April Review / May Preview, 2018

Busy Gremlin here to talk about how my investments performed in April, and what is expected of May.  April was a very solid month for my investments; while many of my coworkers and friends lamented the roll coaster in the stock market, I just smiled and kept collecting cash. I also smile when any jest is made about how inexpensive my lunches are (never really break $1.50 cost except for rare occasion) and that through my bike and the train my commute is free.  Small savings and side cash, are a formula for success.

April also had some work travel for me.  I am not the biggest fan of work travel, as I have done a lot of it over the years and it can be a drag, however I do try to take advantage to save extra cash and see something new.  Last month as part of my travel I wedged in a brewery visit.

April:

This month I made one purchase, buying shares in the Royal Bank of Canada (RY), while selling legacy holdings Pengrowth Energy (PGH) and Willamette Valley Vineyards (WVVI).

Last month I brought in a total of $74.85 in dividends ($65.85 taxable, $9 Roth, and $0 IRA).  This is an increase from last year ($70.94 total) by 5.5%.

In terms of dividend increases, I realized* 5 raises from the Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC), Coca-Cola (KO), Realty Income, and Walmart.  The increases ranged from 0.2% to about 5.5%.  I have now realized 23 raises thus far this year.

Next month I will realize four raises from the Gap (GPS), Ameriprise Financial (AMP), Kinder Morgan (KMI), and General Dynamics (KMI).  The increases range from 5% to about 60%. For the record KMI raised their dividend 60%, which is clawing back from the 75% cut they had in early 2016.

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.

May:

The mortgage continues, so at least part of our 'rent' counts towards our house. Our debts currently outstrip our assets (I choose not to count the house as an asset).  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  Both my car and house are receiving slightly out-sized payments monthly.  We are effectively eliminating debt, while still building and assets.  Even on just one income

Hopefully May is a quiet month, but I would not hold my breath.  Nothing gets quiet, slows down, or goes exactly according to plan when you have a baby.  That being said, none of those concerns are a bad thing!

I should have a buy in my IRA, but I might old off until June depending on the market prices and closure of the Dr Pepper Snapple (DPS ) - Keurig / Green Mountain merger.  In addition, I will likely write a quick historical analysis relating the stock market, business cycles, and historical revolutions.  If that sounds weird to read, it felt weirder to type, but it will all wind itself together in a rational sense.

Next month should produce around $270 in dividends, which is a 9.5% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great March.
- Dividend Gremlin
- Long all stock tickers mentioned (except PGH and WVVI)

Brewery Review, April 2018

Beer Gremlin here to conduct a brief brewery review.  Recently I had to travel for work, which is not the most desirable thing in my opinion.  The trips are short, the free time is minimal, and I am away from my family.  However, while I am out I might as well make the most of the situation.  After all, it is a slight break from the norm and my expenses are essentially covered, so the little extra freedom is I use to my advantage.

For this trip I was in Kansas City.  While there I popped into the new (2-3 month old) brewery called Casual Animal, close to the heart of the town.  I tried a total of six (out of nine) different drinks before heading straight to bed.  The six were their lager, honey ale, wit style, Belgian spiced ale, the double IPA, and the brown ale, which I will discuss briefly.

Cutting to the chase with the three light beers; they were alright.  A little light on flavor for my taste, but I think they would make excellent choices in the summertime.  Of them the wit was my favorite, and the honey ale was the one I thought could use more kick.

The darker drinks I found more to my liking.  The brown was nice, but needed some extra malt to really pull the flavor through.  The two winners, hands down, were the double IPA and the Belgian spiced ale.  The IPA was not too bitter, still had a solid hop crispness to it, and packed a ton of juicy flavor.  If you like IPAs that are not just a cyclone of bitterness and you live in Kansas City - that is your move right there.  The Belgian was strongly spiced, now I know that can rub some the wrong way, but its something I like.  It reminds me of the darker Belgian styles, something to really get you ready for the fall.

Casual Animal is new on the scene; having worked in a brewery I realize there are kinks to sort out, but they are starting out with strong promise.  They had a lot of variety, and its clear they have done well on a wide variety of styles.

Have you been there, had any favorites lately?

- Gremlin
- Full disclosure, I like all styles of beer though my favorites in no particular order are pale ales, Belgian style spiced beers (dubbels, trippels), sour beers, IPAs, German style lagers, hefeweizens, and creamy stouts.  So really I do like them all, though some are much better seasonally.

Recent Sale / Buy April and Other Developments, 2018

Doing What I Have Done Gremlin here to talk about two recent sales and a buy.  Sales you say?  I rarely sell stuff, but recently I sold two of my positions, the only two that do not generate a dividend.  That was the entire reason for selling.  These two stocks, Pengrowth Energy (PGH) and Willamette Valley Vineyards (WVVI) have been in my portfolio since about 2010.  It was a tough move to sell both, however it was decided that all hands should be on deck working for me.

PGH was sold at a big loss, though proceeds + dividends received + tax harvesting makes up for some of that - but not enough.  It was a dead weight in my portfolio, and every dollar that cash can earn back is appreciated.  It is at a point where waiting and watching continual failure was just not worth it.  WVVI, on the other hand, was sold for a very handsome profit.  I liked owning them, it felt cool.  I would like to own a vineyard or a brewery in real life, and I am sure one day I will get there.  However, at this point I want that cash onboard driving this FI ship faster and faster. So enough of this sad selling news, what did the proceeds buy?

BUY:
Today, I added a new position by purchasing shares of the Royal Bank of Canada (RY) in my taxable account.  I bought 15 shares, with a total cost of $1,154.72 ($76.52 / share, plus commission).  The current yield is 3.90%.  The P/E ratio for RY sits today at approximately 12.99, trailing.  The yield is slightly below the 5 year average of about 4.01%, and P/E is slightly above the average of the past 5 years (12.18).  RY has a trailing payout ratio of approximately 51%.  RY is a member of the Canadian Dividend All-Star list, with 7 years of growth.  They, along with the other major Canadian banks froze payouts during the 2008 Financial Crisis, only to resume them with two years.  RY has been paying dividends since 1870, and has never once missed a payment.  I am comfortable with the current and historical ratios, this is a solid stock and will serve me well for a long time.

RY, along with my other Canadian bank holdings of Bank of Nova Scotia (BNS), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CM) make up four out of the five big Canadian Banks.  I intend to add the other, Toronto Dominion (TD), too.  Their collective history and the regulations that bind them make them, as a whole, the juiciest banking group in the world to me.  Indeed, just look at their general Wiki entry if you don't believe me.  That history says it all - during the Great Depression no banks closed, during the 1980s only 2 closed.  By contrast, 9000+ banks failed during the Great Depression in the USA.  The USA has a banking industry that seems to waver between stable and made out of spaghetti; so for my investments in banking I favor the stability of the Great White North.

OTHER NEWS:
In other news I am aiming to start a secondary portfolio using M1 Finance.  M1 is a fee-free brokerage of sorts in the vein of old Loyal 3.  However, it allows access to the whole market and investments are triggered in a batch style when the necessary amount of funding is reached.  For a much better review of the site please read Retire Before Dad's take.

My goal with this account is to make a team of also-rans.  What I mean by this is choosing stocks that I routinely want to buy, but when the time comes I always pass over them for a better deal at the time.  So this will be a team of number 2s.  To that end I have titled the fund, The 2nd Bananas.  This is a tribute to an old article on the website Grantland, describing the best 'side kicks' of all time.

By the time this account is getting to where I want it to be it is likely fees will be introduced.  At that point I will close the account moving all the assets back into my standard brokerage.  So it goes, so it goes.

Finally, I will be doing some work travel in the next few weeks.  Hopefully I will be able to put up a brewery review, as its been a while since I have done that.

What do you think of RY and M1 finance?

I will update my portfolio page at the end of the month.

- Gremlin
- Long all stocks mentioned minus TD, PGH, and WVVI