Showing posts with label stocks. Show all posts
Showing posts with label stocks. Show all posts

Friday, October 1, 2010

sold two names to raise cash

To raise some cash for a business venture I sold my entire stakes in the following stocks this week.

Saputo (SAP) - The Canadian Food producer had run up so far from my adjusted cost base that it seemed like an obvious choice to take a nice profit.  The stock is now trading at a P/E of over 18x, which strikes me as a little rich.

Scotts Miracle Gro (SMG) - This stock never really fit into my dividend growth model and the stock has run up very nicely in recent months.  The stock likely has more room to run however it seemed like an ideal time to take a profit and exit the name for the time being.

Posting on the moneygardener should pick up over the next little while as I realize I have been nowhere to be found lately.

Monday, August 16, 2010

Leon's hikes dividend / Scotts doubles dividend

Canadian furniture and electronics retailer Leons (LNF) has raised it's dividend by 29% to $0.09 per share.  The raise came on  a nice earnings announcement where Leon's beat expectations quite handily growing their earnings per share 42% from last year.

US Lawn & Garden manufacturer Scotts Miracle Gro (SMG) doubled it's dividend on the back of a very solid earnings report.  Scotts reported an earnings increase of 12.5% versus the same quarter last year.  This news beat expectations and propelled the share price higher.

Owning both stocks, I've been having good luck with dividends lately...

Tuesday, July 27, 2010

quadrupled Bank of America position

It was nice to see my adjusted cost base plummet today as I quadrupled my stake in US Bank, Bank of America (BAC).  The stock is trading around $14.25 per share.  The dividend was all but wiped out during the financial crisis but I believe that it will come back with a vengeance over time.  Bank of America is very well positioned to reap the benefits of a slow US economic recovery, which is probably in the works.  The risk/reward on Bank of America trading at these levels seems very attractive as they own several valuable franchises, have great market share in US deposits, and have paid back their TARP funds.  The bank is currently trading at a multiple on around $1.00/share of earnings which I believe has the potential to expand to $2 without much trouble.  This would put the stock price easily into the $20s which is a signficant jump from here.

The dividend will come back as they years go on as inventors will want income from their investment in this large bank and the bank will no longer be tied down with the lingering issues of 2008.  This stock is rated a strong buy by 70% of analysts that cover it.  Earnings will come back as well albeit slowly and probably won't get to 2006-2007 levels anytime soon.

This is one of those trades where I felt like I needed to do the Warren Buffet thing and buy when others are selling; when the stock does not look attractive.  This industry is still in the toilet, their balance sheet is still recovering, and the economy is still pretty bad.  This is a good time to lower my cost base from my purchase years ago.  One of those 'close your eyes and click submit' trades.

Friday, July 23, 2010

GE - party like it's 1999

Well General Electric (GE) who cut their dividend from $0.31 per share to $0.10 per share in early 2009 has now boosted their pay out to $0.12 per share.  This 20% increase brings their dividend back to levels last visited in before the turn of the century.  Yes, GE shareholders including myself are partying like it's 1999.

This increase came earlier than expected as GE had mentioned that they were looking to a dividend hike in 2011.  They also announced an extension of their share repurchase program as they are sitting on loads of cash.  I'll take a dividend increase any way that I can get one and I remain confident in GE's future.  I especially like their involvement with alternative energy and developing market infrastructure.  Their high weighting in financial services really hurt them during the financial crisis.

Thursday, July 22, 2010

market snapshot

Economically sensitive seems to be a good thing this earnings season as the following companies blew through earnings expectations and dwarfed last year's results:

CN Rail: EPS = $1.13 versus $0.76 last year
UPS: EPS = $0.84 versus $0.44 last year
CAT: EPS = $1.09 versus $0.72 last year
3M: EPS = $1.54 versus $1.20 last year

These stocks are about as dependant on the economy as it gets.  There is a strange feeling in the markets lately.  There seems to be a large divide between how main street is looking and how corporations are performing.  Earnings are looking quite good but yet unemployment remains high, housing is still in the toilet, and consumer confidence is weak.  Costs that companies cut during the financial crisis are probably really paying off now as revenues come back to levels above 2009 but below prior years.  The fact that most analysts and onlookers are worried and bearish is probably a sign that markets will rise from here.  Typically in times like this the market climbs the wall of worry as expectations are low and upside surprise is more common.  As usual it is hard to say where the market will go from here but stocks usually trade in line with earnings and for the time being earnings seem fine. 

I will obviously continue to pick away at stocks that are already part of my portfolio but seem to be trading very cheap.  I've noticed the following opportunities lately:

Walgreen (WAG) - I added on June 29 at $26.50.  The stock has since recovered to $29.41.

Sun Life Financial (SLF) - Dividend investors have taken note recently as the shares traded down to under $26 yesterday resulting in a yield of about 5.5%.

Wednesday, July 14, 2010

Walgreen doubling dividend every 3 years

U.S. drugstore chain, and a stock that I have recently added to, Walgreen (WAG) has just raised their quarterly dividend 27.3% to $0.175 / share.

"This increase reinforces our commitment to provide meaningful returns to our shareholders and extends our track record of annual dividend growth" said CEO Greg Wasson

He was not joking about their track record. Walgreen has increased their quarterly dividend for 35 consecutive years. The company has also growth their dividend at a compound rate of 24.3% over the past six years.

Last year I blogged about how they nearly doubled their dividend since 2006. While in 2008 they raised it by 18%.

Walgreen shares are still pretty cheap trading at $29.30 (a P/E of 14x). I picked up some shares recently for about $26.50 (P/E of 12.7x). Interestingly enough Walgreen has not historically been known as a good dividend payer to hold as the yield on the stock was always well south of 2%. Given this latest increase the stock is now yielding about 2.4%, on my purchase the stock was yielding 2.6%, and on the financial crisis lows of March 6, 2009 the stock yielded a whopping 3.2% considering today's increase.

Thursday, July 1, 2010

Haagen-Dazs maker sweetens payout

The maker of Cheerios, Yoplait Yogurt, & Green Giant Corn among several other popular food brands has raised their dividend an impressive 17%. General Mills (GIS) is now paying $0.28 per share and the stock currently yields 3.2%. The company also laid out a 5 year growth plan that includes growing their earnings by 45% from current levels. They are counting on sales in emerging markets such as Russia, China, and India for some of that growth.

Considered a defensive stock, the company generates returns on equity of 28% and has grown their dividend and earnings very consistently over the past ten years. Their net profit margins have also held up fairly well over the years. A reduction in debt levels might make the company even more attractive going forward. Needless to say General Mills is definitely my type of stock.

Wednesday, June 30, 2010

good time to add to Walgreen

I added to my position in the large US drugstore chain Walgreen (WAG) yesterday. I have held this position for a few years now and I saw the recent severe weakness in the stock as an opportunity to lower my adjusted cost base.

Walgreen is down over 28% year to date versus 6.5% for the S&P 500 index. The stock is trading at a 52 week low sporting a P/E ratio of 12.7x earnings and a price to sales ratio of 0.40. This is a low debt, high return on equity company who in my opinion is catering to the right demographic. Drug cycles etc. will always effect their profitability but in the long term they will reap the rewards of being a convenient choice for an aging population.

Thursday, June 3, 2010

Reitmans wears an 11% higher dividend

I am starting to get used to all of these dividend increases within our non-registered portfolio. After announcing strong earnings that beat expectations, Canadian clothing retailer Reitmans (RET.A) also declared an 11% dividend increase. I have held shares in Reitmans since December of 2007, which was just after their last dividend increase. It is nice to see them break the dry spell as their earnings have perked up again after the financial crisis.

I initiated my position in Reitmans as mentioned in December of 2007, just after their dividend raise to $0.18 per share. I bought the shares at $18.18. I also added during January of 2008 when I felt that the shares were dirt cheap at $15.57. In November of 2008 I also added some more shares at $12.00 as the credit crisis struck. I was a bit early as the shares did trade down to a ridiculous $8.61 the next month. Overall my adjusted cost base on the stock is $15.07. The shares currently trade at $18.27 and yield 4.4%.

Sunday, May 9, 2010

Scotts to grow dividend

Scotts Miracle Gro (SMG) is a company which dominates their industry probably more than any other firm that I can think of. I don't post much about the stock which makes up a very small percentage of my portfolio, but their recent earnings report is worth noting and it came with a special bonus.

Scotts reported EPS of $1.80 compared with a the street's expectation of $1.46 and last year's $1.25. They also raised their full year guidance to $3.25+ from previous guidance of $3.00-$3.10. The special bonus was that the company stated on a call with analysts that they have a bias toward a share repurchase program and a dividend increase later in the year. This is great news for shareholders as Scotts' dividend has been at the same level since they introduced it in 2005. The stock only yields 1% currently.

The company seems to be on a roll recently as a major competitor left the market and North Americans have prioritized their lawns & gardens in the last year as money has become tight. I see gardening as a long term trend that will only become more popular as demographics change. Scotts Miracle Gro's strength lies in their savvy marketing, category domination, and decisive management.

Friday, May 7, 2010

wtf

Whatever happened at around 2:45pm on Thursday, May 6 was definitely interesting for anyone who follows the stock markets closely. I got back in my office after a birthday gathering for a coworker, and the first thing I noticed was that the Canadian utility Fortis (FTS), which is part of my portfolio, was down about 35%!

My first thought was that Google Finance was acting up as I have seen before. Next I noticed that Inter Pipeline Fund (IPL.UN) which I also hold was down by a catastrophic amount as well. After I saw this I quickly browsed over the the Financial Webring Forum where my fellow investors were already chatting about the Fortis situation. I then signed into my account at BMO Investorline to see if I could buy Fortis at $17/share, but the stock was up to $26. The day's low did read around $16 so this made me think that this drop was actually legit which boggled my mind. I then started seeing the reports on Google Finance and the Financial Webring about how this event was erroneous and trades will probably be cancelled. Kinda makes me glad that I don't believe in stop losses.

An interesting video clip to watch is CNBC personality Jim Cramer live seeing Procter & Gamble fall to $45 per share and calling it as a market error.

http://www.youtube.com/watch?v=2BQ0-194Igs

Thursday, May 6, 2010

telus upgrades dividend

Canadian telecommunications company Telus (T.A) has increased their dividend by 5.3% to 0.50 per share. This came as a bit of a surprise as the company missed increasing their dividend at the usual time and has been investing heavily in business infrastructure recently. I do DRIP shares of the firm so I welcome the bump. They also beat earnings epectations.

I don't expect much out of my investment in Telus; just consistent but small earnings and dividend increases as more Canadian citizens, employees, and businesses need smart phones, connectivity and other IT systems.

Wednesday, May 5, 2010

added to SunLife position

I added to my existing position in Canadian financial services firm SunLife Financial (SLF) today at $29.00/share. My rationale for the acquisition was simply that the stock looked like pretty good value in a recent market where several stocks look rich. Let's look at the numbers:

SunLife just reported first quarter earnings today after the closing bell of $0.72/share. This eclipsed the street's expectations by 11%. Earnings expectations for the company for 2010 were $2.89 per share before the release today. Assuming SunLife earns $2.89 this year the stock was trading at 10x 2010 estimated earnings when I made the purchase. I feel that this is a very reasonable valuation given their potential for earnings growth.

Another reason why this valuation was attractive was that at $29 per share SunLife was yielding 5% in dividends. Assuming that the company does not cut their dividend, which I don't believe that they will, this is a guaranteed 5% return. Combining this with a valuation of 10x earnings this seemed like a good point to add to my SunLife holding.

SunLife makes up about 7% of my non-registered portfolio.

Thursday, April 29, 2010

J&J; dividend rises & shares should be bought

Ho hum...Johnson & Johnson (JNJ) has increased it's dividend for 2010 by 10.2%. The stock has essentially gone nowhere over the past 8 years - since 2002. However:

Earnings per share have doubled over this period.

Dividends per share have tripled over this period.

J&J used to trade at a P/E multiple of 26x back in 2002 and now trades close to 13x. Net profit margins are actually higher now than they were in 2002, and return on equity has been fairly flat in the mid to high twenties. The company's debt position has grown slightly since 2002, however it sits at a very manageable level currently.

Pharmaceuticals are a tricky business as drugs come off patent and new drugs are hard to come by but J&J is only about 40% pharma. Consumer healthcare and medical devices provide more stable earnings to bolster the company year after year. The stock looks attractive right now at historic low P/Es.

Thursday, April 1, 2010

banks have finger on dividend button

Canadian bank CEOs have been going out of their way in the last few weeks to hint at upcoming dividend increases. The top brass at Royal Bank of Canada (RY), National Bank of Canada (NA), and even high pay out ratio, Bank of Montreal (BMO) have been expressing their thoughts on dividend raises lately. All three CEO's have essentially hinted at dividend raises in the near future. While regulation is holding them back a bit I am looking forward to the resumption of dividend growth in Canadian banks very soon. These canuck banks are overcapitalized! Share the wealth...

Here are the current dividend yields:

Royal = 3.4%
National = 4.0%
BMO = 4.5%
TD = 3.2%*
Bank of Nova Scotia = 3.9%
CIBC = 4.7%

*TD is my favourite bank and they make up the greatest portion of my portfolio (about 12%). It is interesting to note that they have actually trademarked the word 'WOW' in the US. They are very customer service focused in Canada and the US. The stock has given me a return on investment of over 39% including dividends since April of 2008.

Friday, March 26, 2010

doubled Canadian Oil Sands position

Yesterday I doubled my position in Canadian Oil Sands Trust (COS.UN).

To reiterate my reasons for purchase:
  • looking to increase exposure to resources in this portfolio
  • good way to get paid on the fate of oil with large potential capital appreciation in the future
  • distributions (interest income) will become dividends next year and they have large tax pools to offset some tax
  • well positioned company in a politically sound country
  • I believe oil prices will be strong for the next 20 years, China will be a good customer
  • Potential buyers should crop up over the years
  • Will add to position from time to time when it looks attractive for the long term

Thursday, February 11, 2010

Shoppers Drug will be ok

Well back in the summer I exclaimed Shoppers Drug Mart should increase their dividend! They did just that today as they hiked their payout 5%. Apparently this was in line with their earnings growth this year and makes their pay out ratio of 33% 'sector leading'. That is a higher pay out ratio than US chain Walgreen (WAG), which we own, at 27%, however WAG increased their dividend by 22% in 2009.

Shoppers Drug Mart's earnings growth has been slowing over the past few years however I fully expect them to return to double digit earnings growth in the next few years. They run an excellent business, their new stores are very well located and laid out, and they are in the sweet spot of demographic trends in Canada. More of us popping pills, trying to look younger, and getting lazy about big box stores will help this chain succeed going forward. While Shoppers is currently languishing because of an unresolved Ontario government issue and weaker earnings performance recently, I believe they will pull through this to be a part of the future of dividend growth in Canadian investments. I would consider anywhere south of the current level to be a reasonable entry point for the stock. At a P/E of 13-15x the stock looks like pretty good value considering their market position and potential earnings growth ahead.

Wednesday, February 10, 2010

first trades of 2010 - chips & heavy oil

So I made my first few trades of 2010 today:

Bought Intel (INTC) for my wife's RRSP.
- trading at just 12x 2010 forecasted earnings
- yield is over 3% and dividend was just raised recently
- good dividend growth history
- dominate their industry in an oligopoly
- turn over should increase with Microsoft's Windows 7 looking good
- we are light in the tech. sector in all of our portfolios
- financially sound company with low debt and loads of cash

Bought Canadian Oil Sands Trust (COS.UN) for our non-registered portfolio
- looking to increase exposure to resources in this portfolio
- good way to get paid on the fate of oil with large potential capital appreciation in the future
- distributions (interest income) will become dividends next year and they have large tax pools to offset some tax
- well positioned company in a politically sound country
- I believe oil prices will be strong for the next 20 years, China will be a good customer
- Potential buyers should crop up over the years
- Will add to position from time to time when it looks attractive for the long term

Wednesday, December 30, 2009

top 6 consumer goods stocks for 2010

I don't normally do this but I can't help linking to this article by TheStreet.com. The Street is touting 6 names as the Top 6 Consumer Goods Stocks for 2010, and by George I own 4 of them.

Scotts Miracle Gro (SMG)
Clorox (CLX)
Procter & Gamble (PG)
Phillip Morris (PM)
Johnson & Johnson (JNJ)
Pepsico (PEP)

The article does provide some good insight into the expected fortunes of these six firms as they move into 2010. With the exception of SMG they are all great dividend raisers as well. I agree that these are 6 very good companies to own shares in for the long term, especially if they can be acquired at reasonable value.

Saturday, December 26, 2009

got Husky-er

No, I didn't eat too much fruitcake and apple pie this holiday season, I just bought myself a gift on Christmas Eve in the form of 52 more shares of Canadian oil and gas firm Husky Energy (HSE) at $29.63/share. I've been looking to boost my portfolio exposure to oil and gas and after looking at a few option,s I came back to Husky for reasons not limited to the following:
  • After Husky shares had fallen from a high of around $52 in 2008 and the company's cut their dividend, they haven't bounced back as much as I expected given the rebound in oil prices. I now don't see a lot of downside for the shares as they price of oil feels firm now that the economy is out of the hole it was in.
  • The stock has also underperformed many other oil and gas stocks and the valuation seems reasonable at just $4 above it's multi-year low
  • I think Husky will be quick to raise their dividend back up once their earnings catch up to the price of oil. Husky is now paying $1.20/share in dividends, while their EPS in strong-oil years past has been in the $4-$5.50 range. I think we have some high-oil price years ahead of us...
  • The current yield of 4% offers some in pocket return with little risk of downside to the share price as the great recession moves further into history

Husky now makes up 7.4% of our non-registered portfolio.