Wealthsimple and Halloween, 2024

 

Halloween is getting techie. Walking into the local Home Depot recently I was amazed to see a Halloween display with a 7 foot tall Frankenstein and Zombie looking down at me while moving and growling. Cool! Animatronics at work. As long as they don't put learning AI in Frankie, I'm safe.

Wealthsimple sent me an email that they are celebrating their 10th anniversary and I remember when they started up. Managed portfolios with a low management fee and no commission fees for Trades plus a high interest saving account with CDIC protection But they were new and businesses go bust everyday if their product or service doesn't appeal to people.

Today they have over 50 billion under management and growing faster every year. Their next goal is a trillion under management while they evolve. I read a couple articles where Wealthsimple could be fielding some purchase offers from the big banks of Canada where it's about a growing competition. 

Watching and reading about them, I'm comfortable with Wealthsimple Trade these days, which also has options such as partial trades and a toggle off and on option for auto-repurchase into partial/whole shares from dividends or distributions paid to me.

Continuing with the Halloween theme, a snippet from their recent newsletter dated October 15th ...

Witching hour
Isn’t Halloween the best? Investors get to knock on the door of every public company, and — trick or treat! — get a Q3 earnings report tossed into their pillowcases. The frights! The thrills! This particular earnings season will be a big test for U.S. and Canadian markets, both of which notched new record highs last week. Have investors been right to be so exuberant? Or are consumers starting to cut back? And what effect, if any, is China’s quicksand economy having on companies? The answers started rolling in last Friday as the big U.S. banks reported earnings. JP Morgan, the world’s biggest bank, led the way with a so-far-so-good report, but we’ll get a lot more answers over the coming three weeks as earnings season peaks. We’ve seen enough horror movies to know how fast a keg party can turn into a bloodbath, so cue the Halloween theme song and remember: this is supposed to be fun.

I decided to buy JP Morgan's ETFs shortly after they became available here in Canada. JEPI and JEPQ, which I mentioned in my previous post. So far, so good and a gain to date on both as I await the first monthly distribution announcement.

My jump into the US market in a high yield way and I'm also interested in Schwab's SCHD, US Dividend Equity ETF with a market cap of 133 billion and a low 0.06% management fee. SCHD pays quarterly but I like the steady gains with top name company holdings like Home Depot, Blackrock, and Pepsico in the list of the current top ten holdings. I'll update on that decision.

The plan is to eventually get into some of the top US individual stocks by yield in a US portfolio but for now ... I'll do the ETF route for broad coverage and distribution income.

Meanwhile, my monthly buys into Canadian dividend paying stocks continue with companies like Enbridge, ENB and Fortis, FTS on my radar for the first half of November, 2024.

An Energy Spin-off for October, 2024

 

It's that time of year on the East coast of Canada with cool mornings, warming by noon and fall colours on the trees. Spring and Fall are my favourite seasons.

It's October and the S&P/TSX Canadian index is over 24,000 for the first time with a current year to date growth rate of 15.77%. I have to like those numbers but there's that old saying ... prepare for the worst but hope for the best. 

Being an income investor, the Markets will take a dive at times but I look at the positive side with the opportunity to buy my stocks at a lower price for an eventual rebound while collecting dividends. That happened over the last couple of years and depending on sectors, stock prices are currently inching up when the interest rates were cut during 2024 with more cuts planned.

An interesting development within the stocks I hold where the majority are in the top 25 among the the top 60 stocks in the TSX by dividend yield. 

TC Energy, TRP has spun off part of their company last week into South Bow Corporation, SOBO with the Globe and Mail having a decent article on that developement by David Berman for subscribers but below are some highlights while doing personal research is always recommended about debt load and the ability to maintain and grow the dividend in the future.

"The Calgary-based energy infrastructure company separated its oil pipelines from assets that include natural gas pipelines and storage. For every one share in TC Energy, investors received an additional 0.2 shares in a new company called South Bow Corp. SOBO-T

Canadian utilities are no slouches right now. The sector has rallied 12 per cent over the past three months, outperforming the S&P/TSX Composite Index as investors warm to attractive dividends and economically defensive stocks.

What’s more, South Bow’s annualized dividend is a big one, at US$2 a share. When the stock officially launched this week – conditional trading began on Sept. 25 – the implied yield based on future dividend payments was a dazzling 9.3 per cent."

South Bow's stock price is currently below $30 while SOBO will be an interesting watch for possible future buys when their Board announces the first dividend payments with an ex-dividend date. I assume it will be on the same date as TRP being on December, on the 27th.

From what I understand ... TRP and SOBO will split the dividend payments that TRP has been paying, proportionality.  

                                                                 TC Energy Pipeline Map

On the Your Ever Growing Income blog by Henry Mah I read and noticed that he started buying the Bank of Montreal, BMO being the laggard of the Banks in Canada from the last quarterly reports. BMO is also into the US and looks like a smart move by Henry where Banker management mentality is all about making more money and fixing issues for BMO in the future.

BMO is expensive at a current $124.30 CDN with a 52 week low of $102 and has moved up in price recently with an ex-dividend date of October 30th. Both TD and Wealthsimple Trade offer partial share buying as an option to build on stocks over time.

Mid October, I'll be thinking ahead to November and old reliable ... Fortis, FTS with a recent 4.2% dividend increase for it's 51st year of dividend increases. Fortis is a good foundation stock to build a portfolio on in my opinion.

Also, JP Morgan ... a US based bank recently ranked as the 12th largest corporation has moved up my way into Canada with the introduction of two interesting ETF's I've been watching on their US site for several months, The new to Canada, JEPI.TO and JEPQ.TO (Nasdaq - Techs) offer growth and income with US holdings. 

They may offer high yields which means more risk but their US counterparts are performing well since launching in 2020 for JEPI and 2022 for JEPQ.  They pay cash distributions monthly so interesting to see how much the first distributions will be and the yield plus any withholding tax when announced in this month of October.