A peek inside youngandthrifty's Tax Free Trading Account for 2011. In this series, you have to guess which equity she holds in it. Hint- it's not Manulife.
Here’s part three of the five part series on what I’m holding in my TFSA. We’re halfway through, so just one more Wednesday of putting on your thinking caps and guessing what equity I bought and it’ll be back to my regular posts. 🙂

In this series, I am sharing what my holdings are (or what I bought) in my Tax Free Trading Account for 2011. I had income trusts in 2010 and sold them all off due to being weary about what might happen come January (which is now a few months ago– time flies!) when they slash their distrubutions due to them being incorporated.

The last two weeks, I talked about EIF.TO and then JE.TO both doling out huge dividends (8-9% annually). This week, you can try to guess the next holding I have in my small TFSA portfolio.

Here goes- put on your thinking caps:

I’ll give a major hint first. It’s a very boring stock (just like My Own Advisor’s Enbridge  Stock) and it was never an income trust (so no conversions involved for this big guy).

  • The P/E ratio is about 11.19
  • The dividend yield is about 4.51% annually (I know it’s not like the 8-9%’s but this is a much bigger company with much more trading volume)
  • That 4.51% annually is about $1.44 per share annually
  • Its 52 week high was $34.39 a share and the low was $23.58 (which would have been a very good entry point! Hindsight’s always 20/20 🙂 )
  • They have increased their dividend yield consistently (which is a very good thing for investors)
  • This is an even bigger hint- it’s primarily known as an insurance company.. but also has diversity in selling mutual funds, annuities, pensions, invstment management and even banking around the world.
  • And unlike their competitor, Manulife, they didn’t slash their dividend in half when the going was tough (though Manulife’s earnings is heavily based on the stock market)
  • I’m sure you have guessed it by now!
  • I should have probably held it in my non-registered portfolio because of the preferential tax treatment on the dividend income, but it’d be nice not to pay capital gains when I sell.

Have you guessed it yet? This is by far the easiest one to guess because everyone knows or has heard of this major Canadian corporation.

It is.. Sunlife! Yeah.. the picture associated with this post was a big giveaway.

Yes, the same Sunlife you see in those commercials about life insurance and investing with a financial advisor, because “Life’s brighter under the sun”.

I held Manulife in the past outside of my registered portfolios and decided on Sunlife this time because of its low P/E and sense of stability. I also prefer Sunlife to Manulife because first off, Manulife pissed everyone by slashing their dividends back when the economy was in worse off shape than it is now, and Manulife’s earnings are heavily affected by the stock market. Also, Manulife’s P/E is something ridiculous like 155!

Readers, do you hold Sunlife in your portfolio? What do you think of it?

Article comments

11 comments
chad says:

Will be setting up the couch potato this year already top holding xiu.Now the vangurd funds will be 2012.
It is amazing how the couch potato works.I was actully in one of the money sense articles last year.And learned lots from it.So far Iv’e fired 2 finacial planners and 1 stock broker in 13 years.The first 5 years with them.And the last 8 on my own and way better off.
Hopefully more people do there own investing instead of feeding the vultures in the investment world with there high fees.Yes some people need advice.But the couch investing is more a mind set, and with low cost etf’s the access of information on the web sites.Investing and reaserch is cheaper and more avaliable than ever before.That the small guy or gal actully has a chance in making some extra $$$$ in investing.

young says:

@chad- well said! It takes some effort on the investor’s part to start investing in ETFs and indexing. I really enjoy the Canadian Couch Potato website as well.

chad says:

what do currentley have in your tfsa
and are you going to be buying anything new in 2012???

I’m looking at the vangurd etf funds

young says:

@chad- The vanguard ETF funds are probably a great idea especially since I recently found out from reading the Millionaire Teacher that Vanguard is nonprofit! I’ve been bad at managing my ETFs because I tend to be more attracted to buying more dividend producing individual stocks (though I know that is not as smart) when I have extra cash to spare to put into my portfolio. Have you looked at the Canadian Couch Potato’s recommendations for ETF allocations and funds? I currently have a lot of dividend (Canadian) stocks in my TFSA and I am planning to add more to them versus buying more different stocks.

CF says:

I was planning on making SunLife my first (of many??) dividend purchase actually.

I first started looking at it when it was near it’s low ~$24 and you can probably guess how annoyed I am that I didn’t have the cash to buy it back then!

young says:

@CF- Oh yeah, I completely know what you mean. I was annoyed at myself when I was looking at HSE (Husky) at like $24 and now it’s at around $30 as well. C’est la vie!

young says:

@CF- PS I heart dividend payers! 🙂

I guessed this one right! Do I get a prize?

Manulife intrigued me when it was less than $15. If it got down to that level again I’d definitely think about buying, maybe they’ll come out with some bad earnings with the recent market troubles, causing the stock to go down to where I want it.

Sunlife just isn’t enough of a contrarian name for me. There’s nothing wrong with the company though, it should be a solid performer.

young says:

@Financial Uproar- You get the prize of Y&T’s adoration on how brilliant you are at being able to guess SLF! Yeah, I was intrigued when manulife was so low too and was even more intrigued that Manulife was able to pull through and bring it back up again (they said they were doing some restructuring).

Echo says:

I’ve had my eye on SLF for a while now but didn’t pull the trigger. I bought Great West Life last year and it has been a dud so far, so I think I’ll wait until I see some signs of life in this sector (like a dividend increase) before I jump in again.

young says:

@Echo- Yeah, I had the same doubts, it’s just at close to the 52 week high, so I compromised by not buying so many shares in it. I’m sure a dividend increase is set to come.. it’s been over 3 years. As long as it’s not a decrease … 🙂