Hey investors! Hope everything is enjoying the summer so far. We have be very busy that past few weeks and time seems to being flying by.
Before I get into the portfolio here are a few things we have been up to and the reason I share this monthly is there is so much more to life than investing, it’s important to me that we find a balance to ensure we are still enjoying life while the portfolio does it’s thing:
- Celebrated my Father in laws 70th birthday with a nice meal at Japanese village. We were caught by surprise when Oilers coach Jay Woodcroft sat at our table, very cool.
- Maria and the kids enjoyed the movie The Bad Guys (a must watch even if you don’t have kids 😉
- C wrapped up his last ball hockey game.
- Celebrated my Moms birthday.
- Enjoyed a wonderful mothers day celebrating Maria, Sophie (Mother in law) and my mom Debbie
Well the markets continue to pull back as interest rate hikes come in at fastest rate I’ve ever seen in order to try and cool inflation. I will get to this in a moment. We will continue to invest in this market regardless of the dops as our timeline is outwards of 10-20 years. Were focused on sticking to our plan of buying solid pieces of great companies to hold into the future. In the meantime set those DRIP’s and let your money do the talking!
Here’s a breakdown of allocation:
May breakdown 79.6% Blue Chip, 18.4% Growth and 2% Cash
April breakdown 73% Blue Chip, 21.8% Growth and 5.2% Cash
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
As you can see we put some cash to work early in May
No sells in April
We added to Brookfield Renewables (BEPC.TO) by purchasing 22 shares at $44.97
Who is BEPC:
Brookfield Renewable Corporation owns and operates a portfolio of renewable energy power generating facilities primarily in Brazil, Colombia, the United States, and Europe. It operates hydroelectric, wind, and solar power plants with an installed capacity of approximately 12,812 megawatts. The company was incorporated in 2019 and is headquartered in New York, New York.
Renewable energy is going to play a key role in the economy going forward and I want to make purchases in the sector. . Brookfield Renewable will be part of the energy transition and they have deep pockets to do so. During the first Quarter of 2022 FFO came in at $243 million or $0.38/unit which is an increase of 17% YOY. They sell assets to drive value and fund growth. During the quarter, they signed an agreement to sell a small hydro portfolio in Brazil returning almost three times capital over our 10-year hold period. They also met all conditions to close the sale of a number of our Mexican assets developed by a 50% owned global solar developer. This will generate $240 million of proceeds ($30 million net to Brookfield Renewable) more than doubling the invested capital over a two-year hold period. This shows me that management is doing exactly what investors would expect. 70% of linked contracts are indexed to inflation which is a crucial concern at the moment for all businesses. Brookfield Renewable targets a sustainable distribution with increases targeted on average at 5% to 9% annually. Here are their recent results.
BEPC FIRST QUARTER RESULTS 2022
We added to Air Products and Chemicals Inc. (APD) twice by purchasing 6 shares at $235.50 and 4 shares at $230.36
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.
Again 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 expected EPS of $2.37 which the company beat by coming in at $2.38 YOY increase of 18%. 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. Third quarter target is EPS of $2.62 which would be a YOY increase of 13%, we will see if they meet the mark. This is my second a third purchase into the company in 2022.
We added to our position in Canadian Imperial Bank of Commerce (CM.TO) by purchasing 11 shares at $139.99
Who is CM:
Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to personal, business, public sector, and institutional clients in Canada, the United States, and internationally. The company operates through four strategic business units: Canadian Personal and Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; and Capital Markets. The company offers chequing, savings, and business accounts; mortgages; loans, lines of credit, student lines of credit, and business and agriculture loans; investment and insurance services; and credit cards, as well as overdraft protection services. It also provides day-to-day banking, borrowing and credit, specialty, investing and wealth, and international services; correspondent banking and online foreign exchange services; and cash management services. Canadian Imperial Bank of Commerce was founded in 1867 and is headquartered in Toronto, Canada.
It’s very difficult on which bank you should buy so instead of flipping a coin I decided to buy a bit more in our second TFSA in order to not hold CM in more than one specific account. CM offers a yield over 5%, with a payout ratio around 43% and a PE ratio of 9 which is slightly lower than its 5 year PE ratio of 10.5.
We opened a position in Restaurant Brands International Inc. (QSR.TO) by purchasing 25 shares at $68.63
Who is QSR:
Restaurant Brands International Inc. operates as quick service restaurant company in Canada and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and others. It is also involved in owning and franchising BK, a fast food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS restaurants quick service restaurants that offer subs, soft drinks, and local specialties. As of February 15, 2022, the company had approximately 29,000 restaurants in 100 countries under the Tim Hortons, Burger King, Popeyes, And Firehouse Subs brands. Restaurant Brands International Inc. was founded in 1954 and is headquartered in Toronto, Canada.
In my opinion food on the go is coming back in a big way. Now that the world has opened and many people are no longer working from home, I see this as a great opportunity for these businesses to increase revenue. Profit will be the challenge with the increase in inflation and short term margins may be off but we all know that these type of businesses with pass those costs over to the consumer. Were already seeing revenue ahead of pre Covid levels and I’m confident that will continue. Furthermore I see Tim Hortons improving the business and the Bieber partnership with help. 5 year average of PE ratio is 28 and current PE ratio is sitting at 17. Payout ratio on the dividend is now at a safer number of just under 80% and I’d expect for that to keep dropping.
We opened a position in EQB Inc. (EQB.TO) by purchasing 50 shares at $52.80
Who is EQB:
EQB Inc., through its subsidiary, Equitable Bank, provides personal and commercial banking services to retail and commercial customers in Canada. The company accepts term deposits and guaranteed investment certificates, high interest savings accounts, tax-free savings accounts, and institutional deposit notes, as well as specialized financing solutions. Its loan products include residential mortgages; equipment loans; home equity, cash surrender value, and commercial equity lines of credit; business enterprise solutions comprising mixed use, multi-residential properties, retail spaces, office condominiums, and industrial buildings; and asset repositioning, inventory, term, and construction loans. The company also offers digital banking services, as well as a range of banking solutions, including international money transfers, US dollar accounts, and a suite of registered products. The company was formerly known as Equitable Group Inc. and changed its name to EQB Inc. in June 2022. EQB Inc. was founded in 1970 and is headquartered in Toronto, Canada
EQB has been knocking it out of the park the past several years. Management knows what they are doing and have done a tremendous job for it’s shareholders. Before earnings were announced I decided the stock was trading at an impressive discount so I decided to take a position and couldn’t be happier with the results. First quarter numbers were posted: Revenue of 187.6 Million YOY increase of 25%, EPS of $2.51 YOY increase of 33%, Return on equity 18.3%. Customer growth increased 31%. Dividend increase of 4% follows the 51% increase just months before and a payout ratio under 10% showing that there is more room to continue to increase the dividend over the next several years.
Dividend increases and decreases
- EIF increased dividend 5.3%
- SU increased dividend 12%
- ABX increased dividend 100%
- EQB increased dividend 4%
- AQN increased dividend 6%
- CM increased dividend 3.1%
- BMO increased dividend 4.5%
- RY increased dividend 7%
2016 – 2022 Dividends
Dividends received were $209.82, which is a year over year increase of 31%. We had set out our annual goal of $5,000 for 2022, based on new funds and the amount of increases so far in 2022 we should have no issue achieving this! Chart below shows YTD dividends. Currently 33% to $5,000.
|PLZ.UN||$10.83||Yes, 2 shares||TFSA 1|
|APD||$45.00 US||Yes, 1 share||RRSP|
I put a boat load of $ into the markets in May and will continue to add over the course of the year. Although interest rates are rising and stock prices are dropping, for me this is the time that I want to put my money to work and keep the DRIPs going. I am no good at timing the market but if I learned anything in 2020 it is that time in the market is much more valuable than trying to time it.
Sectors I’m currently looking at
- Oil and Gas
Current Dividend watch list (Already own 7 of 8)
- Equitable Group
- Restaurant Brands International (New)
- Innovative Industrial Properties, Inc
- Air products and Chemicals (New)
- Algonquin Power & Utilities Corp
- Canadian Bank of Commerce (New)
- Brookfield Renewable Partners L.P.
Current Growth watch list (Already own 4 of the 6)
- 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.
One thought on “Money While You Sleep 2022 May Edition”
Great stuff Brian
Solid yr over year growth and a nice mix of lifes adventures last month.
Great buys, I recently added to our qsr, apd and bep positions as well.
keep it up man
Comments are closed.