My first purchase for 2019. After my recent sale of Kirkland Lake Gold (KL.TO), my cash position has increased substantially and I decided that I could use some of those funds invested and reap dividends while I play the waiting game.
I was looking for a low-beta utility style investment for this iteration. My utility sector exposure was already high enough, so I decided to add to my Communication Services sector instead. I added to my BCE Inc (BCE.TO) position @ $55.50. The stock currently yields 5.4%, thus adding $151.00 to my annual dividend income.
The current valuation looks ok and doesn’t really indicate a screaming buy. But as we know, telco in Canada have a stranglehold on their customers, with minimal competition. Prices are expected to go up again this month padding shareholder’s pockets. This should result in incremental increase in revenue & earnings going forward — so, business as usual.
BCE Inc usually announces a dividend raise in February, and the last few raises have been an average of ~5%, so I look forward to seeing a nice little bump added with this purchase and the next raise.
I will also earmark 25 shares from this purchase for Baby R2R’s Nest Egg portfolio. This will diversify her portfolio from the current concentration in financials & basic materials sector.
Full Disclosure: Long KL.TO & BCE.TO. Our full list of holdings is available here.