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

Colgate & UPS provide raises

Consumer products firm Colgate Palmolive (CL) has hiked it's dividend by 20%, citing a positive outlook. They have doubled their dividend since 2004.

Global shipping firm UPS (UPS) has raised it's dividend by 4.4%. That is their first raise since the end of 2007. UPS expects to earn $2.70 - $3.05 for 2010. The shares are currently trading at 20x these 2010 earnings, which seems like a rich valuation.

freight and food make investors richer

CN Rail (CNR) has increased it's dividend by 7% to $0.27 per common share. That marks 14 consecutive dividend increases since the company went public in 1995. CN's 4th quarter revenue and adjusted earnings were both down from 2008.

Canadian grocer, Metro (MRU.A) has increased it's quarterly dividend by 23.6%! Metro now yields 1.7%. Adjusted fully diluted net earning were up 8% in the first quarter of fiscal 2010.

net worth update, jan '10

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

Net worth results for the 2 Months Ended January 15, 2010:

• Debt/Asset ratio dropped to 0.46 from 0.47 (record low)
• Net Worth gained 3.0% (record high)
• Total Assets rose 1.8% (record high)
• Total Liabilities rose by 0.4%
• House Value/Total Assets fell to 61.7% (record low)
• Non-Registered Portfolio grew 5.3% (record high)

Our net worth growth keeps chugging along since bottoming out in March of 2009. Savings have still been a bit depressed but I see this picking up in February and March. We are still doing all the right things by living well within our means, saving regularly for investments in our future, and holding and adding to shares of dividend growing corporations.

Fortis powers dividend up

For the 37th consecutive year, Canada-based power distributor Fortis (FTS) has hiked their dividend. This increase came in at 7.7% from $0.26 to $0.28 per share.

This holding of mine represents a good example of how dividend increases and a timely purchase can add up to a profitable situation over time.

I purchased Fortis at an attractive price during the credit crisis and my adjusted cost base (ACB) is $21.73/share. Due to the fact that Fortis has been increasing their dividend regularly and that the share price has risen, my yield on cost (the yield that I am receiving on my intial investment) is 5.2% while the actual yield on Fortis shares today is only 3.9%. So someone purchasing Fortis shares today will receive 3.9% of their total investment in cash annually while I am garnering 5.2% of mine.

2009 net worth results

Well, with 2009 becoming a distant memory it's time to look back at how net worth held up here and with our usual suspects.

First off our net worth rose about 33% for 2009 calendar. That sounds much better than it truly is though, as our net worth was actually at a higher level in May of 2008 than it was in March of 2009. A milestone for 2010 would be to see our house value get to the point where it makes up 50% of our total assets. It currently sits at about 62%.

The Maritime Super-Blogger, at Million Dollar Journey posted a 29% increase in net worth over 2009 reaching the $400,000 mark. The 30 year old is 40% of the way to his goal of a $1,000,000 net worth by age 35.

Tim at Canadian Dream increased his net worth by 39% in 2009. During the year he focused on building his market investments. His net worth stands at $304,500.

If any other bloggers have calculated their net worth increase for 2009 please drop me a comment with your results or a link to your blog, and I will post your results with a link in a follow up post to this one.

climbing the ladder

Canada's, The Globe and Mail published an article recently called Financial Tips As You Climb The Financial Ladder. It was written by Larry MacDonald and it offers some financial advice for those in their 30's and 40's.

Many of my favourite financial blogs are actually mentioned in the article including Triaging My Way To Financial Success, The Dividend Guy, Michael James on Money, and Thicken My Wallet.

the moneygardener was also called out in #7 for the dividend hound that I am...

You are in your thirties or forties, moving up to higher levels of income in your career. Your children are growing up and you are making good progress paying down liabilities such as the mortgage. Overall, it's becoming easier to put money aside and invest for future needs, particularly retirement. Here are 10 financial tips to consider for this stage of life.

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.

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.

Happy Holidays!

Wishing you the best of the season from the moneygardener, and a successful 2010!

2009 Was A Great Year to Be A Stock Market Investor!

• While cowards fell by the wayside, the S&P 500 index has risen 24% for the year and has nearly doubled since the March low
• Some of the equities that we own are trading at or near their all time highs
• Leveraged investments into the heart of the late 2008 / early 2009 plunges have been paying mostly stable dividends and interest rates have remained low
• All signs are pointing to an improvement in dividend growth in line with general economic activity
• Our net worth has exploded over 30% while we've been doing a poor job of saving money
• All financial media outlets are preaching caution with your money, your mortgage, and your life.......the most bullish sign yet!

Australian Red Wine Roundup (moneygardener recommends)

• Wolfblass Red Label Cabernet Merlot 2008
• Rosemount Shiraz Cabernet 2008