Recent Stock Purchase II – May 2015

With the month of May rapidly moving along and the market continuing to march ever higher, the same old value song begins to resonate in my head about where I’d like to allocate fresh funds in my long term portfolios. Believe me, I would love to add to many consumer staples or industrial names that are already in my portfolio but I’m not willing to pay the sky high valuations that many of them are sporting. That being said, I tend to follow pretty closely my beginning of the month stock considerations list and in May I had mentioned how I am liking the big three health REITs, HCP, HCN and VTR, to which I added to last week, as well as considering JNJ, EMR and CAT additions. Of course, my old standbys for the last ten months or so have been the large Canadian banks with BNS topping my consideration list. With that being said let’s review my recent buy.

 

I have added to my ROTH account 15.077 shares at $53.06 for a total investment of $800 in The Bank of Nova Scotia (BNS). With this recent purchase my ROTH account holdings in BNS now totals 115.1380 shares for a value of $6,144.92.

 

The reality is that in today’s market, even with many great stocks near all time highs, or at the very least, trading at higher than average valuations, there are still buying opportunities that can be found. What I always find amazing while reading the other dividend blogs is that there is no shortage of investment ideas or theses. In other words, a good long term investment can be found during any market condition. The bottom line is that a dividend growth investor must contiunally add to their portfolios to build that ever increasing passive income stream during all market conditions. I can understand the fear that accompies a potential investment with the market at a seeming top but as long as every company I invest in continues to pay out a dividend, and even better, a rising dividend I’ll be happy. With my long term portfolios I am more interested in a growing dividend income stream rather than capital appreciation. If my portfolio value was halved overnight I would continue to invest as I always have while continuing to collect my dividend income.

 

What do you think about my recent buy? Are you looking at any of the large Canadian banks as well? Please let me know below.

 

Disclosure: Long HCP, HCN, VTR, JNJ, EMR, CAT, BNS

30 thoughts on “Recent Stock Purchase II – May 2015

    • Hi R2R,

      The Canadian banks are still high on my new buy list even though REITs have tumbled a bit and many energy plays still offer attractive yields and valuations. Of course, as you mentioned a current yield in the 4% range doesn’t hurt either. Thank you for stopping by and commenting.

    • Hi Tawcan,

      You and me both. The Canadian banks continue to offer a great value and current yield as well. I plan to keep TD, BNS and RY for many, many more years. Thank you for commenting.

  1. I have to still roll over my 401K. When I do, Canadian banks are going to first on my list. This market is going higher everyday and while valuations are somewhat out of hand in a lot of quality companies, we cannot just stand on the sidelines. This is how we all help each other out, by finding those nicely valued stocks that deserve our attention, if not our capital. Thanks for sharing.

    – HMB
    HMB recently posted…Another BuyMy Profile

    • Hi HMB,

      I fully agree with you that staying on the sidelines cannot be an option. Sure, many companies are very expensive from a valuation perspective but as you are aware there are always some decent buys to be found. I still think the large Canadian banks present a pretty good deal based on their valuations and relatively high current yield which should take the sting out of any near term price decline. As always I appreciate you stopping by.

    • Hi FV,

      After one of the greatest financial meltdowns in recent history I can fully understand your hesitance with any bank. However, any risk is tempered with diversification and in that respect I feel very confident with my four banks, TD, BNS, RY and WFC. None of the large Canadian banks reduced or eliminated dividends during that turbulent time which is a testament to their resilience. They also have been paying dividends for well over one hundred years without stopping. In all, my financial sector holdings will always be my third or fourth largest among all my portfolios as I prefer to be heavier in consumer staples and industrial names instead. Thank you for sharing your thoughts.

    • Hi PIM,

      While it’s true that the banks did come back quite nicely, coincidentally with the price of oil over the last couple of months, they still do offer a compelling reason to buy with moderate to low valuations as well as relatively high current yields. Thank you for stopping by and commenting.

  2. I like the buy DivHut. Really like BNS here as I believe it’s best value right now amongst the big 5. TD and RY is definitely worth our dollars as well. We might get a bit of a pullback soon so we’ll see. In the meantime, plug away and slow and steady will win this. Thank you for sharing and always a pleasure coming here. Cheers bud.
    Dividend Hustler recently posted…Buys – May 18 2015My Profile

    • Hi DH,

      The Canadian banks have been on my buy list for about ten months with little reason for me to stop. I have pulled back on the throttle though as they have all climbed back pretty nicely from recent lows of about two months ago. As you stated, ‘slow and steady’ is my aim adding to my portfolio bit by bit and watching those dividends compound. Thank you for sharing your thoughts.

  3. The 200 days moving average on Bank ETF is calling for a pop. I’m in financial stocks now because of evaluation. It’s one of the few sector left that have P/E between 9-12. Of course there is a currency war going on, so we don’t know how FED react. They might decide to hold off increasing rate until next March, and bank stocks will drop 10%? 😛

    • Hi vivianne,

      There is so much chatter about the Fed and when interest rates will rise that quite frankly for the long term it really doesn’t matter. Stocks have performed well, over time, in all interest rate environments and most moves in the near term are always knee jerk reactions. Sure, if rates don’t change the banks might take a little tumble, just like when there is a hint of a rate rise the REITs all fall. The bottom line is that if you can buy into a decent valued stock that also offers a solid dividend and great current yield then go for it. Money on the sideline doesn’t do anyone much good. Thank you for commenting.

    • Hi MSF,

      Happy to be a fellow BNS shareholder with you. I put all three of my Canadian banks in my ROTH account because of the withholding tax issue. Why not take advantage of any tax break, including not having withholding taxes, if you can. It’s the reason I put my REITs in my IRA account as well because of the way REIT dividends are taxed. The Canadian banks are still on my mind for future buys though I would really love to add to other names and sectors too. Thank you for stopping by and commenting.

  4. Hi DH,

    To me TD looks like a steal right now. I might pick it up mid June-early July when my capital is replenished. I’ve been reading a lot about Canadian banking institution and trying to familiarize myself with canadian banking laws. Maybe they’ll crash between now and july when the second oil crisis gets underway. One can only hope…

    • Hi TBDI,

      The large Canadian banks have been an interesting play ever since the oil bust occurred last year. There’s no doubt that the drop in oil prices influenced the Canadian banking sector and offered us a great buying opportunity with low valuations and relative high current yield. If another oil bust comes our way I’ll be ready to add to my TD, BNS and RY if need be. Thank you for your comment.

    • Hi B,

      My cash is ‘seemingly unlimited’ but in reality it’s not. It would be nice though. I might be making more purchases but if you notice they are in smaller dollar amounts. My commission is only $2 a trade which allows me to make these more frequent smaller buys. As always, I ignore the headlines and current market noise. As you know we are buying into businesses and not into stocks. As long as the underlying business is solid and continues to grow I’ll continue to make investments. Thank you for stopping by and commenting.

    • Hi DD,

      Happy to hear that BNS has worked out for you. Of course, these buys should be measured in decades and not in the span of months. I plan to make all three of my Canadian bank holdings very, very long term. In other words, at least ten to twenty years out. I’m still keeping an eye on BNS among my new health REIT buys as well. As always, I appreciate your comment.

  5. DivHut,

    I really like those Canadian banks, any move on them is a good idea. I wish they were on Loyal3, I’d be adding them all the time. Also its not like just 1 of them is the best, all of the big 5 are excellent decisions. Enjoy that added income.

    -Gremlin

    • Hi DG,

      I totally agree with you that any of the big five Canadian banks have their own merits and each can be considered a solid long term buy. I know they have fallen out of favor a bit in recent weeks as oil climbed back up and the Canadian bank stocks also rallied alongside but I still think they offer a good value along with a great current yield. Plus, this recent buy allowed me to average down my buy price a bit. Thank you for sharing your thoughts.

    • Hi DG,

      The reality is that I do like all the large Canadian banks but I had to draw the line somewhere in terms of my investment dollars. I have decided to focus just on BNS, TD and RY for now even though NA or other large Canadian banks such as BMO and CM do look interesting to me as well. Even with the recent run up among the large Canadian banks I feel they still offer a good value and great current yield especially in this market. Thank you for stopping by and commenting.

  6. Hey there DivHut,

    What a great purchase in BNS! It’ll be paying us in dividends for decades to come.
    Everything you wrote in your last paragraph about not attempting to time the market, being mostly concerned with a growing stream of dividend income which you can just juice back into the stock market at a discount resonates 100% with me; especially as things are at all time highs, but as they say: time in the market is better than timing the market.

    Have a fantastic day,
    Dividend Beginner

    • Hi DB,

      It’s so important to stay invested in all market conditions. I know there are many who are waiting on the sidelines with cash just itching to jump in the market after that inevitable crash/correction. I can understand the logic behind that thinking, especially when a market is at all time highs but as you know our real concern is dividend income from a stable and solid company which will pay us no matter where the market is nor where an individual stock price is. I’m still loving the Canadian banks even at these levels 🙂 Thank you for stopping by and commenting.

  7. With BNS having a dividend history going back to the 1830s and TD having one going back to the 1850s, there’s a lot to like with the Canadian banks. Too bad I never got around to buying either of them. There was always a “better purchase” when the time came to buy, and I rarely have fresh capital to invest.

    Sincerely,
    ARB–Angry Retail Banker
    ARB recently posted…At What Point Do You Need To Call The Police?My Profile

    • Hi ARB,

      Ever since I learned about the large Canadian banks I have been very interested in them and have been buying them almost every month for the last ten months. Not only does BNS and TD have a dividend payment history going back well over 100 years, so does RY, BMO and CM. It’s amazing that during the financial crisis none of the large Canadian banks reduced their dividends while many U.S. banks drastically cut or eliminated distributions altogether. I still think that from a value perspective and high current yield that’s offered the Canadian banks are that “better purchase” especially when so many other high quality names are trading at very expensive valuations. Thank you for stopping by and commenting.

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