Saturday, February 28, 2009
I own shares of General Electric in my RRSP. This move will reduce the amount of dividends that I receive in 2009 by $90, and by double that amount for the following years.
Hopefully, within a few years things will stabilize and GE will be able to increase its dividend again.
I don't plan on selling my shares. I still believe that GE will thrive in the future. In fact, I am considering buying some more at some point in the future. At the current price of $8.50 a share, an annual dividend of $0.40 still represents a yield of almost 5%.
Friday, February 20, 2009
Pengrowth had already announced a first cut (from $0.225 to $0.17) in December, so overall Pengrowth has cut distributions by 56%. Considering that in less than a year the price of oil has fallen by more than 50% (not even considering its peak last July), this doesn't come as a surprise. I would be much more worried if Pengrowth had kept paying such a high distribution, and obviously the market was already pricing in a cut, as the yield was around 22% recently. Oil and gas trusts must follow the price of the resource they extract, it's as simple as that.
Although this will somewhat impact my dividend income for 2009 (by a bit over $9), this may prove to be a good time to add to my holdings of the trust. This morning the price of the units has fallen to around $8.70 -- which translates to a distribution yield of 13%. I wouldn't be surprised to see the price fall further. Making small periodic purchases of units through the Optional Trust Unit Purchase Plan will allow me to take advantage of the lows, while diminishing timing risk. Pengrowth offers a 5% discount to units purchased through the plan.
Wednesday, February 11, 2009
This is a small increase, just 2%, but shows that the company is confident of the future. After all, it recently reported comparable 2008 earnings of $5.17, a 3.8% increase. Actual earnings (including the special items) were quite a bit lower at $4.89 (a 13% decline), so it's a mixed picture.
That still leaves the payout ratio at an healthy 40%, so the company can easily afford to continue paying the dividends.
Since my position in 3M is quite small, that increase will have almost no impact to my dividend income (about $0.17), but it still shows that the company is solid.
Thursday, February 5, 2009
This is caused by quite a bit of cash going out to yearly expenses -- car registration, filling the oil tank of the house, paying for the windows. These were planned for, and I had the cash available to pay for those. It still impacted my net worth.
The stock market also went down again in January, so my RRSP accounts suffered again. My non-registered accounts increased, in part because the companies there held up fairly well, but also because I keep adding money there.
Assets ($134 669, down 1.3% from $136 390)
- Bank Accounts $3 990 (down 17% from $4 785)
- Emergency Funds $3 383 (up 0.1% from $3 378)
- RRSP Accounts $30 033 (down 5.7% from $31 861)
- Non-Registered Investments $11 058 (up 6% from $10 400)
- Home $86 100 (stable)
Liabilities ($66 228, up 0.5% $65 873)
- Credit Cards $4 601 (up 13% from $4 086)
- Mortgage $55 110 (down 0.2% from $55 230)
- Heat Pump Loan $6 439 (down 0.7% from $6 492)
- Line of Credit $0 (stable)
I have some more big expenses coming in for February, with the first payment of the municipal taxes for the house. My plan is to watch my spending to cut things back a little. I will also have some overtime that should be paid to me soon, although this may slip to early March.
So, nothing to worry about, but I'll have to be more careful with unecessary spendings.
Tuesday, February 3, 2009
To me, it means an increase of approximately $1.35 in dividend income for 2009, and $1.75 for every future year. These may look like a small amounts, but this will be paid out every year, and coumpounded by reinvestment of the dividends. Best of all, I had to do absolutely nothing to get this small pay raise.
On top of that, a 6% increase easily beats inflation, which was 1.16% in 2008 according to the Bank of Canada.