Pipelines and Banks in March, 2023

 

I find it interesting and keeps me motivated when reading up on various sources of information and ideas/plans from Bloggers that have already achieved their investment goals, working towards them or just remain on a never-ending continual build of a portfolio 

I'll most likely be the latter where it will be a source of cash when needed or reinvestment funds to continue the "build" on dividend paying stocks and ETF's.

Individual stocks once bought have no management fees unlike ETF's ... but, with all the competition for investor's cash, many have very low management fees these days and I've seen a couple recently with none. Those that provide cash distributions with growth over the months and years are popular I'm sure. BlackRock and Vanguard and many others out there come to mind.

One of my holdings, PPL, or Pembina Pipelines (BTSX) has moved from monthly cash distributions to quarterly starting this month with an ex-dividend date of March 14th and a current yield of 5.61%

My focus will then be on the Canadian banks towards the 2nd half of March, with CIBC (CM) and National Bank (NA) having ex-dividend dates. 

Meanwhile, with the long term stocks where I like with a decent history, there's always something new that comes out.

Royal Bank of Canada (RY) recently launched a covered call ETF ("covered calls" usually comes with higher distributions) called RBC Canadian Dividend Covered Call ETF with ticker: RCDC.

An impressive list of 75 holdings by "weight" including BTSX stocks and many in the TSX Top 60 by dividend yield. The current yield is over 6% and pays monthly distributions. 

Recently, I was reading Tom Connolly's March updates on DividendGrowth.ca and he provided a link to a "Do it Yourself" investor with 36 years of experience and a 2 part interview on Bob's Tawcan Blog who's 100% focused on Canadian stocks and has the Tax impact factored in. 

https://www.tawcan.com/living-off-dividends-tax-free/

Any DIY investor living in a country can apply this with research and beefing up on that countries tax laws on how it impacts today and into retirement. The US, Europe and Asia for example have top quality dividend stocks. Only a Google search away but deeper research and the risk factor is always recommended

In that interview, the investor mentions the BTSX, which I also follow : 

High quality stocks are selected – conservative large cap stocks – most often dividend aristocrats – minimum 2% yield with the odd exception for superior growth stocks or those with growth potential. Great focus is placed on buying dividend aristocrats and stocks in the TSX Composite 60 Index with a nod toward following the Beat the TSX strategy. 

Tawcan: Funny B mentioned the BTSX strategy. Check out Matt, the brain behind Beating the TSX strategy, and his family’s amazing story about travelling the world with 4 kids. 

The Monthly Bill

 

It's the last day of February and heading into March with Daylight Savings Time and the much welcome, first fay of Spring.

March is also another what I call, a "Telecom" month with two heavyweights in that sector having ex-dividend days where initial or additional Buys need to be in to receive the quarterly cash distributions these companies payout to shareholders.

Bell Canada (BCE) and Telus (T) with current yields of 6.09% and 5.15% respectively, are monthly bill outfits for their paying customers and of course cell phone users, internet and TV subscribers see increases in rates over time.

BCE increased their dividend by 5.16%. T or Telus increased their dividend by 3.69% in December of last year and I expect to see more increases this year.

I'm more comfortable with large market cap companies like these that have a steady cashflow coming in from customers compared to ... let's say the mining industry which is very heavy on expense refining raw ore to iron or iron pellets for example. They depend on the day to day Market price commodity conditions with one of the largest importers in the world being China and their want for more or less during a given year for their steel mills.

That can either boost a Miners gains or go "under" and close a mine site permanently or temporary with China controlling that monopoly.

A different world compared to the Utility sector with mega companies in Canada like Fortis (FTS) and Emera (EMA) with customer bills generating cash for them every month that never go down even with inflation coming back to a 2% range some day or year. Only increases.

Mid March will bring on a look at more stocks with companies like TC Energy Corp (TRP) spending big bucks to get BC's natural gas pipeline and plant operational to supply customers in Asia and countries across the Pacific ocean. A top 5 Bank like CIBC.

There are also a lot of what they call "Passive Investing" opportunities becoming more popular with ETF's and Funds out there. Split Shares and Covered Calls that pay higher dividends causing the building attraction for some investors. More on them and how their cash generation helps with the accumulation of individual stocks I buy.