When I review stock price and dividends each month, I also take the opportunity to look at a bit closer at some of the stocks I cover. These some of the stocks I looked at more closely.
Dividend Changes in my Portfolio
In the last updated of the stocks that I followed, I had 3 stocks I own increased their dividends and two stocks I owned decrease their dividends.
The stock Canadian National Railway (TSX-CNR, NYSE-CNI) increased their dividend to $1.50 from 1.25 which is a 20% increase. This stock is 5.71% of my portfolio. Metro Inc. (TSX-MRU, OTC-MTRAF) increased their dividend to $0.56 from $0.4668 which is also a 20% increase. This stock is 5.84% of my portfolio. Richelieu Hardware Ltd. (TSX-RCH, OTC-RHUHF) increased their dividend from $0.64 from $0.60, which is a 6.7% increase. This stock is 1.59% of my portfolio.
Mullen Group (TSX-MTL, OTC-MLLGF) cut their dividend to $0.96 from $1.20 which is a 20% drop. This stock is 0.42% of my portfolio. TransAlta Corp (TSX-TA, NSYE-TAC) also cut their dividends to $0.16 from $0.72, a 77.8% drop. They had also decreased the dividend in 2014. This stock is 0.28% of my portfolio.
However, the net result to my income is interesting. My total income dropped 0.16%, basically a wash. This is because the big drop in dividends of TransAlta. Prior to the change TransAlta dividend yield was around 14.6%. After the drop in dividends, the dividend yield was just 3.25%.
The other thing to point out is that my total income for 2016 (if there are no further dividend changes) is 0.25% higher than last year. This is because all dividend increases and decreases in dividends after January of the year will cause total income to change in the following year. I have never had a year when my total dividend income did not increase.
Bombardier Inc. (TSX-BBD.B, OTC-BDRBF)
This company is still going down. Demetris Afxentiou of Motley Fool gives a good breakdown of the problems facing this company. He says it is incredibly risky at present and he is probably right.
Some think that the company might do a reserve split. See an article by Allison Lampert of Reuters in the Financial Post. The company has already got funding from the Quebec Government. In this article by Josh Wingrove of Bloomberg News in the Financial Post he talks about the fact that Trudeau may want a change in the control structure of the company has the Bombardier family currently controls it through special shares. Apparently there is a G&M article about China wanting to buy at least some of the company. I do not have a subscription to the G&M and therefore cannot get the article.
Mullen Group (TSX-MTL, OTC:-MLLGF)
The drop in dividends in this stock was not unexpected. It is a company that services and oil and gas industry. There is a note about this in Canadian Business . They are being prudent.
TransAlta Corp (TSX-TA, NYSE-TAC)
Last month I noted that Matt Smith of Motley Fool suggests that they will cut the dividend.
On January 14, 2016 TransAlta Corp said that they are cutting the dividend. This dividend cut is almost 78%. The new dividend on an annualized basis represents a 15% to 20% payout of Comparable Free Cash Flow based on 2016 guidance and will provide TransAlta with incremental cash of approximately $150 million annually.
The dividend cut is disappointing, but it can hardly be a surprise. But some view this as a positive move. An article on Business Wire, said Fitch Ratings views TransAlta Corporation's (TransAlta) dividend reduction as a positive signal of management's commitment to deleveraging as the company faces unfavorable equity market conditions and energy price environment.
I have had this stock a long time. I have made a 5.57% total return on this stock since 1987. I have received a lot of dividends, but I also have a capital loss.
On my other blog I wrote yesterday about Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF)...learn more. Tomorrow, I will write about Canadian National Railway (TSX-CNR, NYSE-CNI)... learn more.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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