Aug 6, 2016

5 Recent Buys - CU, CVS, ES, TGT, UNA & 1 Sale - HCP

Big news! I have started a new position in Canadian Utilities Ltd. (CU.TO) but also closed out one position: HCP Inc (HCP). Additional shares I bought in CVS Health Corp (CVS), Eversource Energy (ES), Target Corp (TGT) and Unilever NV (UNA.AS).

Buy in CAD - Canadian Utilities Ltd. (CU.TO)
Trade Price: 39.95
Shares: 8
Commission: 1.02
Total: 320.62
Sector: Utilities - Electric/Gas
Yield: 3,3%
Payout Ratio: 113%
Dividend Increase Streak Years: 44
Annualized Dividend Growth 3-yr: 10,1%
P/E: 28,7
S&P Credit Rating: A

Buy in USD - CVS Health Corp (CVS)
Trade Price: 92.58
Shares: 1
Commission: 0.35
Total: 92.93
Sector: Healthcare - Retail/Pharmacy
Yield: 1,8%
Payout Ratio: 37%
Dividend Increase Streak Years: 13
Annualized Dividend Growth 3-yr: 29,1%
P/E: 21,3
S&P Credit Rating: BBB+

Buy in USD - Eversource Energy (ES)
Trade Price: 58.79
Shares: 2
Commission: 0.35
Total: 117.93
Sector: Utilities - Electric/Gas
Yield: 3,0%
Payout Ratio: 65%
Dividend Increase Streak Years: 18
Annualized Dividend Growth 3-yr: 8,1%
P/E: 21,6
S&P Credit Rating: A

Buy in USD - Target Corp (TGT)
Trade Price: 74.90
Shares: 1
Commission: 0.35
Total: 75.25
Sector: Consumers - Discount/Variety Stores
Yield: 3,2%
Payout Ratio: 45%
Dividend Increase Streak Years: 49
Annualized Dividend Growth 3-yr: 17,8%
P/E: 13,8
S&P Credit Rating: A

Buy in EUR - Unilever N.V. (UNA.AS)
Trade Price: 40.63
Shares: 2
Commission: 0.81
Total: 82.07
Sector: Consumers - Personal Products
Yield: 3,2%
Payout Ratio: 71%
Dividend Increase Streak Years: 9
Annualized Dividend Growth 3-yr: 7,8%
P/E: 22,6
S&P Credit Rating: A+

Sale in USD - HCP Inc (HCP)
Trade Price: 38.68
Shares: -30
Commission: 0.34
Total: 1160.06
Sector: REIT - Healthcare Facilities

So, unfortunately I must report that I have sold one of my biggest income vehicles: HCP. Main reason behind this sell decision is the coming HCR ManorCare spin-off. HCP's largest tenant has been a problem child for some time, and now it looks like the problem will be transferred to a new company. Fine, but I don't want to participate. This would have created a small low quality position in my portfolio which I'm not interested in owning. Additionally I'm not sure what our taxman thinks about spin-offs, so I'm also avoiding a potential taxation hassle here. When the spin-off dust settles and we have some clarity about new HCP's dividend policy, I may return to the company.

Canadian Utilities has the longest streak of dividend increases of all Canadian companies; a massive 44 years. Right now CU's numbers in valuation and payout ratio don't look very good, but with this year's estimated earnings payout ratio should land near 65% and P/E around 19. With this purchase I further diversify my portfolio to Canada and hope for very 'boring' investment.

Eversource Energy has been a solid utility holding for me, but for some reason I have not been able to buy more shares for a long time. Well, I guess the biggest reason is the strong share price performance. From valuation point of view not a great deal, but market is somewhat crazy now and I don't know when a decent pullback takes place. If I had to guess it doesn't take place any time soon. Additionally I continued building my position in CVS and UNA.AS, in which I grabbed two more shares just before ex-dividend date.  

Thanks for reading. My Portfolio page has been updated to reflect these trades.

Disclosure: Long CU.TO, CVS, ES, TGT, UNA.AS

photo source


  1. Oh man! I own HCP. I wasn't tracking this spin off (though I have been aware of the ManorCare struggles)...thanks for the heads up! I think I will hold until I find out more!

    1. PID, it's definitely a good idea to find out more about this spin-off, and then decide what you want to do. I decided to part ways with HCP, but I continue to follow the company and may return after spin-off.