Money While You Sleep 2019 December Edition

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Well December has come and gone and it seems to be a month that just passes by. I had most of the month off as i still had quite a bit of vacation to take. So we decided to go to Mexico for 10 days and get some sunshine in. It was much needed and the family and I had a blast. We also opened plenty of new positions in our portfolio, mainly solid long term performing stocks in my mind that is. Christmas was good, lots of food and time with Family and Friends. Here are a few pictures:

Now let’s get down to business!

Portfolio details:

As you know if you have been following my blog we slightly changed the strategy using about 5% of the portfolio to trade mainly well respected companies, when short term noise has hurt the stock price we purchase these companies and then move on to the next candidate. This month saw no profit made as nothing was sold. This bring’s the 2019 total to $5,169 not including any dividends received. 

Purchased

Opened up a new position in Royal bank of Canada by purchasing shares @ $104.94

Who is RY?

Royal Bank of Canada operates as a diversified financial service company worldwide. The company’s Personal & Commercial Banking segment offers check and savings accounts, credit cards, mortgages, loans, investment products, payments, international trade, and business advice services. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management provides a suite of advice-based solutions and strategies. The company’s Insurance segment offers life, health, home, auto, travel, wealth, annuities, and reinsurance advice and solutions; and creditor and business insurance services to individual, business, and group clients through its field sales force, advice centers, and online, as well as through independent insurance advisors and affinity relationships. Its Investor & Treasury Services segment provides asset, cash management, transaction banking, and treasury services to institutional clients; correspondent banking and trade finance services for financial institutions; and short-term funding and liquidity management services. The company’s Capital Markets segment offers corporate and investment banking, as well as equity and debt origination, distribution, sale, and trading services for corporations, institutional investors, asset managers, governments, and central banks. The company was founded in 1864 and is headquartered in Toronto, Canada.

My Why:

Royal Bank ranks 3rd on my list for 2020. They have the 2nd highest dividend growth over the past 5 years of the 7 banks I studied at 7.5%. They have a payout ratio of around 45% and they have a return on equity of 17.16 only slightly behind NA. This purchase will give us around $126 in dividends in 2020. They are the largest Bank in Canada if you didn’t know.

Opened up a new position in Canadian Tire by purchasing 20 shares @ $147.60

Who is CTC-A.TO?

Canadian Tire Corporation, Limited provides a range of retail goods and services in Canada. The company operates through three segments: Retail, CT REIT, and Financial Services. The Retail segment retails general merchandise, apparel, footwear, sporting equipment, gasoline, sporting goods and active wear, and workwear under the Canadian Tire, SportChek, Sports Experts, National Sports, Pro Hockey Life, Atmosphere, Mark’s, PartSource, Gas+, and Helly Hansen banners. This segment also participates in loyalty programs, as well as sells its products online. The CT REIT segment operates as a closed-end real estate investment trust that holds a portfolio of properties comprising Canadian Tire stores, Canadian Tire anchored retail developments, mixed-use commercial property, and distribution centers. The Financial Services segment provides financial and other ancillary products and services, including credit cards, in-store financing, insurance products, and retail and broker deposits; and savings accounts and guaranteed investment certificates. The company was founded in 1922 and is headquartered in Toronto, Canada.

My Why :

Well for one just look at the companies they own, very impressive i mean just look at that Moat. Recently they have had some news come out regarding the stock being extremely over valued and it’s being shorted. Although i wish i waited a couple weeks to pull the trigger I’m confident in the brand long term. At current price they have a PE of 12.49 which is well below their 5 year average and dividend is 3.25%. This purchase will give us around $91 throughout the calendar year of 2020.

Opened up a new position in CIBC by purchasing 22 shares @ $110.36

Who is CM.TO?

Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to personal, business, public sector, and institutional clients in Canada, the United States, and internationally. The company operates through four strategic business units: Canadian Personal and Small Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; and Capital Markets. It offers chequing, savings, and business accounts; mortgages; loans, lines of credit, student lines of credit, and business and agriculture loans; investment and insurance services; and credit cards, as well as overdraft protection services. Canadian Imperial Bank of Commerce also provides day-to-day banking, borrowing and credit, investing and wealth, specialty, and international services; correspondent banking and online foreign exchange services; and cash management services. The company serves its customers through its banking centers, as well as direct, mobile, and remote channels. Canadian Imperial Bank of Commerce was founded in 1867 and is headquartered in Toronto, Canada.

My Why :

From a overall value perspective CM is my 2nd choice out of all banks for 2020. They are third in 5 year dividend growth over the past 5 years at 7.3%, they have the lowest debt/equity of the top 5 banks at 138, a 3 year earning growth better than the other 4 of 13.8 and have the lowest PE ratio of the 7 banks I studied at around 9.84. This purchase will give us $155.38 in forward dividends for the 2020 calendar year.

Opened up a new position in IMO by purchasing 88 shares @ $34.15

Who is IMO.TO?

Imperial Oil Limited explores for, produces, and sells crude oil and natural gas in Canada. It operates through three segments: Upstream, Downstream, and Chemical. The Upstream segment explores for and produces crude oil, natural gas, synthetic oil, and bitumen. As of December 31, 2018, this segment had 404 million oil-equivalent barrels of proved undeveloped reserves. The Downstream segment is involved in the transportation and refining of crude oil, as well as blending, distribution, and marketing of refined products. It also transports crude oil to refineries by contracted pipelines, common carrier pipelines, and rail; maintains a distribution system to move petroleum products to market by pipeline, tanker, rail, and road transport; and owns and operates natural gas liquids and products pipelines in Alberta, Manitoba, and Ontario. In addition, this segment markets and supplies petroleum products to motoring public through approximately 2,200 Esso and Mobil-branded sites. It sells petroleum products, including fuel, asphalt, and lubricants for industrial and transportation customers, independent marketers, and resellers, as well as other refiners serving the agriculture, residential heating, and commercial markets through branded fuel and lubricant resellers. The Chemical segment manufactures and markets various petrochemicals and polyethylene, such as benzene, aromatic, and aliphatic solvents; plasticizer intermediates; and polyethylene resins. The company was founded in 1880 and is headquartered in Calgary, Canada. Imperial Oil Limited is a subsidiary of Exxon Mobil Corporation.

My why:

Too be honest at first i was looking at CNRL. Went i got back from vacation in had increased by something like 30% so I started looking at other options and I already have a position in Suncor. When I did my study between IMO,SU and CNQ, IMO ranked the highest for 2020 based on the following metrics. 5 year Dividend growth was 9.5% just slightly lower than CNQ (10.8%) and SU (11.5%) respectively. They have the lowest payout ratio by a huge margin at 20.5%, Debt/equity they were the lowest at 21.15%, return on equity they came in 2nd with 12.74 only to CNQ (14.45). They have a nice 3 year earnings growth at 27.3%, lowest PE ratio of around 9.49 and a price/book of 1 which is 16% lower than CNQ and 36% lower than SU respectively. Both Suncor and CNRL tied for second. This purchase will increase annual dividends in 2020 by $77.44, although i believe there could be a significant rise up in price per share.

Opened up a new position in our kids RESP by purchasing 40 shares in TD @ an average share price of $73.45

Who is TD.TO?

The Toronto-Dominion Bank, together with its subsidiaries, provides various personal and commercial banking products and services in Canada and the United States. The company operates through three segments: Canadian Retail, U.S. Retail, and Wholesale Banking. It offers personal deposits, such as checking, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; financing options to customers at point of sale for automotive and recreational vehicle purchases through auto dealer network; credit cards; investing, advice-based, and asset management services to retail and institutional clients; and property and casualty insurance, as well as life and health insurance products. The company also provides capital markets, and corporate and investment banking services, including underwriting and distribution of new debt and equity issues; providing advice on strategic acquisitions and divestitures; and trading, funding, and investment services to companies, governments, and institutions, as well as automated teller machines, telephone, Internet, and mobile banking services. It offers its products and services under the TD Bank, America’s Most Convenient Bank, and TD Ameritrade brand names. The company offers personal and business banking products and services through a network of 1,091 branches and 3,509 automated teller machines in Canada; and through a network of 1,241 stores. The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

My why?

If you follow my posts you know it’s no secret TD is by far my favourite bank and after doing a study they topped my list for 2020 just slightly over CM. They have the best 5 year growth rate of the 7 banks i studied at 9.5%. They have the 2nd lowest debt/equity of the big 5 at 176, again came in 2nd of the 5 on return on equity with 15.11, they have the best price/cash flow of the big 5 with 3.54 and the 2nd best 3 year growth rate of 12.5. At least half their business comes from the US which gives them some diversification away from Canada. We recently opened up the RESP for our kids and felt this was the right decision for it’s first holding. This will bring in $118.40 of forward dividends for 2020 and the start to compounding this account so our children have the open for post secondary if they so choose.

Dividend increases or decreases

Canadian Tire increased dividend by 9.64%

No decreases this month

2016 – 2017 – 2018 – 2019 Dividends

Dividends received in December were $320.33 which is a slight increase year over year and this helped us achieve our 2019 annual goal of $2,400 by receiving $2,523.33.

Dividends received per stock

Stock List	December
CSH.UN	$11.10
CJ.TO	$4.05
PLZ.UN	$9.38
ARX.TO	$8.95
ALA.TO	$5.36
EXE.TO	$6.92
FRU.TO	$5.99
GH.TO	$5.18
SIA.TO	$13.26
MFC.TO	$32.50
XTC.TO	$27.00
POW.TO	$34.43
CHW.TO	$7.00
NPI.TO	$14.00
CHR.TO	$15.44
SIS.TO	$4.98
SU.TO	$27.30
TOG.TO	$9.13
RUS.TO	$38.76
BPY.UN	$39.60
	December
	$320.33

What do you think of our new positions going into 2020?

It was time to make purchases that focus on dividend growth as over a longer period of time it really starts to compound. Although many of the dividends that will be paid won’t be enough to DRIP, the money will be put to good use as we continue to add new money in to invest anyway so fees won’t pose an issue.

Thank you for reading, see you next month and remember:

INVEST IN YOURSELF

Brian