# Looking to add one more stock holding to my current portfolio



## newfoundlander61 (Feb 6, 2011)

As they year comes to an end it has been one that we will remember for sure. I did not sell any of my holdings during this year but did add 2 new stocks Loblaws & Capital Power, CPX has done okay and was purchased @28.90 Loblaws not so much but its a grocery stock  . 2 other stocks that I have kept and eye on are TRP & POW, completely different creatures for sure but the dividend income from both are pretty solid. TRP and the pipeline tangle seems to already be built in to the current stock price to some degree and POW seems to be one that capital appreciation is limited to say the least. Any input or opinions are most welcome, overall the year went pretty good with $12,800.00 of dividends received. Next year currently will be around $13,800.00 appox. See list below for my current holdings, the holding percentage for each is between 6 - 9% approx with currently 21% cash but I will use $6k x 2 for my wifes my TFSA to add additonal shares to Telus and AQN. I just copied and pasted them from my spreadsheet 

My plan is to keep holding Suncor and collecting the dividend for now, this one has been the not so good performer of the bunch.



TD Bank​Royal Bank​Scotia Bank​Fortis​Enbridge​Restaurant Brands​BCE Inc​Loblaws​Capital Power​
 

Telus​Suncor​
 

Choice Properties REIT​​Algonquin Power & Utilities Corp​A&W Revenue Royalties Income Fund​


----------



## AltaRed (Jun 8, 2009)

I am not sure I'd buy either TRP or POW. Dividend yield is not the first thing to look at. Total Return is (with ROE and ROC as key drivers).

For sure, the latter will frustrate the hell out of you. I owned PWF for many years and it was nothing but an 'okay' stock going nowhere. I don't think Power Corp has a real business strategy and besides, you have enough financials.

It is my view TRP will languish as well for the foreseeable future. It needs to get Keystone XL behind them....either built or abandoned. It is taking too much of management's attention when TRP should be re-thinking what it wants to be in the next 10 years. It's probably a good hold, but it is not going to excite.

There has to be something more exciting in a Dividend Aristocrat stock that has better ROE/ROC metrics. I only mention this because I think your strategy is dividend growth. I had TRI until it ran up high in October and replaced it with BAM.A in November. I hold ATD.B and CNR but both are expensive now. Point being though is to diversify a bit more into another sector even if yield is in the 1-2% range, or if that is anathema to you, 2-3% range.


----------



## newfoundlander61 (Feb 6, 2011)

Thankyou for the input and I see your point(s) regarding both stocks. "Point being though is to diversify a bit more into another sector even if yield is in the 1-2% range, or if that is anathema to you, 2-3% range." Good advice with this, thankyou.


----------



## AltaRed (Jun 8, 2009)

FWIW, I believe Suncor is going to do just fine. It is just going to take a bit longer, maybe a year, or two at most, for the oil situation to sort it itself out.


----------



## like_to_retire (Oct 9, 2016)

newfoundlander61 said:


> Thankyou for the input and I see your point(s) regarding both stocks. "Point being though is to diversify a bit more into another sector even if yield is in the 1-2% range, or if that is anathema to you, 2-3% range." Good advice with this, thankyou.


I think if you want a fairly reliable dividend provider, then POW is fine, but there won't likely be any growth involved. I suppose it depends on your goal with a new stock. I would probably add at least an industrial to your list. There are a number to choose from.

ltr


----------



## Money172375 (Jun 29, 2018)

My non-reg portfolio is all the typical Canadian dividend providers. (Banks, telcos, pipelines, utilities, insurance). I’ve had it running for 2-3 years now and while I’m happy with the dividends, I do worry about the possible lack of long-term growth. I’ve got a very long term time horizon.

can you recommend a few dividend growth stocks that might take me a little further out on the growth curve vs. Dividends. I’ve got a little BAM and OTEX.

thanks


----------



## AltaRed (Jun 8, 2009)

You need to do your own stock filters work with the Dividend Aristocrat list I linked above. Just don't get hung up on dividend yield percentage as a first or second priority. Include ROC (return on capital) or ROCE (return on capital employed) as a key measure (the company's ability to generate profit off its invested capital of debt plus equity).

For example, the ROCE for CNR is ~14% trailing as of mid-year and is a bit above the Transportation industry average of about 12%. Those are good numbers but is also why CNR is expensive now too. TFI is double digit too. As LTR suggested for the OP, an industrial would be a good addition.


----------



## Jimmy (May 19, 2017)

Money172375 said:


> My non-reg portfolio is all the typical Canadian dividend providers. (Banks, telcos, pipelines, utilities, insurance). I’ve had it running for 2-3 years now and while I’m happy with the dividends, I do worry about the possible lack of long-term growth. I’ve got a very long term time horizon.
> 
> can you recommend a few dividend growth stocks that might take me a little further out on the growth curve vs. Dividends. I’ve got a little BAM and OTEX.
> 
> thanks


The Brookfield companies are all designed for a 15%/yr return. BIPC Infrastructure Partners IMO is the best valued and has the dividend or BIP.UN for the registered accounts.

A good stable tech company is Constellation Software - CSU w a $34B market cap. It has a good 40%/yr return over 5 years and isn't too wild wild west. It is a core holding in many advisors portfolios. All they do is buy companies and grow. Or a tech ETF like XIT.


----------



## AltaRed (Jun 8, 2009)

But be aware of companies with a high ROE without looking also at Debt/Equity ratio. Many high ROE companies have leveraged balance sheets. Not a fan of highly leveraged companies, which is why I prefer use of Return on Capital Employed. Valeant had a tremendous ROE until it imploded with debt.


----------



## james4beach (Nov 15, 2012)

Strongly agree with adding something in another sector and Industrials is a good idea since it's a major Canadian sector. Some candidates are

CP , forward P/E = 21.7
CNR , forward P/E = 22.6
WCN , forward P/E = 26.7

I hold both CNR and CP


----------



## like_to_retire (Oct 9, 2016)

james4beach said:


> Strongly agree with adding something in another sector and Industrials is a good idea since it's a major Canadian sector. Some candidates are
> 
> CP , forward P/E = 21.7
> CNR , forward P/E = 22.6
> ...


In the Canadian Industrial sector under rails & roads I have long owned mid-cap TSX:TFII (TFI International -formerly Transforce). It might be considered a bit rich right now after a 51% share price increase this year (5 year at 27%), but it's fundamentals are still quite good. 

Myself, I have a positive outlook on shipping companies for the rest of the pandemic and beyond as I suspect a lot of the newly adopted online shopping will continue past the pandemic. TFI's P/E is 17.5x with an ROE of 17.8% and ROA of 7.0%. This is one of my low dividend growth stocks with a dividend at 1.75% (payout ratio of 27%).

ltr


----------



## MrBlackhill (Jun 10, 2020)

I see you want dividends and I agree you need industrials for diversification. Give a look at CGY and HDI.

CGY
Industrial - Specialty Business Services
Market cap $628M
Trailing P/E 28
Forward P/E 19
P/S 1.45
P/B 3.14
Dividend yield 1.74%
Payout 50%
Profit margin 4.71%
Operating margin 5.99%
Return on assets 6.15%
Return on equity 12.91%
Debt to equity 9.77%
Current ratio 2.19
Paying dividends every year since 2003
Average analyst price target (7) $73 (+13.46 %)
Rolling average 15-year total return since 1996 : +15.62% CAGR

HDI 
Industrial - Industrial Distribution
Market cap $557M
Trailing P/E 15
Forward P/E 12
P/S 0.45
P/B 1.79
Dividend yield 1.35%
Payout 19%
Profit margin 2.99%
Operating margin 4.61%
Return on assets 6.46% 
Return on equity 12.31%
Debt to equity 61.43%
Current ratio 2.08 
Paying dividends every year since 2011 (started in 2008 but didn't pay in 2009-2010)
Average analyst price target (5) $35.25 (+33.83%)
Rolling 7-year total return since 2008 between +8% CAGR and +58% CAGR

Another small name worth looking is RPI-UN in consumer cyclical.

For the bigger names in industrials, TFII and CNR as already mentioned. You should also look at TIH.

You have L but you should look at MRU also.

As mentioned, BAM is another big name which should be in your portfolio.


----------



## MrMatt (Dec 21, 2011)

I'm thinking BAM next, but what about PVI?

I already own BIP & BEP. They've been great.


----------



## Pluto (Sep 12, 2013)

For those looking for a little growth, BABA ADR's are really cheap right now. Fire sale won't likely last. 

For Canadian growth we have our communal CDN growth stock list:









What is your favourite CDN growth stocks?


James, of course you're correct in that you must compare apples to apples, so it's a requirement to chart Total Return as you say. In that regard, XCG is fairly close to the index (XIC.TO) as you can see by the attached chart. That's pretty interesting, thanks for posting. You're right. For...




www.canadianmoneyforum.com


----------



## AltaRed (Jun 8, 2009)

I doubt the OP wants to deviate from Cdn equities because he wants the eligible dividend, but if I was to do so, I would use an ETF for diversified ex-Canada exposure


----------



## Pluto (Sep 12, 2013)

^
Actually I was more responding to post #6. The OP seems to have dividend stocks under control so I can't really offer much there that they don't already know. 

Too, I would be very unlikely to recommend any etf due to overdiversification and generally mundane performance. However, I acknowledge some people like etf's and I'm in favour of people doing what they like. Growth mixed with dividend stocks is just my style, as it ballooned beyond my wildest expectations and relived me of thrift. I like spending, and growth enabled that. The only downside right now is when I transformed many of my growth stocks to dividend stocks it wiped out my oas. Darn. So I tilted a bit back to growth to see if I could get a tiny slice of oas.


----------



## like_to_retire (Oct 9, 2016)

Pluto said:


> So I tilted a bit back to growth to see if I could get a tiny slice of oas.


The trick is to make more than the $128K upper limit so it's all clawed back, then the 15% won't apply on any extra dollar after that.

ltr


----------



## AltaRed (Jun 8, 2009)

Or not to allow the tax tail to wag the dog. Owning the right investments for good investment CAGR is worth a lot more than the 15 cents on the dollar claw back.


----------



## agent99 (Sep 11, 2013)

Pluto said:


> For those looking for a little growth, BABA ADR's are really cheap right now. Fire sale won't likely last.


Seems like there is a reason for it being cheap?









Why Alibaba Just Lost $100 Billion in Market Value | The Motley Fool


A new investigation by the Chinese government sent the stock tumbling.




www.fool.com


----------



## james4beach (Nov 15, 2012)

I think it would also be good to benchmark the portfolio against XIC or XIU, just to see how the portfolio management performs in comparison.

The reason being that XIC/XIU themselves pay pretty good dividends. XIC yields 3%

The value of benchmarking is that, if you find over time that you aren't doing any better than XIC, then it would be easier to just use that. Then there's no need to worry about Baba, Bips, Beps and Baps.


----------



## AltaRed (Jun 8, 2009)

The OP has gone down the individual 'stock' path so with unrealized gains, I suspect that barn door is closed. But I agree XIC or XIU is a relevant option, or at least a relevant benchmark.


----------



## Eder (Feb 16, 2011)

I also think an industrial would complement your dividend portfolio. If the trains are too expensive you could sneak into a recovering Magna or New Flyer...more risk of course. I don't own either but the electric vehicle momentum may help these.


----------



## Money172375 (Jun 29, 2018)

Eder said:


> I also think an industrial would complement your dividend portfolio. If the trains are too expensive you could sneak into a recovering Magna or New Flyer...more risk of course. I don't own either but the electric vehicle momentum may help these.


Should have mentioned I hold Magna already. Got in at 69


----------



## AltaRed (Jun 8, 2009)

Deleted


----------



## Pluto (Sep 12, 2013)

agent99 said:


> Seems like there is a reason for it being cheap?
> 
> 
> 
> ...


Yes, but it will be temporary. BABA owns a chunk of ANT, a financial company. The government regulators are checking into the circumstances apparently to ensure ANT is not going to be over leveraged. All to the good. Then the ANT IPO will occur giving it a ton of capital to grow its business. Clearing this matter up will unleash BABA stock to further heights.


----------



## Pluto (Sep 12, 2013)

like_to_retire said:


> The trick is to make more than the $128K upper limit so it's all clawed back, then the 15% won't apply on any extra dollar after that.
> 
> ltr


Yes. Looks like this is inevitable. Can't avoid the tax man forever, so at some point, I will have to take a swig of moonshine and bite the bullet.


----------

