Welcome to March’s edition of Money While You Sleep. The markets came back to life in the month and we saw some massive gains. More on that later.
I work for a large corporation and the work load has been absolutely crazy. A few things I’ve noticed is Alberta is back in full force, from traffic on the road, to people back to work, inflation on chemicals/supplies and seeing a massive shortage of workers in all trades. Something to keep an eye on a we progress through the year.
Before I get into the portfolio here are a few things we have been up to:
- Took a trip to Banff for a business conference (home based business)
- Z wrapped up her musical theater performance competition.
- Wrapping up the season of the little mans can skate program (Highly recommended)
- Attended a couple hockey games including one with my beautiful family
We had a solid return in March not that we were worried or anything. Growth stock seem to have found their bottom for now which was nice to see. We swapped out a few stocks that have been under performing and not showing any dividend growth for quite some time and move that into a few positions we already hold. I will get to that shortly.
Here’s a breakdown of allocation:
March breakdown 74.3% Blue Chip, 21.3% Growth and 4.4% Cash
February breakdown 74.7% Blue Chip, 24.8% Growth and 0.6% Cash
We sold BABA on its high in March, although it fell massively earlier in the month it almost doubled and it seems like it may just be a little to inconsistent for our liking. The good news is we sold at a profit. We will keep our eye on it for now and consider adding once it stabilizes.
We sold Chartwell Retirement Residences (CSH-UN.TO). It has shown no dividend increases and has struggled ever since Covid happened. Occupancy has dropped, they have increased costs thanks to the pandemic and I’m not confident they can continue to pay distributions in the future.
We sold Extendicare Inc. (EXE.TO). Another name that has struggled through the pandemic. The payout ratio is terrible, no growth and may take sometime to improve the business.
We sold Lockheed Martin Corporation (LMT) at a 33% profit after only holding for a few months. I like the company but just felt it was trading a bit higher than where it should be and much of the rise is due to the issues with Russia and Ukraine. If it comes back down a bit I will take a position. I moved this into another US name that I feel provides a better valuation and current levels and I’ll get to that shortly.
We added to Manulife (MFC.TO) by purchasing 70 shares at $24.90.
Who is MFC:
Manulife Financial Corporation, together with its subsidiaries, provides financial products and services in Asia, Canada, the United States, and internationally. The company operates through Wealth and Asset Management Businesses; Insurance and Annuity Products; And Corporate and Other segments. The Wealth and Asset Management Businesses segment provides mutual funds and exchange-traded funds, group retirement and savings products, and institutional asset management services through agents and brokers affiliated with the company, securities brokerage firms, and financial advisors pension plan consultants and banks. The Insurance and Annuity Products segment offers deposit and credit products; individual life, and individual and group long-term care insurance; and guaranteed and partially guaranteed annuity products through insurance agents, brokers, banks, financial planners, and direct marketing. The Corporate and Other segment is involved in property and casualty insurance and reinsurance businesses; and run-off reinsurance operations, including variable annuities, and accident and health. It also manages timberland and agricultural portfolios; and engages in insurance agency, portfolio and mutual fund management, mutual fund dealer, life, annuity, long-term care, and financial reinsurance; and fund management businesses. Additionally, the company holds and manages provides investment management, counseling, advisory, and dealer services. Manulife Financial Corporation was incorporated in 1887 and is headquartered in Toronto, Canada.
For those that follow me you know that I really like Manulife. Really there isn’t much not to like post 2009. Were talking about a company that not only knows how to make money, they continue to raise the dividend each year in double figure numbers including an 18% increase in 2021, a low payout ratio of under 36% and with interest rates on the rise this may be just what Manulife needs to outperform and trade at a valuation that they deserve. I would not be surprised by years end if shares are trading above $30.
We opened a position in Air Products and Chemicals, Inc. (APD) by purchasing 20 shares at $226.81
Who is APD:
Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and services worldwide. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, syngas; specialty gases; and equipment for the production or processing of gases comprising air separation units and non-cryogenic generators for customers in various industries, including refining, chemical, gasification, metals, manufacturing, food and beverage, electronics, magnetic resonance imaging, energy production and refining, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. Air Products and Chemicals, Inc. has a strategic collaboration with Baker Hughes Company to develop hydrogen compression systems. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.
First off I want to thank Jason Fieber for bringing this company to my attention. He did a great review of the company really breaking the whole business and current valuation. APD has been bringing in some impressive earnings/ In 2020 Revenue was 8.99 Billion, EPS of $8.36 a share. In 2021 Revenue of 10.93 Billion YOY increase of 8.2%, EPS of $9.42 per share YOY increase of 9%. First reporting in 2022 (2nd quarter) analysts expect EPS of $2.37 YOY increase of 14%. Projected CAGR of 15% over the next 3 years, backlog of 17 Billion, many long-term contracts over the next 4 years, 40 year dividend growth streak and only a 60% payout ratio allowing for future raises. What’s not to like? Since purchasing it has already started to recover and is up just over 10%.
We added to Power Corporation of Canada (POW.TO) by purchasing 106 shares at $38.99
Who is POW:
Power Corporation of Canada operates as an international management and holding company in North America, Europe, and Asia. It operates through Lifeco, IGM Financial, and GBL segments. The company offers life, disability, critical illness, accidental death, dismemberment, health and dental protection, and creditor insurance; retirement and investment management; asset management; and reinsurance and retrocession; investment advisory, financial planning, and related services; and fund, protection, and wealth management services. It also provides employer-sponsored defined contribution plan, individual retirement account and drawdown, enrollment, communication material, investment option, and education services, as well as taxable brokerage accounts; private label recordkeeping and administrative services; payout annuities, equity release mortgages, life bonds, mortgage, securities, pension, private equity, debt and thematic fund, and financial services; and investment products, such as equity, fixed income, absolute return and alternative strategies, exchange traded funds, trust funds, and model-based separately managed accounts and portfolios. In addition, the company holds interests in various businesses, such as mineral-based specialty solutions; testing, inspection, and certification; cement, aggregates, and concrete; wines and spirits; sportswear and sports equipment design and distribution; materials technology and recycling of precious metals; disposable hygiene products; Atlantic salmon; customer experience and business process outsourcing; regional leisure parks; mobile game development and publishing; and bicycle manufacturing. Further, it generates renewable energy through solar and wind facilities; and designs, develops, and manufactures specification-grade LED solutions and zero-emission vehicles. The company was incorporated in 1925 and is based in Montréal, Canada.
POW has really turned the corner after being flat for many years. I held this position through the tough times and adding it to the better times. One investment most people don’t know is they own a massive position in Wealthsimple. They got in before really anyone even knew who Wealthsimple was and its paying off big time. Currently they own 70%, last year they shaved some of the position to lock in gains for shareholders. To show you how impressive they have been lets looks at EPS. In 2020 EPS was $2.99, in 2021 EPS came in at $4.77. A YOY increase 59%. Now I would not expect that type of growth to continue but it shows what they are capable of. Current valuation is attractive with a PE of just over 9, dividend growth streak of 7 and a payout ratio just over 38%. They have been good to me and I award them with add of shares.
Dividend increases and decreases
- Freehold Royalties Ltd. (FRU.TO) increased 33%
- Canadian Natural Resources Limited (CNQ.TO) increased 28%
- Enghouse Systems Limited (ENGH.TO) increased 16%
2016 – 2022 Dividends
Dividends received were $491.64, which is a year over year increase of 41%. We had set out our annual goal of $5,000 for 2022, which is going to require additional dividend increases in 2022. Chart below shows YTD dividends. Currently 22% to $5,000.
|EXE.TO||$7.60||Yes, 1 share||TFSA 1|
|CSH.UN||$16.68||Yes, 1 share||TFSA 1|
|PLZ.UN||$10.73||Yes, 2 shares||TFSA 1|
|ENB.TO||$72.24||Yes, 1 share||TFSA 1|
|MFC.TO||$124.41||Yes, 4 shares||TFSA 1|
|XTC.TO||$35.49||No, Turned off||TFSA 1|
|SU.TO||$47.04||Yes, 1 share||TFSA 1|
|LMT||$28.00 USD||No||TFSA 1|
Growth names coming back to life. There are still some opportunities out there if your looking for value, I suggest you make your watch list as I’m sure some of these valuations will allow for a nice long-term opportunities.
Sectors I’m currently looking at
- Banks (New to list)
- Oil and Gas
Current Dividend watch list (Already own 6 of 7)
- Alimentation Couche-Tard Inc
- Innovative Industrial Properties, Inc
- Algonquin Power & Utilities Corp
- Brookfield Renewable Partners L.P.
Current Growth watch list (Already own 5 of the 7)
- Facebook (NEW)
- Alibaba Group Holding Limited
- Nuvei Corporation
- WELL Health
- Good Natured Products
- Bragg Gaming Group
- BRP Inc
Thanks for reading and feel free to leave a comment!
Invest in yourself
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.