I have held a DRIP (Dividend Reinvestment Plan) in a few stocks since 2008. So time for an update.
China Mobile - CHL
I purchased 5.22 shares for $240 in 2008 and have reinvested the dividends. I now own 6.07 shares worth $326. 14% of the shares are from DRIP shares, and the return on my original investment is 36% (7.2% per year).
General Electric - GE
I purchased 73.75 shares for $1216 in 2008. I now own 85.81 shares worth $2119.48. 14% of the shares are from the dividend reinvestment plan, and the return on my original investment is 75% (14.9% per year).
My strongest performing investment in this group of DRIPs is ABV. The increase in shares is about the same, but a very strong increase in the stock price has made this a real winner for me.
Ambev, formally Companhia de Bebidas das Américas - ABV
I purchased 4.94 shares (24.7 shares after a 5:1 stock split in 2010) for $215 in 2008. I now own 28.36 shares worth $1088.90. 13% of the shares are from DRIP, and the return on my original investment is 506% (101% per year).
I chose to invest in ABV after visiting Brazil and finding their product everywhere. I recognized the company name when screening for available DRIP programs and chose to invest a few hundred dollars.
Overall, the stocks are adding 2.8% in new shares through DRIPs, plus the increase in the share price. As time goes on, more and more of the shares will be from DRIPs. At some point down the road, I could either stop the DRIP, and take the dividends in cash, or sell the stocks entirely.
This post was featured in: The Wealth Builder Carnival #137, and Carnival of Personal Finance #425.
Sunday, August 4, 2013
Is A Premium Credit Card Worth It?
I had a BMO Cashback MasterCard, no fee, earning 0.5% cash back. As my spending increased, I began to look at a fee based card. The BMO Cashback World MasterCard offers 1.25% cash back, but with a $79 annual fee.
At some point, the premium card will return more than the free card. In this case, with a spend of $10535/year or $878/month, the premium card returns more. At this spending rate, the free card will give $52.68 back at the end of the year, and the premium card will give back $131.69, less the $79 annual fee, or $52.69.
Since my annual credit card spend is much less than $10535, I elected to remain with the free card.
At some point, the premium card will return more than the free card. In this case, with a spend of $10535/year or $878/month, the premium card returns more. At this spending rate, the free card will give $52.68 back at the end of the year, and the premium card will give back $131.69, less the $79 annual fee, or $52.69.
Since my annual credit card spend is much less than $10535, I elected to remain with the free card.
RBC Access USA
I have been a long time user of RBC Access USA. This is a great cross border product for Canadians looking to access funds in the US.
When I applied, I was set up with an account in Canada, and an account at a US bank. The Canadian account is at RBC Royal Bank, and the US account is with RBC Bank.There is an easy web service to move funds between the two accounts with one log-in. RBC has two versions of the account RBC Access USA, and RBC Access USA Preferred. There was a no fee product when I first signed up, but now, the first has fees of $2.95/month and the second $19.95. Both accounts offer no fees on the PNC Bank ATM Network, and no RBC bank fees on Visa, NYCE or PLUS ATM.
My personal plus is the ability to write cheques on a US bank account. This comes in handy for direct investing where a US cheque is required (more than simply a cheque from a Canadian Bank in US funds).
Find out more from RBC here: RBC Access USA
When I applied, I was set up with an account in Canada, and an account at a US bank. The Canadian account is at RBC Royal Bank, and the US account is with RBC Bank.There is an easy web service to move funds between the two accounts with one log-in. RBC has two versions of the account RBC Access USA, and RBC Access USA Preferred. There was a no fee product when I first signed up, but now, the first has fees of $2.95/month and the second $19.95. Both accounts offer no fees on the PNC Bank ATM Network, and no RBC bank fees on Visa, NYCE or PLUS ATM.
My personal plus is the ability to write cheques on a US bank account. This comes in handy for direct investing where a US cheque is required (more than simply a cheque from a Canadian Bank in US funds).
Find out more from RBC here: RBC Access USA
The Blog Returns
After a long hiatus, I have decided to return to blogging. I hope to continue with the same content that I had in the past, give an update on some of the stocks mentioned in previous postings, and share my progress towards my investing and life goals.
I have moved my financial goals forward in the last four years. My career is advancing, and a combination of higher salary and higher networth is allowing me more choices and more to write about.
I look forward to dialoging with you on this site.
I have moved my financial goals forward in the last four years. My career is advancing, and a combination of higher salary and higher networth is allowing me more choices and more to write about.
I look forward to dialoging with you on this site.
Friday, November 20, 2009
Ooops QSR.UN Priszm Income Fund
I've held Priszm Income Fund, QSR.UN, through two distribution cuts, from $0.10 to $0.01 and now to $0.00. The company is cutting the distribution to shore up the balance sheet. However, my initial attraction was a high yield, and have decided to sell my shares and reinvest elsewhere.
In this tough market, income funds are showing some strain, trying to maintain distributions in the face of falling income. I'm gravitating away from retail stocks and am now moving towards more stable sources of distributions and dividend income. I took the funds that I recovered from my sale of QSR.UN and invested in Transalta, TA.
TA is a more stable electricity and utility company that has in recent months taken action to improve its green credentials by acquiring Canadian Hydro.
In this tough market, income funds are showing some strain, trying to maintain distributions in the face of falling income. I'm gravitating away from retail stocks and am now moving towards more stable sources of distributions and dividend income. I took the funds that I recovered from my sale of QSR.UN and invested in Transalta, TA.
TA is a more stable electricity and utility company that has in recent months taken action to improve its green credentials by acquiring Canadian Hydro.
Wednesday, October 28, 2009
TFSA - Tax Free Savings Accounts
The TFSA (Tax Free Savings Account) introduced by the Canadian Government in 2009 has become a cornerstone of my new investing philosophy. A TFSA is similar to a Roth IRA in the US; after tax monies are contributed, investments gains are tax sheltered within the account and withdrawals are tax free.
Some background on the rules:
Canadian residents age 18 or older can contribute up to $5,000 annually to a TFSA.
Investment income earned in a TFSA is tax-free.
Withdrawals from a TFSA are tax-free.
Unused TFSA contribution room is carried forward and accumulates in future years.
Full amount of withdrawals can be put back into the TFSA in future years.
Choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates (GICs) and bonds.
Contributions are not tax-deductible.
Neither income earned within a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit.
Funds can be given to a spouse or common-law partner for them to invest in their TFSA.
TFSA assets can generally be transferred to a spouse or common-law partner upon death.
Current investment amounts are only $5000 a year, but in 10 years this will provide an account of $50000 plus any investment growth. This is a significant sum and will be a significant part of any portfolio.
Some background on the rules:
Canadian residents age 18 or older can contribute up to $5,000 annually to a TFSA.
Investment income earned in a TFSA is tax-free.
Withdrawals from a TFSA are tax-free.
Unused TFSA contribution room is carried forward and accumulates in future years.
Full amount of withdrawals can be put back into the TFSA in future years.
Choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates (GICs) and bonds.
Contributions are not tax-deductible.
Neither income earned within a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit.
Funds can be given to a spouse or common-law partner for them to invest in their TFSA.
TFSA assets can generally be transferred to a spouse or common-law partner upon death.
Current investment amounts are only $5000 a year, but in 10 years this will provide an account of $50000 plus any investment growth. This is a significant sum and will be a significant part of any portfolio.
Wednesday, May 20, 2009
TNK TeeKay Tankers
I've come to a conclusion about my investing, I like learning about new things. I was watching a documentary about large super tankers, and got caught up a bit after the fact in researching all of the different ways to charter a vessel. For example there are time charters where a vessel is chartered at a given rate for a given time, or spot charters, where the going rate is paid. This got me to researching various companies, and I have decided to invest in TNK, Teekay Tankers. Teekay Tankers is owned 54% with a 53% vote by TK, Teekay corporation, and owned 46% with a 47% vote by public shareholders. TNK owns 9 Aframax and 4 Suezmax tankers, and manages their fixed rate and spot contracts to maximize their dividend and limit downside risk. To illustrate, their projected dividends are shown in the following table.
The spot rates for 2009 have been lower than in 2007 and 2008, but TNK seems to have enough fixed contracts to maintain a dividend, even at low spot rates, which lends it more stability than other players like NAT, Nordic American Tanker Shipping Ltd.
The spot rates for 2009 have been lower than in 2007 and 2008, but TNK seems to have enough fixed contracts to maintain a dividend, even at low spot rates, which lends it more stability than other players like NAT, Nordic American Tanker Shipping Ltd.
Sunday, April 19, 2009
DRIP Investing
I've been researching options for DRIP (Dividend Reinvestment Plan) Investing.
I'm currently using BNY Mellon (Choose investment plan enrollment) . This is where my holdings for General Electric, AmBev, and China Mobile are. I enjoy the website, easy to use. You get an investor number, where holdings are grouped. My only complaint is that my GE and CHL holdings are under on number, but my ABV was issued under another. Note, there is an option to group IDs together if you have multiples, but this involves a phone call and I haven't done that yet. There are plenty of holdings to choose from, I'm thinking of adding American States Water Company (AWR) , and Waste Management Inc (WMI).
The other option that I'm looking at is Computershare. This is the transfer agent for Walmart, Coca-Cola, McDonald's, Exxon and so on. This looks like a good option and one I'm wanting to try soon. The only issue is that all foreign investors have to invest via a mail in form, no online access. I will report soon.
Note all of these require US funds drawn on a US bank. I've used RBC Access USA to establish a US bank account. See my previous post,RBC Access USA.
I'm currently using BNY Mellon (Choose investment plan enrollment) . This is where my holdings for General Electric, AmBev, and China Mobile are. I enjoy the website, easy to use. You get an investor number, where holdings are grouped. My only complaint is that my GE and CHL holdings are under on number, but my ABV was issued under another. Note, there is an option to group IDs together if you have multiples, but this involves a phone call and I haven't done that yet. There are plenty of holdings to choose from, I'm thinking of adding American States Water Company (AWR) , and Waste Management Inc (WMI).
The other option that I'm looking at is Computershare. This is the transfer agent for Walmart, Coca-Cola, McDonald's, Exxon and so on. This looks like a good option and one I'm wanting to try soon. The only issue is that all foreign investors have to invest via a mail in form, no online access. I will report soon.
Note all of these require US funds drawn on a US bank. I've used RBC Access USA to establish a US bank account. See my previous post,RBC Access USA.
Monday, April 13, 2009
Canadian High Interest Savings Accounts
Recently I've been looking for a place to stash some of my free cash. I had been using ING but am disappointed by the dwindling interest rates. This type of review has appeared in a few places but thought I would share the most up to date information.
1. ICICI Bank 2.0%
2. PC Financial Interest Plus 1.45%
3. Achieva Financial 2.10%
4. Outlook Financial 2.00%
5. Altamira High Interest Cash Performer 1.05%
6. Citizen's Bank 1.85%
7. ING Direct 1.70%
ING is the bank that I'm currently with. See my sidebar for an orange key and current ING sign-up bonus.
8. HSBC 1.50%
9. Manulife 1.55%
10. RBC 1.50%
1. ICICI Bank 2.0%
2. PC Financial Interest Plus 1.45%
3. Achieva Financial 2.10%
4. Outlook Financial 2.00%
5. Altamira High Interest Cash Performer 1.05%
6. Citizen's Bank 1.85%
7. ING Direct 1.70%
ING is the bank that I'm currently with. See my sidebar for an orange key and current ING sign-up bonus.
8. HSBC 1.50%
9. Manulife 1.55%
10. RBC 1.50%
Saturday, April 11, 2009
New Picks OPC and ABV
Some new additions to my portfolio, OPC and ABV.
OPC -OPTI Canada Inc. (OPTI) is a Canada-based company focused on developing major oil sands projects in Canada. Its first project, Phase 1 of the Long Lake Project (the Project), consists of 72,000 barrels per day of steam assisted gravity drainage (SAGD) bitumen production integrated with an upgrading facility. OPTI is focused on developing the next integrated oil sands project in Canada, Phase 1 of the Long Lake Project (the Project), in a joint venture with Nexen Inc. in which OPTI has a 35% working interest.
ABV- Companhia de Bebidas das Americas - AmBev (AmBev) is a Brazil-based company. AmBev and its subsidiaries produce, sell and distribute beer, draft beer, malt, soft drinks and other non-alcoholic beverages, such as isotonic sport drinks, iced tea and water. The Company operates in 14 countries in South, Central and North America. Its business is divided in three segments: Brazil, Hispanic Latin America, and North America. The Brazilian segment commercializes beer, carbonated soft drinks and non-alcoholic non-carbonated drinks, malt and by-products to third parties. The Hispanic Latin America segment operates in Argentina, Bolivia, Chile, Paraguay, Uruguay, the Dominican Republic, Ecuador, Guatemala, Nicaragua, Peru and Venezuela. In the North America segment, it is active in the sale and export of beer in the United States and Canada, through Labatt Brewing Company Limited. As of 2008, the Company holds a 99.56% stake of Quilmes Industrial Societe Anonyme.
OPC is a speculative move for me. I'm either holding until the company is bought out, or until production ramps up in the long lake project. ABV is a more long term holding, increasing my exposure to BRIC.
OPC -OPTI Canada Inc. (OPTI) is a Canada-based company focused on developing major oil sands projects in Canada. Its first project, Phase 1 of the Long Lake Project (the Project), consists of 72,000 barrels per day of steam assisted gravity drainage (SAGD) bitumen production integrated with an upgrading facility. OPTI is focused on developing the next integrated oil sands project in Canada, Phase 1 of the Long Lake Project (the Project), in a joint venture with Nexen Inc. in which OPTI has a 35% working interest.
ABV- Companhia de Bebidas das Americas - AmBev (AmBev) is a Brazil-based company. AmBev and its subsidiaries produce, sell and distribute beer, draft beer, malt, soft drinks and other non-alcoholic beverages, such as isotonic sport drinks, iced tea and water. The Company operates in 14 countries in South, Central and North America. Its business is divided in three segments: Brazil, Hispanic Latin America, and North America. The Brazilian segment commercializes beer, carbonated soft drinks and non-alcoholic non-carbonated drinks, malt and by-products to third parties. The Hispanic Latin America segment operates in Argentina, Bolivia, Chile, Paraguay, Uruguay, the Dominican Republic, Ecuador, Guatemala, Nicaragua, Peru and Venezuela. In the North America segment, it is active in the sale and export of beer in the United States and Canada, through Labatt Brewing Company Limited. As of 2008, the Company holds a 99.56% stake of Quilmes Industrial Societe Anonyme.
OPC is a speculative move for me. I'm either holding until the company is bought out, or until production ramps up in the long lake project. ABV is a more long term holding, increasing my exposure to BRIC.
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