2013 has finally come to an end and what a fantastic year for stocks! The DJIA and S&P 500 gained 28% and 31% respectively for the year. Where stocks will go from here is anybody’s guess. Rise or fall, I will be staying invested while maintain some cash position in my portfolio. If there is a correction, it will provide me with an opportunity to pick up more stocks at a discount.
Provided the right conditions, I intend to add to my positions in Archer Daniels Midland (ADM), Qualcomm (QCOM) or Realty Income Corp (O).
Archer Daniels Midland (ADM) manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol and other value-added food and feed ingredients; and processes oil-seeds, corn, wheat, cocoa and other agricultural commodities. ADM also engages in futures commission merchant business. ADM is is a dividend champion which has been raising dividends for 38 years. ADM has a 5-yr dividend growth rate (DGR) of 8.8% and a 10-yr DGR of 12.3%.
Qualcomm (QCOM) designs, develops, manufactures and markets digital communications products and services base don CDMA, OFDMA and other technologies. QCOM is the leader in ARM-based processors which are found in the bulk of Windows, BlackBerry and Android devices. QCOM has been raising dividends for 11 years and has a 5-yr DGR of 12.3%.
Realty Income (O) is a REIT that invests in commercial real estate across the US. O has long-term (10-20 year) leases with tenants that are spread across 200 companies and 47 industries. O has been raising dividends for 19 years; has a 5-yr DGR of 1.5% and 10-yr DGR of 4.2%.
Every month, I add to my positions in the following stock and funds:
- The Bank of Nova Scotia (BNS) is the third largest of the Canadian banks by deposits and market cap. BNS is also the most international of the Canadian banks with exposure in 55 countries outside Canada. BNS saw a pause in its dividend growth from 2008-2010. However, BNS has started raising dividends after the crisis with a 5-yr DGR of 4.53%. I have a DRIP plan in BNS and invest monthly to this holding.
- Claymore S&P US Dividend Growers ETF (CUD) is an ETF of 83 dividend growers and provides me with exposure to excellent corporations across all sectors. The ETF has a 1.8% yield and pays distributions monthly.
- iShares Canadian Financial Monthly Income Fund (FIE.A) is an ETF of 24 Canadian financial equities. The fund yields 7% and pays distributions monthly.
- CI Signature High Income Fund (mutual fund) is a globally diversified fund with a mix of stocks and bonds. The fund yields 6% and pays distribution monthly.
- CI Global Health Sciences Fund (mutual fund) is a globally diversified fund in the healthcare sector. The fund yields 1.1% and pays distributions annually.
- Scotia Canadian Balanced Fund (mutual fund) is an index fund tracking the Canadian S&P/TSX Composite Index and the DEX Universe Bond Index. The fund yields 0.52% and pays distributions quarterly.
I am also considering various stocks that are not currently in my portfolio.
Illinois Tool Works (ITW) and Parker-Hannifin Corp (PH) are a play on the industrial sector. I am currently under-invested in the industrial sector and am looking for more exposure on that front. ITW and PH are both dividend champions who have been raising dividends for 39 and 57 years respectively. ITW has a 5-yr DGR of 9.9% and a 10-yr DGR of 12.6%. PH has a 5-yr DGR of 16.2% and 10-yr DGR of 12.9%.HCP Inc. (HCP) invests in properties serving the healthcare industry including sectors such as senior housing, life sciences, medical offices, hospitals and skilled nursing. HCP is a dividend champion that has raised dividends for 28 years; has a 5-yr DGR of 2.4% and a 10-yr DGR of 2.1%.
Kinder Morgan Inc. (KMI) owns and operates energy transportation and storage assets in US and Canada. KMI is the fourth largest energy company in N.America. The company owns an interest in or operates approximately 75,000 miles of pipelines and 180 terminals. KMI has a reputation for its high payouts and has a 5-yr DGR of 10%.Procter & Gamble (PG) and Unilever PLC (UL) are giants in the consumer packaged goods field. PG has five segments – beauty, grooming, healthcare, fabric care and home care. UL has four segments – personal care, foods, refreshment and home care. PG has been raising dividends for 57 years; has a 5-yr DGR of 10.2% and a 10-yr DGR of 10.8%. UL has been raising dividends for 25 years; has a 5-yr 7.07%.
Rogers Communications Inc (RCI.B) and Telus Corp (T) are both Canadian communication providers and together with BCE Inc (BCE) form the Big-3 in Canada’s wireless sector. The Big-3 together control 91% of the wireless market and provide excellent combination of growth and income opportunities. Rogers has been growing dividends for 7 years and has a 5-yr DGR of 11.74%. Telus has been growing dividends for 8 years and has a 5-yr DGR of 9.08%.
Walgreen Co (WAG) operates drugstores in the US. The company provides access to consumer goods and services, pharmacy, health and wellness services across the US. WAG is a dividend champion that has been raising dividends for 38 years. WAG has a 5-yr DGR of 23.7% and a 10-yr DGR of 21.2%.
Textainer Group Holdings (TGH) engages in purchase, ownership, management, leasing and resale of a fleet of marine cargo containers worldwide. TGH was recently downgraded from Outperform to Market Perform, but there is still plenty of potential for an upside. TGH is a Dividend Challenger that has been raising dividends for 7 years and has a 5-yr DGR of 52.1%.
Index – China ETF
I am also considering adding a new index fund to my portfolio to track the Chinese market/economy. Read about my comparison of available ETFs here
What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist?
Disclosure: My full list of holdings are available here