Dividend-Paying Stocks Portfolio Adjustment

As I mentioned in the post Simple Steps To Select Dividend Stocks, not all our stock pickups are winners. To improve our portfolio’s performance, there is need to get rid of those that do not perform well. For us, the most critical event that affects our holding of company shares is reduction of dividends by the company.

Sold holdings

Dividend Portfolio

We sold all our position of 200 shares in Dream Office Real Estate Investment Trust (TSE:D.UN). Reduction of dividends was the main reason for the sale. The REIT reduced its dividends twice: in the beginning of 2016 and in June 2017. We can tolerate a share price drop because of Mr. Market, but reducing dividends is something more fundamental for us because we plan to live off passive income streams and cannot rely on such companies in our retirement.

We liquidated our position in Skyworks Solutions Inc (NASDAQ:SWKS).  We initiated the position in this company in the beginning of 2015 hoping that price appreciation and dividend hikes would be bigger than they have been. Considering the current low yield of 1.18%, we find other companies more attractive for investment.

We sold only two out of 26 companies’ shares due to their performance. This means that all others 24 companies in our portfolio satisfied us with their performance. Wow! That means that 92% of our holdings are doing great.

Increased holdings

Dividend Portfolio

We increased our holdings in the following seven companies we currently hold primarily to have enough shares for DRIP.

  1. Canadian Natural Resources Limited (TSE:CNQ)
  2. Suncor Energy Inc. (TSE:SU)
  3. TransCanada Corporation (TSE:TRP)
  4. Bank of Nova Scotia (NYSE:BNS)
  5. Magna International Inc. (TSE:MG)
  6. National Bank of Canada (TSE:NA)
  7. Wells Fargo & Co (NYSE:WFC)

New holdings

Dividend portfolio

This year, we migrated my wife’s RRSP from her Manulife account to her TD Waterhouse account, thus allowing us to manage her RRSP money. We chose all new positions because we think these companies’ fundamentals are strong and we want to diversify our portfolio to have holdings in different industries. Our principles of stock analysis are described here.

We initiated new positions in the following companies:

  1. AT & T Inc (NYSE:T) 120 shares.
  2. Canadian National Railway Company (TSE:CNR) 100 shares. This position is in a new sector for us: Services — Railroad.
  3. Domino’s Pizza, Inc. (NYSE:DPZ) 50 shares. This position is in a new sector for us:  Services — Restaurants.
  4. Amgen, Inc.(NASDAQ:AMGN) 30 shares. This position is in a new sector for us: Healthcare.
  5. Canadian Imperial Bank of Commerce (TSE:CM) 55 shares.
Andeavor (NYSE:ANDV) is also in the portfolio due to the initial holding of Western Refining, Inc. (NYSE:WNR) which was acquired by Andeavor.

Conclusion

Our expectations when we buy company shares is that the company will be able to sustainably increase its dividends. When the initial dividend is high, we expect that the company will not reduce dividends. The aim of our current portfolio adjustment is to hold only those companies in our portfolio that either increase their dividends or keep relatively high-yield dividends unchanged. After making these changes, our dividend-paying companies’ portfolio is detailed here. This year, we are glad adding new positions in Railroads, Restaurants, and Healthcare, thus diversifying our portfolio.

Dear reader, what do you find promising that you are holding in your portfolio?

 

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