As you know, I sold off my Tax Free Trading Account portfolio (remember, it’s a “souped up” TFSA) and took the money out for the house down payment. My portfolio was up about 20% Return on investment, but 2010 was such a great year for making gains on the stock market, I’m sure most people had similar returns (20% beats the 1.5% in a regular ol’ TFSA any day- though of course there is risk involved) . I then transferred $5000 of my non-registered money (I sold a few loser stocks there as well) into the Tax Free Trading Account. I will have $10,000 remaining that I can put in, and I plan to put my tax refund into my TFSA and RRSP this year too.
The reason why I sold off a lot of my TFSA portfolio was also because of the changes in terms of taxation on the income trusts I was holding- they had to convert to corporations and a lot of their distributions (read= 9-11% per year given back to you) were going to be slashed big time.
I thought I would share my picks for this year and give the reason why I chose the particular investment. This year, it was more difficult to find bargains in terms of more bang for your buck because lots of stocks were trending at their 52 week highs. Ideally, I would like for the stocks I pick to perform well (duh, who doesn’t?) but I would be happy if it stayed “status quo” too because they will pay me some juicy dividends anyway.
I think I’ll share what I invested with the way My Own Advisor did it by playing “Who are They?”, so you can guess and it’ll be more fun that way (SPOILER ALERT: he bought Fortis (FTS.TO), one of my all time favourite dividend payers).
Oh, and I’ll share one a week, just to add to the suspense (there were a total of five I bought).
So here’s the first one. You might have to do a bit of sleuthing around this blog to find the clues.
- It is a Canadian company, based out of Winnipeg
- It was a stock I bought from my 2010 TFSA porfolio
- It had already turned into a corporation in 2010 and still kept a good dividend yield
- It pays $0.13 per share every month like clock work
- This works out to be about a 8.43% annual yield (how about ‘dem apples, regular ol’ TFSA?)
- It DID pay 11.3% annual yield, but it just got more expensive to hold in your portfolio, that’s all
- It increased its distribution amount by 4% in 2008
- The P/E (Price to Earnings Ratio) is 18.33 (which I don’t like because ideally you want it <15, but I do like the dividend it pays)
- The Price to Book Ratio is 1.98 (you want it less than or equal to 1.5)
- This company focuses on Aviation (provides airline service and medical air services to First Nation communities in Northern Manitoba and Nunavut to Winnepeg) and Manufacturing (it produces specialized tanks, pressure equipment, and precision metal parts in Western Canada and the US)
Alright, did you guess what it might be?
If you guessed Exchange Income Corporation, then you win the satisfaction of knowing your Canadian aviation and manufacturing industry!
I didn’t want to buy it because it seemed somewhat expensive (near it’s 52 week high, unfortunately like many other stocks out there), then changed my mind because of the lusty 8%+ annual yield. I only bought 50 shares of it. I like that it is a diversified company (has a focus on both aviation and manufacturing) and are growing and acquiring businesses (recently acquired HMY Airways in 2009), yet still are able to maintain the dividend yield. I also like that the aviation part of the business seemingly focuses on a stable part of the aviation industry- transport of patients to and from remote communities to Winnipeg for access to health care (which is paid for by the federal or provincial government and our tax dollars I believe :)).
Readers, do you own EIF.TO? Do you find it as sexy as I do? 😉 What have you put in your TFSA’s this year?
Stay tuned for next Wednesday (same Bat Time, same Bat Channel) for guess at my next TFSA portfolio holding. And please, if you’re interested in this stock, please do your own diligence and research- as I’m in no way a financial planner or finance guru of any sort! So don’t be a lemming or get mad at me 🙂