchange and the New York Stock Exchange, where it trades with a market capitalization of approximately US$17 billion.
The company has high-quality assets that will fuel its growth for many years. It has a massive asset base of long-life, low-decline assets which hold 27.8 years of proved reserves, and 36.0 years of reserve life based on proved-plus-probable reserves. Canadian Natural’s Oil Sands Mining and Upgrading assets have a reserve life of more than 43 years.
As a large exploration and production company, Canadian Natural Resources’ revenue and cash flow are dependent in part on the underlying commodity price. Reduced prices of oil and gas due to the negative demand shock posed by the coronavirus has put a dent in the oil and gas majors. Fortunately, Canadian Natural Resources has continued to perform well in recent periods.
In early March, Canadian Natural Resources reported financial results for the fourth quarter of fiscal 2019. In the year, average production grew 2%. In addition, the company reduced its operating costs by -10%, to $11.50 per barrel, and thus grew its adjusted earnings-per-share by 17%, from $2.06 to $2.40. Moreover, the company grew its adjusted funds flow by 13%, to an all-time high of $10.3 billion, and delivered record free cash flows of $4.6 billion.
Such a strong level of free cash flow permitted the company to return lots of cash to shareholders last year. Shareholder returns totaled $2.7 billion for 2019, including a 12% increase in the company’s quarterly dividend and over $940 million in share repurchases.
Canadian Natural Resources grew its reserves by 11% in 2019, to 10.99 billion barrels, and thus enhanced its reserve life index to 27.8 years. As this figure is more than twice as much as the average life of reserves of its peers (~11 years), it is impressive and certainly bodes well for the future growth prospects of the company.
In early 2020, Canadian Natural Resources declared a new quarterly dividend at a rate of $0.425 per share, for an annualized rate of $1.70 per share (US$1.21). This represented a 13% raise from the previous quarterly payout, meaning 2020 is the 20th consecutive year of a dividend increase for Canadian Natural Resources. This is an impressive history of increasing dividends, as it includes the global financial crisis and recession of 2008-2009, as well as the coronavirus pandemic.
Canadian Natural Resources is a high dividend stock, and is an attractive stock for income investors. Based on its recent share price, the stock has a high dividend yield of 8.6%. Compare this with the S&P 500 Index, which has an average dividend yield just above 2% right now. The combination of rising stock markets over much of the past decade, as well as falling interest rates, means it is more difficult to find suitable levels of investment income considering the lack of available alternatives.
The company has decent balance sheet strength as well, with an investment-grade credit rating of BBB from Standard & Poor’s. Canadian Natural Resources recently notified investors of recent developments surrounding the coronavirus crisis, and measures taken to protect the company’s financial position in an effort to secure the dividend. In 2019, Canadian Natural retired approximately $2.35 billion of bonds and term facilities, proving to be a wise decision as the global economy faces a potential recession in 2020.
Canadian Natural Resources has taken a number of steps to shore up its finances more recently, including suspending buybacks and cutting operating costs. Management is also confident regarding the liquidity position of the company. Current liquidity is approximately $5 billion consisting of cash, including approximately $1 billion in estimated cash reserves as at March 31st . Lastly, it is lowering its 2020 capital expenditure budget from $4.05 billion to $2.96 billion, a 27% reduction. In the company’s
view, its financial resources are more than sufficient to retire any current debt obligations when due.
The coronavirus crisis has weighed on the stock market over the past several weeks, particularly in the hardest-hit sectors such as energy. But this could simply be a good buying opportunity for long-term investors. There are many high-quality stocks that have seen their dividend yields rise dramatically as a result of their plunging share prices. And, valuations appear compressed across the energy sector.
Still, investors need to choose stocks selectively, to focus on high-quality businesses with sustainable dividends. Canadian Natural Resources has a strong business model and a long history of increasing its dividend each year. With a high dividend yield above 8%, Canadian Natural Resources is a blue-chip dividend stock.
** Just a reminder, this was a guest post from our friends at Sure Dividend. **
Always do your own stock research.
Passive Income Update For April 2020.
Diversified Royalty: $26.00(dripped 18 shares)
Artis Reit: $28.08 (dripped 3 shares)
Algonquin Power: $185.31 (dripped 10 shares)
Interrent Reit: $4.29
Plaza Reit: $29.44 (dripped 10 shares)
Chorus Aviation: $36.76(dripped 12 shares)
TFSA’s Total: $309.88
Canadian Equity Income Distribution: $351(dripped 13 shares)
Transcontinental: $192.83 (dripped 16 shares)
New Flyer: $57.16(dripped 4 shares)
Go Easy: $123.75
Total Passive Income April 2020: $1034.62
My portfolio jumped back up to: $329,207.77. This represents a increase of 14.78% from last month. This market is crazy. Over the last 3 months, my portfolio has gone:
– 5.41%, -19.73%, +14.78%
My long term plan hasn’t changed. I haven’t sold a single stock, and I continue to look for good deals. I’ve updated my watchlist, I am currently keeping an eye on: Manulife, First National Bank, Alimentation Couche Tard, Metro and Canadian Western Bank (among a few others).
Passive income in April was $1034.62. This was the second time in the first 4 months of 2020 my income was over a thousand! I only achieved $1000+ twice in all of 2019!
The Black Manhattan is one of my new favourite drinks. If you are a cocktail person, you are most likely familiar with a classic Manhattan. If you are not a cocktail person a classic Manhattan is Rye, Sweet Vermouth & Bitters. It’s a very boozy drink, but absolutely delicious. I love a classic Manhattan, but I have to say, lately I’ve definitely been preferring a Black Manhattan.
So what’s the difference between a regular classic Manhattan & the Black Manhattan?
As you can see, the only difference is swapping the vermouth for Averna. As far as ingredients go, these drinks are VERY similar. That said, don’t let it fool you, the flavour profile is completely different. Aside from the dark complexion, the Averna gives the drink a more herbal/medicinal feel – but in a good way. I like to make mine with a hint of sweetness ( I add a spoonful of Maraschino syrup).
2 oz Rye Whiskey (You can substitute with Bourbon but traditionally a Rye).
1 oz Averna Amaro
2-3 Dashes Angostura Bitters
1 barspoon Luxardo Cherry Maraschino Syrup
*Garnish with 3 Luxardo Cherries.
Add all ingredients into a mixing glass with ice. Stir for 20 seconds. Strain into coupe glass. Garnish with 3 cherries. Enjoy.
This drink will go down fast and smooth. Don’t let that fool you. It is a boozy one. Take your time, enjoy it. That said, if it goes down too fast – no worries, make yourself another one…after all it’s only a few ingredients!
Okay, seriously. If you ACTUALLY clicked this headline – this is for you.
Stop chasing penny stocks.
Stop chasing unsustainable high yields.
If you think you will find your next great stock on a blog, facebook group, reddit thread or from a friends “hot tip” – you probably shouldn’t be buying individual stocks. I cannot count the number of people I’ve had message me over the last couple of weeks asking about penny stocks, oil stocks, etc. People who have never invested a penny in their lifetime, messaging me telling me they are going to easily double their money in the next few months….
Are there some penny stocks that will double this year? Of course. Do I (or anybody else) know which ones? Of course not. If we did, we’d be billionaires. The amount of people searching for “good penny stocks” or “best monthly paying stocks” or “dividend stocks yielding over 10%” is astounding…and it’s dangerous.
We’ve all been there, starting out trying to figure out what stocks to buy, how to make a quick buck. Almost every experienced investor will tell you they got got burned early on, either chasing yield, listening to a hot tip or speculating/gambling.
Almost everyone agrees getting a dividend payment from their stock is great. It feels good, you can reinvest that money or use the cash – so why wouldn’t you want to find stocks that pay out the biggest dividends? The answer is simple:
Sustainability & Future Dividend Growth
Owning shares in a company that pay a dividend feels great. You know what feels even better though? Having confidence that the dividend will not only be around for years to come, but that it will continue to increase. What good is a 10% dividend yield if it gets cut next month – or if the stock price declines 15%?
Here are some metrics that can help give you confidence in the sustainability of a dividend:
Payout Ratio: This one is pretty straightforward. What percent of earnings is the company paying out to its shareholders as dividends. For an extremely simplistic example, assume company ABC makes $100 this year, and pays an annual dividend of $50. The company would have a payout ratio of 50%. Look for companies that have a conservative payout ratio. Payout ratios will vary between industries, but typically you want to find a company that is paying out less than 40-50% of annual earnings. The big exception here would be REITS – but that is a discussion for another day.
Earnings History & Projections
Another important metric to focus on is earnings per share. Are earnings increasing? A super conservative payout ratio is great, but if earnings are falling each year, that payout ratio, by default will start to increase. If a company is not able to increase its earnings, eventually the dividend is going to get cut. Look for companies that have a history of growing their earnings per share, in good times and bad.
Strong Balance Sheet
Always look at the financial statements for a company before pressing the “buy” button. A lot of metrics could look great, but if a company is over leveraged, it means they could be at risk in the future. Always ensure a company has no problem meeting its debt obligations. If they can’t this means they may need to raise equity (issue more shares/dilute your stake in the company), cut back on costs (cut dividends), or worst case face a possible bankruptcy.
Dividend Growth History
Lastly, look for companies that have a history of increasing their dividend each year. This typically shows they have confidence in the business, and they like to reward shareholders. It is important to do your own research, and just because a company has increased their dividend for 10+ years in a row, doesn’t mean it can’t or won’t get cut in the future. That said, if a company has strong and growing earnings, increasing revenue, a strong balance sheet and a history of paying a growing dividend, you are probably on the right track.
Finally, since you may have been lured here with the click baity headline, and the hopes of finding 3 great stocks to buy, out of pure guilt I will post 3 Canadian stocks below I believe meet the following criteria:
3 Canadian stocks to consider:
As always, do your own due diligence. Happy Hunting.