Recent Stock Purchase – October 2014

Finding relative bargains in the stock market used to be a real challenge in months past as nearly every stock and asset class was deemed overvalued by historical measures. Sure, certain sectors presented better values than others as financial stocks, including many bank and insurance stocks, presented relative bargains. Even some energy names popped up as dividend income investors sought out relatively high yields and low PE names. However, with the recent market turmoil it seems that bargains are being found in other sectors as well. Names such as DE and MAT have become quite popular along with UTX as many dividend bloggers have been adding or initiating positions in those companies, industries and sectors. The real standouts have been the names in the energy sector as oil and other commodities seem to be falling into the abyss. Names that are falling along with them include, BP, TOT, XOM, CVX, SDRL, ESV and of course many more.

 

In my October Stock Considerations post I started looking at a few closed end funds that were primarily focused on stable public utilities in the oil and gas sector, as well as electric, water and telecom industries. While all invested in boring stable sectors, their yield offering was quite juicy as DNP Select Income Fund Inc. (DNP) offered a 6.2% yield and Reaves Utility Income Fund (UTG) offered a 6.3% yield to start. While not traditional dividend growers you were being offered a great starting yield which could potentially juice initial returns.

 

Of course, Mr. Market also has a way of goading your investment decision process by giving you opportunities to average down on newly initiated stock positions in your portfolio. Such was the case this month as several of my new holdings all incurred losses of about 8% in one month and as a result I have opted to average down those positions instead of initiating new ones.

 

Sticking to my October stock considerations list:

 

I have added to my ROTH account 16.4711 shares at $48.33 for a total investment of $800.00 in The Toronto-Dominion Bank (TD).

 

I have added to my ROTH account 13.0442 shares at $61.33 for a total investment of $800.00 in The Bank of Nova Scotia (BNS).

 

What do you think about my recent stock purchases? Please let me know below.

 

Dosclosure: Long TD, BNS

49 thoughts on “Recent Stock Purchase – October 2014

  1. Great time to average down on some companies now, as the market has been swinging wildly of late. I’m loving the opportunity that is being presented and will hopefully make a larger purchase soon when it I get the chance. I’ll continue to make some investments in the meantime, such as with my XOM holding. I’m really hoping for some more dips this coming week! Again, good buys in my opinion with you averaging down.
    Special Agent Dividend recently posted…Weekly Dividend Investment ActivityMy Profile

    • Hi SAD,

      Sometimes you get what you wish for as every dividend blogger has been asking for a market swoon in order to initiate or average down existing positions. I think this is a great time to average down any solid dividend paying company in your portfolio rather than initiate new positions. Good luck with XOM and thank you for commenting.

    • Hi FFd,

      Always nice to hear when others are buying the same stock as well. I am still loving the large Canadian banks very much especially since their recent dip occurred. While I also like BMO and CM I feel it’s better to average down my current positions before thinking of adding more financial sector exposure. Thank you for stopping by and commenting.

    • Hi IS,

      The energy sector has seen to most fallout from the recent declines especially many of the oil drillers. I have yet to add any energy names to my portfolio but clearly many of the names in the space are looking a lot more attractive than they have ever been in the last couple of years. The yields on may of the oil drillers look especially enticing too. Thanks for sharing your take.

    • Hi R2R,

      Glad you think my buys were great. Talk to any dividend blogger and I think you’ll get a positive assessment about all the large Canadian banks. While I’d like to add BMO and CM as well my focus these days is to get my positions back into the black. Thanks for your comment.

    • Hi dm,

      The large Canadian banks seem to have been quite popular for many years. I’m upset at myself for not jumping on that bandwagon earlier. In any case, the financial and energy sector seem to present the best values overall. As you know from my previous posts I also have been adding to my AFL, WFC and CB positions as well. I agree that a lot more pain may come down the pipe and even better buying opportunities may present themselves which is why I still have cash on the sidelines just in case a major event happens. Thanks for stopping by and commenting.

    • Hi w2r,

      Two words, “energy” and “financial.” I think these two sectors present the best values overall in the market today. Sure some industrial names are looking better and other stocks such as MAT or MCD but as a whole the financial and energy sector has the most variety of value names out there. If commodity prices keep falling the energy sector will look even more enticing especially some of the big name drillers. I’m always looking to expand my portfolio but when an opportunity comes along to average down I take it. Thanks for commenting.

      • DivHut,
        After today’s market sell off (again) I can’t help but be tempted to buy more into energy. I already own the big names but I think adding to the sector will help long term investors. The market is saying “buy” but I wonder if it is screaming “buy.”

        • Hi DR,

          While I am a firm believer in the energy and financial sectors, even before the market sell off of recent weeks, I would still tread carefully as downward pressure is still very strong on the commodities, especially oil. There is a supply glut on the market and with a stronger dollar we may see even better pricing for many energy names. If you must buy do it in increments this way you’ll have a stash of cash should prices fall even further. Let’s keep an eye on things. Thanks for commenting.

    • Hi DW,

      I have yet to hear anyone, Canadian or otherwise, say a bad thing about the large Canadian banks. Some dividend bloggers hold all five banks in their portfolios as their commitment to the sector is unwavering. For now, with my three Canadian banks and WFC I feel I have enough financial sector exposure but if I don’t have any stocks to average down and the valuations are fair I might even add BMO and CM to my portfolio. Thank you for commenting.

    • Hi Seraph,

      This is what we have been asking for. Many months have gone by and various dividend bloggers have all been wishing for better price points and valuations to appear in the market. The commodity sell off may still continue and you know the energy names will get dragged down even further. In my short tenure holding Canadian banks I can say that I plan to make them all long term holdings in my portfolio. I plan to average down each position as long as Mr. Market lets me. Thanks for stopping by and commenting.

    • Hi DD,

      Thank you for the kind words. I’m still building up my ROTH as I have started that account much later than my regular taxable account which is why it is much smaller. I also added the Canadian banks to my ROTH as there is no foreign tax withheld for Americans who hold Canadian companies in retirement accounts.

  2. Hi DivHut,
    Those are great buys! I like how you split your capital into BNS and TD. I like them a lot and planning to add them to my portfolio, my personal choice will be RY and TD but would love to add BNS to the mix. I have been adding to my XOM purchase, CVX looks attractive as well. I will be posting a recent buy in the next few days.
    Take care,
    FFF

    • Hi FtFF,

      Thanks for sharing your purchases with us. XOM, CVX, BP, TOT and drillers like ESV and SDRL are just a few of the names that fallen back to Earth recently. I can understand the reasoning behind wanting to add or initiate positions in the energy sector. The fall in oil prices along with a strong dollar could have us seeing much better buying opportunities going forward. For now my intention is to average down any position I see in the red unless some amazing opportunity presents itself. I generally am very, very slow adding new positions to my portfolio. Thank you for commenting.

  3. DivHut,

    Nice buys. I like both of those banks, as they’re the only two Canadian banks I’m personally invested in. I like their diversification (TD in US and BNS in Latin America and abroad) and they are well-capitalized. Their dividend histories are exemplary. Not much to complain about there. 🙂

    Best regards.
    Dividend Mantra recently posted…Recent BuyMy Profile

    • Hi DM,

      Given the option to average down or initiate a new position I almost always choose to average down as was the case this month. As you mention in your comment these Canadian banks have great international exposure, are well-capitalized and have very friendly dividend histories. My only regret is that I did not invest in these banks years ago. Oh well, can’t complain about my overall portfolio performance and better late than never. I can honestly say that it is because of our online community that has enabled me to expand my dividend seeking abilities. Thanks for commenting.

    • Hi LAH,

      I really like the large Canadian banks a lot and though they are still near their all time highs I think they can weather a potential pop in the Canadian real estate market. There is no question a real estate mania has gripped many parts of Canada and I do expect a fall but not as severe as was in the U.S. Sure, there may be some pain and much lower share price for the banks but I do not think we’ll see anything close to what happened in the U.S. The large Canadian banks (TD, BNS, RY, BMO, CM) are all very well capitalized and the Canadian government has back stops in place to prevent a total meltdown like what happened in the U.S. Thank you for stopping by and commenting.

    • Hi DD,

      There is no question about the solid footing of the large Canadian banks. Many have great international exposure, are well capitalized and have extensive dividend histories. In fact, I wrote a blog post a while back about the Canadian banks and their long history of dividend payments Canadian Century Club Dividend Stocks. I plan to make the large Canadian banks a long term core holding of my ROTH. Thanks for stopping by and commenting.

    • Hi OBFW,

      I think the large Canadian banks belong in any dividend growth portfolio. Each of the five large banks held up very nicely during the economic meltdown that occurred in 2008/9. While not raising dividends each maintained their current payout through the crisis and are governed by stricter regulations than the American banks. Thanks for stopping by and commenting.

    • Hi Tawcan,

      Thanks for vote of confidence with my recent stock picks. I haven’t heard/read one bad word about any of the large Canadian banks. I plan to keep them as a long term core holding. Thanks for stopping by.

  4. Great purchases! I’m likely adding to my TD position this week. I’m trying to put a little money in other sectors besides energy for a while.
    I’ve looked at MAT. They have a nice 5% yield but kids keep going with technology toys like Ipad’s. Their frozen line should do well for the next two years before HAS has the rights. They just need to come up with a new source of revenue.

    Cheers
    Brent @ AAI recently posted…New Purchases – 10/06/14My Profile

    • Hi AAI,

      Thanks for sharing your thoughts about where you’re likely to put new cash to work. I too am not a fan of MAT even though the yield is getting quite high. From my posts in the past you can see I am very much into the financial sector stocks as I was very light in that sector for a while. Thanks for commenting and look forward to seeing where you plan to deploy your new cash.

  5. Nice buys. Good opportunity to take advantage of the recent price weakness.

    As I believe I mentioned before, TD and BNS are my favourite two of the big Canadian Banks. Between my brother (Rick) and myself, we own four of the Big Five (excluding only BMO).

    TD has a solid U.S. franchise which they’re finally really leveraging to earn the business of the snowbirds (people who travel South in the Winter). BNS has growth potential in emerging economies which could wind up being very good if the world continues growing. I’m optimistic about the future for TD and BNS.

    Sadly, TD’s Ed Clark is moving on – he’s been a great leader for the company over many years. That said, I’m confident they’ll establish the proper leadership going forward.

    Thanks for posting,
    – Ryan from GRB
    Get Rich Brothers recently posted…Trade Less and Make MoreMy Profile

    • Hi GRB,

      The large Canadian banks seem to be loved by every dividend blogger I read. While there may be some differences as to which is the “best” bank it seems that it’s a safe investment going with any or all of TD, BNS, RY, BMO and CM. I feel very comfortable owning these banks for decades to come. Thanks for stopping by and commenting and look forward to your updates as well.

  6. Hi Keith,

    Great buy here.

    I love Canadian banks too and used to have many NA shares back in the days but I sold them in 2008 just before the crash. I will eventually add TD to my TFSA account for sure and probably RY too. So many stocks… not enough capital…

    With the recent dip there are so many stocks to consider buying compared to recent months. I would have loved to average down on JNJ, AFL, ARCP, MCD to name a few… My portfolio took a solid drop too. I was planning on initiating a new position on a wide moat dividend aristocrat with high growth potential (more than 8% dividend growth per year) from the list I recently published but I decided to add to my Exxon holding instead (which is also part of that select list).

    I really should have kept more money aside to take advantage of such a dip. With only a 1000$ to invest this month and I’m expecting medical bills in november… I guess that will be my only buy for a while.

    We’ll see 🙂

    Keep investing my friend!
    Allan recently posted…Recent buy XOM and My first huge investment mistake!My Profile

    • Hi Allan,

      Given the choice to average down or initiate a new position I almost always choose to average down which is what I did by adding to my Canadian banks. Of course, with the recent market turmoil many stocks are starting to look attractive once again. This is why it’s always important to have some cash sitting on the sidelines. The amount is subject to question but something nonetheless should always be on the side for opportunities to buy like the one we are seeing now. Thank you for commenting.

    • Hi DFG,

      They are definitely worth considering and ask any of the Canadian bloggers and you’ll only receive positive responses regarding the large Canadian banks. Thanks for stopping by.

  7. I’m not familiar with any of the companies you mentioned above I will have to dig more into them. It almost never fails when I make a purchase there is a decent drop, usually nothing related to the specific company and more so external factors, I usually average down as well. Not many people talk about doing that, especially in the “investing blog” world because people want to give the impression they know exactly when to buy. Not true (at least in my case), but you don’t have to know to make informed investments that do well over the long term.

    Derrick
    Derrick recently posted…What Are The Best Dividend Investments Today?My Profile

    • Hi Derrick,

      I will freely admit when I plan to average down on any of the stocks that I own in my portfolio. As you know, no one can ever buy a stock at its absolute low price just like no one can ever sell a stock at its absolute high. I strive to be completely transparent with my portfolio and stock purchases and freely acknowledge when I do average down. I think many of the dividend bloggers do the same as well. Thank you for stopping by and commenting.

  8. DH,

    As a BNS shareholder I say welcome to the group! It can be a little discouraging to see the Canadian taxes removed from the dividends, but both your choices are great long-term plays. In fact, when I purchased BNS, I had funds for only one stock and it was between BNS and TD. The latter still remains on my watch list.

    DWC

    • Hi DwC,

      It’s my understanding that Canadian taxes are not withheld from dividend distributions that are from stocks in retirement accounts such as a ROTH or IRA. In any case, I’m happy to be a fellow shareholder with you in BNS. I have been very fond of the large Canadian banks and still have BMO and CM on my watch list. Thank you for stopping by and commenting.

        • Hi DwC,

          That’s why we are here. Between myself and the entire dividend investing community there is a lot of knowledge that can be gained. I never claim to know everything but over time, as you said, you do learn new things every day. You may want to read this SA article: http://seekingalpha.com/article/248039-withholding-tax-rates-by-country-for-foreign-stock-dividends Here is a quote from the page, “Canada charges a 15% tax on dividends held in non-taxable accounts. But due to a policy change in 2009, dividends and interest income are exempt from this 15% tax if the investments are held in IRA or 401(K) accounts. So U.S. investors can hold Canadian banks such as bank of Nova Scotia (NYSE:BNS), Royal Bank of Canada (NYSE:RY) or other dividend-paying stocks like Enbridge (NYSE:ENB) in their IRAs for the long-term without worrying about taxes on dividends.”

  9. I am really digging oil companies right now such as XOM, CVX, COP after the decrease in price of crude oil. I think at the end of the day oil will still be a commodity in high demand since it runs our country.
    youngdiv recently posted…Recent buy: CVXMy Profile

    • Hi youngdiv,

      There’s no question that oil will continue to be in demand all over the world for decades to come. Sure, green technology will reduce our reliance on oil but that is well into the future. With the recent pullback in oil and many other commodities too, oil majors and drillers have seen great share price decline and recent yields jump. Look at ESV and SDRL too as high yielding stocks in recent weeks. But, I have to agree the word of the day is definitely oil. Even foreign majors broke down big time such as BP and TOT. Thank you for stopping by and commenting.

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