Choppy accumulation of Manulife $MFC

In terms of capital appreciation Manulife Financial has done poorly over the years, but it has been left as an integral part of my 50K Dividend goal.

A small 10 share position at $23.69 was initiated September 23, 2009. However, MFC slid further and 100 more shares were added at $18.84 on December 15, 2009. Taking the year's average price to $19.4618.

Over the years more shares were added at varying prices via direct share purchases and Dividend Reinvestment.

Average Price at Year-End:

2009: $19.4618

2010: $17.0131

2011: $15.9463

2012: $15.9209

2013: $15.9337

2014: $17.9087

2015: $19.9372

2016 (as of October): $19.2009

2015 signalled the high point of my MFC position when the June 26, 2015 DRIP acquired 3 shares @ $23.68. It took under five and a half years for MFC to round trip back to what I paid in the 2009. 

After that peak MFC retreated significantly. It slid back as the oil oversupply crisis was starting to intensify and talk of MFC's oil related portfolio caused great uncertainty in the stock. This prompted me to acquire more shares @ $20.50 in September and then again @ $21.80 in November.

The oil crisis deepened in the start of 2016 and MFC slid alongside. This was my chance to add MFC to my 1K Club and take the risk of averaging down then wait for a recovery of the share price and reduce my exposure. The risk of course being that MFC continues lower and my position could grow to large in relation to my other holdings.

Buy	2016-03-29	10	18.86
Buy	2016-05-10	280	18.56
Buy	2016-05-13	290	18.04
Sell	2016-05-27	250	19.48
Buy	2016-06-03	200	19.04
Buy	2016-06-10	200	18.04
Sell	2016-10-11	300	19.37

The markets got a little iffy on May 10, but the price was good to load up my position to 1360 shares bringing MFC to the 1K club with a $1,006.40 yearly dividend.

The stock declined further prompting me to add even more shares on May 13. Fortunately, by end of month the price rebounded giving an opportunity to reduce my position at a small profit. Average price: $19.3756.

Markets remained choppy and again within a short period of time I overloaded my position by adding shares twice at lower prices. A few uncomfortable months later on October 11 with interest rate hike speculation increasing MFC rose again allowing me to pare back. Average price: $19.2009. Yield: 3.8539%.

The year isn't over yet and there will likely be more opportunities to average down my long position.

DRIP Report (On Hold)

Since approximately April/May 2016 the majority of DRIPs in my primary portfolio were ceased. I was starting to get close to buy a property and needed the cashflow. While the property deal did not go through it has been uncertain whether another opportunity would open up. As such DRIP Report is on hold.

Certain DRIPs will remain such as those in my secondary portfolio and the Registered accounts TFSA/RRSP.

Currently:

CAR.UN 2% DRIP discount makes this worthwhile. Although rate hike fears and Canadian mortgage changes adds some uncertainty to it and similar REITs.

GWO letting it ride. Eventually, I add it to the 1K club via Secured Put or straight equity buy.

ENB.PR.T deep underwater on this one. I'll keep adding it to average down, income, and eventually in the unknown future it may be redeemed by Enbridge.

BCE.PR.H deep underwater on this one. Same reasons as above, but a rate increase could benefit the Prime Rate.

YRI on DRIP, but barely makes enough to purchase a share.

G on DRIP, but doesn't make enough to purchase a share.

AP.UN on DRIP, but does not make enough to purchase a share.

IIP.UN 4% DRIP discount makes this worthwhile. Same issue with rate hike fears and Canadian mortgage changes.

BBD.PR.B deep underwater. Same reasons as BCE.PR.H.

FIE letting it ride.

DIV 3% DRIP discount, but my secondary portfolio is within a brokerage that does not provide the discount. Deep underwater.

GRC a write off at this point. Continuing the DRIP to average down.

AXY new addition.

TWM new addition.

MTL new addition. doesn't make enough to purchase a share.

HSE Dividend continues to be suspended.

Club 1,000 - Concentrating Positions For More Dividends

Originally written: May 11, 2016.
Posting as is: October 9, 2016

Diversification is great to a certain extent. For a regular investor like myself holding maybe 20 or so stocks is more than enough to keep track. Over time adding little positions here and there makes the 20 grow into ever more positions and this becomes harder to track and manage. As well, commissions start to not make sense as they accumulate on almost inconsequential additions.

I decided to work on concentrating my portfolio through reducing the number positions. One of the reasons why I temporarily dropped INN.UN a few weeks ago and regretted it when a takeover was announced. Regardless, another other way to prevent further widening of the portfolio is to divert resources concentrate existing positions and gain greater dividends from them.

With this in mind I looked at my current non-registered account positions and noticed a few holdings that give me less than $100 per year. The bulk of holdings range between $200 and $700, which are along their way to becoming larger holdings. Then I've got my handful of $900 to +$1,000's, with the $900's within 30-50 shares away from tipping into the $1,000 mark.

Effectively, I now have four stocks in Club 1,000. Until May 10th, I only had 2 full unencumbered holding within Club 1,000: Bank of Nova Scotia and Bank of Montreal. Manulife Financial has been underwater for some time so I took the opportunity to increase my holdings and bump up the dividend returns. I also have Covered Call options on Sunlife Financial expiring in July, which at current price would have dropped my dividends below the $1,000 threshold. Today May 11th, I decided to purchase more shares of Sunlife Financial to firmly place this holding's dividends above $1,000.

The next largest dividend payer is Enbridge Preferred Shares Series R, giving me $978.00, but the dividend and share price upside potential are both currently limited. Within 2 years the preferred share's rate will reset based on the Government of Canada (GoC) 5 year rate +2.50%. If the yield of the GoC remains low then the existing payout may change and drop the holding outside of Club 1,000. Ex-dividend is May 15 (yippie!) with payment on June 1st. At current price of $15.61 and total quarterly pay out of $244.50; the Questrade Dividend Reinvestment could comfortably add another 15 shares. Calculating further, with the current $0.25/quarter dividend then I gain another $3.75 of income totalling $981.75. An incremental gain of 0.0383% or 1.533% annualized.

Further down the list of existing holdings that I wish to increase for greater sector diversification in Club 1,000 are my Telecom/Media stocks BCE and Telus. They are still far off from the $1,000 mark, paying $487.52 and $600.60 respectively. They have been raising their dividends yearly and consistently, which has helped boost their contribution to the goal. However, for significant increases in the dividend returned, I am waiting for the opportunity of a decline in the share prices to purchase more.

The goal is to continue increasing the Club 1,000's dividends; diversify the Club's sector holdings; maintain a higher average yield for the overall portfolio; and increase the dividends from up and coming stocks. The preference is to raise up investments with higher quality and upside potential and this means increasing holdings of those more likely to raise their dividends and continuing to use Dividend Reinvestment Plans to automatically accrue more shares.

It will take a lot of time and potential setbacks, but this is all to push towards the $50,000 distribution goal. Which reminds me; I haven't put together the 50K Report for some time...