Welcome to the September edition of Money While You Sleep. This is the first month in a while where we saw the TSX down month over month. We had a few changes in the portfolio, before we get into that here are a few highlights from the month as I think it’s very important to show people that you can be a investor, have a fulltime job and still enjoy life.

Maria took a girls trip to Banff

Z started grade 3 and C went to Pre-School, they are both excited to get back into routine

We got our family pictures done and decided to give it the beach look since we didn’t go on our annual trip

I celebrated another birthday

C is pretty excited about Mom’s new tires
Z passed yet another level in Swimming
Love this photo
Grade 3 for Z
First day of preschool for C

Portfolio details:

This month the the TSX dropped for the first time in months by dropping from $16,514 to $16,121 which is a decrease of 2.5%. We saw our portfolio outperform the market with an increase of 18% in August and came back to reality with only a gain of 1% in September. Portfolio moves not mentioned below: We made a quick play on GIGA.V. Yahoo posted an article on Sept 11 stating they were in talks with Tesla on some kind of partnership. We bought sold at the end of that day for a pretty impressive gain of over 90%. Sometimes you get lucky, this is one of those moments. We purchased 50 shares in BNS in September however as I’m writing this in October, after the ex dividend we sold this position at a profit and allocated the funds into BMO. We will discuss this more in my next post.

Sold

CHW.TO

This was purchased a couple years back and has not performed well in 2020. We were looking to free up some cash flow and this company has not met our expectations with so many other opportunities out there. It was a very small position and was sold practically even thanks to the dividend it paid in the past.

SIA.TO

Sienna living was a tough one to sell but with the recent lawsuits hanging over them we had to go with our gut and move on. I’d like to personally thank the boys at Stocktrades.ca for doing a great video that references the lawsuits, you can find a link to that video here. These lawsuits on SIA could do some significant damage to the company and more than likely the company would have to eliminate the dividend. Too much risk not enough reward. Thanks to the dividend this was sold at a small profit.

DOC.TO

We sold half our position in CloudMD. The purchase price on this was $0.59/share and we sold at $2.06/share. This was a gain of 249%. We still hold 3000 shares in this amazing company. We have our original investment on the 6000 shares out plus some extra $. Started feeling greedy so it was time to take a step back.

Bought

Bought into our first position in REAL (Real Matters Inc.) by purchasing 60 shares at $24.96 and an additional 70 shares at $23.00

Who is REAL.TO:

Real Matters Inc. provides technology and network management solutions to mortgage lending and insurance industries in Canada and the United States. It offers residential mortgage appraisals for purchase, refinance, and home equity transactions under the Solidifi brand to the mortgage lending industry; and insurance inspection services to property and casualty insurers under the iv3 brand. The company also provides residential and commercial real estate title and closing services through agreements with licensed title or escrow providers; and other related services, such as title search and capital markets services, as well as providing access to its software platforms to other title insurance agencies and mortgage lenders for a subscription fee under the Solidifi brand. The company was formerly known as Solidifi Inc. and changed its name to Real Matters Inc. in July 2010. Real Matters Inc. was founded in 2004 and is headquartered in Markham, Canada.

Our why:

Thanks to a friend of mine on mentioning REAL we did a hard look into the company. What we found was impressive. REAL has put up some impressive earnings in 2020 by beating analysts expectations by 62% and 15% over the last two quarters. There debt to assets are sitting nicely at around 10%, in times like these the less debt the better. Revenue over past three quarters are well ahead of 2019 levels. I have referenced both of these below for your viewing pleasure. Real Estate deals in the US continue to impress during these unpresidential times and REAL IMO will benefit.

Opened a position in Algonquin Power & Utilities Corp (AQN.TO) within the RESP by purchasing 100 shares at a price of $18.00/share

Who is AQN.TO:

Algonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets in Canada and the United States. It generates and sells electrical energy through non-regulated renewable and clean energy power generation facilities. The company also owns and operates hydroelectric, wind, solar, and thermal facilities with generating capacity of approximately gigawatt; and regulated electric, natural gas, water distribution, and wastewater collection utility systems. It serves approximately 267,000 electric connections; 369,000 natural gas connections; and 168,000 regulated water distribution and wastewater collection utility systems in the states of California, New Hampshire, Missouri, Kansas, Oklahoma, Arkansas, Georgia, Illinois, Iowa, Massachusetts, New York, Arizona, Texas, and the Province of New Brunswick. The company was incorporated in 1988 and is headquartered in Oakville, Canada.

Our why:

We were looking at adding into the renewable sector as we want to focus on the future and AQN fits the description. We already own NPI and that has performed quite nicely over the past couple of years. First off we like AQN because we like what they stand for, clean energy is the future and I believe they will trade at a higher appreciation with the support of known government intentions. AQN missed on Q2 earnings quarter over quarter by 26% however in that same time period operating cash flows increased by 113%. I believe Q2 was the worst we will see for the utility sector and that Q3 should look completely different with a massive improvement. At the time of purchase AQN’s P/E ratio was 18.75 well below its 5 year average of 25.72. AQN dividend growth streak is at 9 years with an 5 year average increase of 9.8%, this comes with a healthy payout ratio of under 60% which gives plenty of room to keep the streak going for years to come. This purchase adds $83/year in dividend income.

Dividend increases and decreases

  • No Raises
  • No Cuts

2016 – 2017 – 2018 – 2019 – 2020 Dividends and Rebates received

September dividends came in at $320.83 which is a slight increase year over year of 3%. This is keeping us in line with our 2020 goal of receiving $3,100 in dividends.

Dividends received in TFSA 1

Stock ListDividendDrip
FRU.TO$1.76No
SIA.TO$13.73Yes
EXE.TO$7.16Yes
CSH.UN$15.76Yes
ALA.TO$5.36Not enough
PLZ.UN$9.89Yes
NPI.TO$14.10Not enough
SIS.TO$5.17Not enough
EIF.TO$6.84Not enough
RUS.TO$40.66Yes
BPY.UN$57.10Yes
MFC.TO$52.08Yes
XTC.TO$30.31Yes
SU.TO$13.86Not enough
CTC-A.TO$22.75Not enough
MIC.TO$24.30Not enough
Total:$320.83

My thoughts moving forward

Current economy conditions

Canada unemployment rates are starting to improve by going from 12.3% in June to 10.9% in July to 10.2% in August, the consensus for September is set at 9.7%, we are continuing to go in the right direction. The federal government has continued to print money to keep the pandemic under control for now. I believe we will continue to see the US do the same. Here are a couple links over the past couple of weeks

Trudeau Vows ‘Whatever It Takes’ to Get Canada Through Covid

Canada launches C$10 billion infrastructure plan to aid economic recovery

Careful where you put your money

Over the past several weeks i have been making some adjustments to the portfolio to ensure that we have some cash on the sidelines to take advantage of any opportunities that present themselves. The second wave has begun in many locations and the market may see the impact of this. We have about 15% available currently for this reason. We still believe there are opportunities in any kind of market but you have to be cautious on what your buying. Look around and see where people money is being spent. Areas I would avoid are restaurants, theaters, oil and gas, transportation such as airlines to name a few going into winter and the second wave of the pandemic.

Sectors I like

Financials, Communications, Healthcare and utilities.

What to look for

Now that the third quarter is complete, be sure to check out the financials of these companies on their third quarter results. See how revenues are doing quarter over quarter, check those balance sheets and look for anything that looks out of place. Have assets dropped? Have liabilities taken a turn for the worse? How do assets compare to liabilities? Are debt levels increasing? Does anything look fishy? If so do your homework to understand what is going on. Keep an eye on earnings vs analysts expectations. Look for any forward guidance in the report that can help you better understand what management expects over the next few quarters. When checking if the dividend is in good shape focus on three metrics, Free Cash Flow %, Operating Cash Flow % and Payout Ratio %, these metrics can help determine the health of the current dividend.

Current companies I’m watching. I own some of these but don’t have a full position that’s why they are still on the list.

PIF.TO, ARE.TO, RY.TO, BMO.TO, EQB.TO, MFC.TO, SLF.TO, NWH.UN.TO, FTS.TO,CPX.TO, AQN.TO, T.TO, NFI.TO,BCE.TO, POW.TO, MIC.TO, DOC.V, NEWU, REAL.TO

Thanks for reading and feel free to leave a comment!

Invest in yourself

Brian

Disclosure:  I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. Please ensure you do your own research.

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Money While You Sleep 2020 September Edition


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