I just purchased some shares of Procter & Gamble (NYSE: PG) in my RRSP, at $52.50 per share. The company currently pays out dividends of $1.76 per year, for a yield of 3.35% on my purchase price.
Procter & Gamble has products in every house -- it certainly is quite present in ours! The company owns some of the best-known brands in North America, such as Tide, Gillette, Olay, Crest, Oral-B, Duracell, Always and Pampers.
I have been keeping an eye on the company for some time now, and it seemed like a good time to initiate a position. The stock currently trades at a P/E ratio of 14 (it is usually around 20) and the company has recently announced a 10% increase to the quarterly dividend (from $0.40 to $0.44). Over the last 10 years, the dividend growth has averaged 11% per year, so I think we can expect more increases in the future.
This is a company that I plan on keeping for a very long time, adding more money as time goes by.
Tuesday, June 9, 2009
Monday, June 1, 2009
Net Worth Update
As of June 1st, my net worth was $78 372 (up 3% from $76 057). If I exclude house-related assets and liabilities, my net worth is $51 352 (up 4.7% from $49 057).
The market recovery continues, and that accounts for most of the rise in my net worth. I am far from convinced that the current rise will prove to be solid -- I expect the summer to bring another fall (no pun intended). In fact, I hope it does, for times of pessimism are great for investors looking for quality companies selling at a discount.
The rise of the Canadian dollar has also been fast and pronounced. It rose 10% in the month of May alone. I've started buying some U.S. dollars in April to feed my U.S. DRiPs, and I will continue now that the terms are more interesting. Some economists are expecting parity again by the end of the year. My guess is that as long as the current wave of optimism continues, the U.S. dollar will continue to fall. However, it should have a revival if (or rather when) another wave of pessisism hits the markets. We shall see.
Assets ($142 605, up 1.7% from $140 259)
The market recovery continues, and that accounts for most of the rise in my net worth. I am far from convinced that the current rise will prove to be solid -- I expect the summer to bring another fall (no pun intended). In fact, I hope it does, for times of pessimism are great for investors looking for quality companies selling at a discount.
The rise of the Canadian dollar has also been fast and pronounced. It rose 10% in the month of May alone. I've started buying some U.S. dollars in April to feed my U.S. DRiPs, and I will continue now that the terms are more interesting. Some economists are expecting parity again by the end of the year. My guess is that as long as the current wave of optimism continues, the U.S. dollar will continue to fall. However, it should have a revival if (or rather when) another wave of pessisism hits the markets. We shall see.
Assets ($142 605, up 1.7% from $140 259)
- Bank Accounts $3 227 (down 20% from $4 038)
- Emergency Funds $2 595 (down 14% from $3 007)
- RRSP Accounts $35 051 (up 7% from $32 751)
- Non-Registered Investments $13 550 (up 10% from $12 290)
- Home $88 050 (stable)
Liabilities ($64 233, up slightly from $64 202)
- Credit Cards $3 051 (up 0.6% from $3 034)
- Mortgage $61 050 (down 0.2% from $61 172 -- revised number)
- Line of Credit $0 (stable)
Ratios
- Debt / assets: 0.45
- House value / total assets: 0.62
I had to revise the amount outstanding on my mortgage, since I had made a small mistake last month. My liquidities went lower this month because I paid some bills outrights (such as the second installment of this year's municipal taxes). That was planned for, so this caused no problem at all.
Things are proceeding well. There is some slow-down at the company I am working for, due to delays in the start of some projects. But I should not be impacted since I work on a billable project for a client.
Thursday, May 21, 2009
Sun Life and Manulife Cut DRiP Fees
Last week, Sun Life Financial and Manulife Financial both announced that they were cutting fees on the dividend reinvestment and share purchase plan (DRiP/SPP). That is good news for Canadian DRiP investors, as these two companies used to have the highest fee structure in Canada -- so high that it was actually cheaper to use discount brokers to purchase shares.
The fees on dividend reinvestment and on additional purchases were completely eliminated, bringing these plans to par with Canadian banks that offer DRiP/SPPs.
Both companies also announced discounts on reinvested dividends (2% for SUnlife, 3% for Manulife).
These moves will the companies preserve (reinvestment discount) and raise additional capital at a relatively low cost (no fees on purchases). By now, this is a familiar song for investors in these days of the recession.
I have already made arrangements to add both companies to my DRiP portfolio. Only time will tell if these plans remain intact once the recession is over.
The fees on dividend reinvestment and on additional purchases were completely eliminated, bringing these plans to par with Canadian banks that offer DRiP/SPPs.
Both companies also announced discounts on reinvested dividends (2% for SUnlife, 3% for Manulife).
These moves will the companies preserve (reinvestment discount) and raise additional capital at a relatively low cost (no fees on purchases). By now, this is a familiar song for investors in these days of the recession.
I have already made arrangements to add both companies to my DRiP portfolio. Only time will tell if these plans remain intact once the recession is over.
Thursday, May 7, 2009
Reduced Harvest Energy... Too Soon
On Monday, I sold some 400 units of Harvest Energy Trust (Toronto: HTE-UN) at $6.70 within my RRSP account.
These were the units I purchased in early March, when I believed the market was pricing in a bigger cut to the distributions that I expected. Turned out I was wrong and the market was right, so the price kept going lower after I purchased. I decided to keep those units for a little while anyway, figuring they would trade within a range as long as the price of oil remained at $35-$45.
The price of oil rose quite a bit recently, and the price of Harvest followed. Since I was way overweight in that company, I decided to sell those additional units purchased in March, to take advantage of that rise (which I believe is temporary).
Turns out I pulled the trigger too early, because the price has kept climbing for the last two days, and will probably rise again today. So with hindsight it looks like I purchased too soon, and sold too soon.
I'm still turning a small profit on those units, but it would have been much larger had I waited three more days. However, since I still have a decent position in the company it doesn't hurt too much. I haven't lost any money, after all. And that was the point of not going for an all-out sale -- being able to participate if the stock kept going higher.
This freed up some cash that I'll be able to deploy elsewhere when the current bout of optimism falters and stumble. The market has just been distracted by the swine flu from the state of the economy.
These were the units I purchased in early March, when I believed the market was pricing in a bigger cut to the distributions that I expected. Turned out I was wrong and the market was right, so the price kept going lower after I purchased. I decided to keep those units for a little while anyway, figuring they would trade within a range as long as the price of oil remained at $35-$45.
The price of oil rose quite a bit recently, and the price of Harvest followed. Since I was way overweight in that company, I decided to sell those additional units purchased in March, to take advantage of that rise (which I believe is temporary).
Turns out I pulled the trigger too early, because the price has kept climbing for the last two days, and will probably rise again today. So with hindsight it looks like I purchased too soon, and sold too soon.
I'm still turning a small profit on those units, but it would have been much larger had I waited three more days. However, since I still have a decent position in the company it doesn't hurt too much. I haven't lost any money, after all. And that was the point of not going for an all-out sale -- being able to participate if the stock kept going higher.
This freed up some cash that I'll be able to deploy elsewhere when the current bout of optimism falters and stumble. The market has just been distracted by the swine flu from the state of the economy.
Wednesday, May 6, 2009
PepsiCo Increases Dividends
PepsiCo, the maker of soft drinks, fruit juice, snacks and other foods, has announced an increase of its quarterly dividend from $0.425 to $0.45, a 5.9% raise.
I own some shares of Pepsi in my RRSP account, so that's good news for me. At the current prices, it might even be interesting to buy some more shares. This increase will bring the dividend ratio to 3.6%, which is on the high side comparing it to the 1.9% average of the last 5 years.
I own some shares of Pepsi in my RRSP account, so that's good news for me. At the current prices, it might even be interesting to buy some more shares. This increase will bring the dividend ratio to 3.6%, which is on the high side comparing it to the 1.9% average of the last 5 years.
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