Youngandthrifty’s TFSA Holdings for 2011

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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.

investing Pictures, Images and PhotosI 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 🙂

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Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

19 Comments

  1. Steve Zussino on March 9, 2011 at 8:28 am

    Great minds think alike!

    I heard about EIF on Globe and Mail. It is a company close to my roots in Northern ontario but I have this in my RRSP.

    I am looking to contribute to our TFSA later this month. I am looking at Power Financial or Coke or Rothmans.

    Have you r



  2. The Passive Income Earner on March 10, 2011 at 10:52 am

    Thanks for sharing. I did not guess it. I’ll add it to my tracking sheet. I feel like a similar size company to LIQ with a niche business. I like the yield so I’ll have to pay attention and monthly is gold for compound growth!



  3. My Own Advisor on March 10, 2011 at 11:33 am

    Cute game! I’m biased though! 🙂

    @Y&T – I think you’ve made a good move, this is as good of a high-yielder as you can buy. I need to look at this one more myself, the yield is too juicy not to take a second look; especially if you already own other dull and boring stocks like FTS, ENB, TRP, etc.

    @Steve – I like PWF as well. I’m going to buy that for my wife’s TFSA pretty soon. I should probably tell her about that 😉

    Cheers,
    Mark



  4. Afford-Anything.com on March 10, 2011 at 11:37 am

    Stocks and stock funds that pay dividends are extremely important to have in your portfolio, especially because it seems like inflation is looming around the corner (I’m using a long-term definition of “corner,” like in the next 2-3 years).

    Dividends are a great — and underappreciated! — tool for fighting off inflation.



  5. Sonya on March 10, 2011 at 3:26 pm

    Thanks for sharing you gave me something to think about, great post by the way very informative.



  6. the cynical investor on March 11, 2011 at 7:48 pm

    Warren Buffett: We agree with investment writer Ray DeVoe



  7. Kyle on March 11, 2011 at 8:17 pm

    Hi, I’m actually from Winnipeg (ps…I know it’s petty, but my hometown is spelt wrong) and am vaguely familiar with the company. I wouldn’t say it is a bad investment, but I think there are better out there. The aviation field in general is extremely competitive and with oil going up in the coming years the profit margins for a business like that can’t help but be squeezed. It will probably give you a decent dividend for the foreseeable future, but I just don’t like the valuation at this level and I don’t think it has much growth potential.



  8. young on March 12, 2011 at 11:07 am

    @Kyle- Sorry for the spelling error! I really need to remember to do spell check before I post stuff. I’ll correct it now 🙂 PS It’s not petty at all, I would be pissed if someone spelt Vancouver wrong. Thanks for sharing your opinion on this equity, Kyle. You make some good points. I don’t foresee me holding this stock for the long term, either.



  9. young on March 12, 2011 at 11:07 am

    @the cynical investor- thanks for the quote. 🙂



  10. young on March 12, 2011 at 11:08 am

    @Sonya- Is there another person blogging for you now, Sandy? I didn’t know you had a sonya 🙂



  11. young on March 12, 2011 at 11:09 am

    @Afford-Anything- I love dividends too. I think dividend paying companies are more accountable too.



  12. young on March 12, 2011 at 11:11 am

    @My Own Advisor- I only learn from the very best! 😉 I love the dull and boring stocks you own. I only have FTS of the ones you listed though. I do have ECA too, but it’s not as dull. It goes up, and down, and up, and down. 😉

    Your wife is so lucky to have you managing her TFSA!



  13. young on March 12, 2011 at 11:12 am

    @The Passive Income Earner- I had LIQ too, but sold it. Haven’t been keeping track of it- but I’ll take a look now and see how its doing. I liked LIQ’s dividends too, but didn’t know what was going to happen after the incorporation.



  14. young on March 12, 2011 at 11:16 am

    @Steve Zussino- I didn’t know you were from Northern Ontario! Big difference from Northern Ontario and Victoria 🙂

    Hey Steve, I didn’t think you could buy USD stocks with TFSAs? Or if you can, you might be taxed a withholding tax on dividends in the TFSA. In the RRSP you wont be.
    Canadian Capitalist clarifies;
    www.canadiancapitalist.com/check…lding-tax/



  15. chad on April 13, 2011 at 8:55 pm

    have you ever thought of u.s divy companies like WMT??

    with the high cdn dollar just wondering if this compelling enough??



  16. young on April 13, 2011 at 11:40 pm

    @chad- Oh yeah, totally! I’m thinking of getting BBY (it’s been a real downer lately, near its 52 week lows). BUT the caveat is that you need to hold this in an RRSP, and not a TFSA (TFSA’s don’t hold US dollars). I just put in $1500 into my RRSP for this reason, to get in on a cheap US dividend stock. Another thing to think about is that Questrade is the only brokerage (well, this might have changed) that lets you hold USD for free in your RRSP without incurring extra charges.



  17. Dominic on December 25, 2011 at 9:04 pm

    I have a little TA and a little Husky in my TSFA.
    I am thinking to add some RioCan or Hex into it, what do you think?



  18. young on December 25, 2011 at 10:06 pm

    @Dominic- I’m really interested in HSE but havent’ gotten the chance to buy some yet. I just read about HEX (I remember seeing it in Moneysense) and am very intrigued. That is one juicy monthly distribution. I saw that Million Dollar Journey had a great discussion about it on his blog. As for RioCan- I don’t know about real estate, because interest rates are so low and they ARE bound to go higher- I don’t know if this would be a good long term investment. I like that HEX is more varied and includes the top 30 dividend paying stocks that are most liquid on the TSX.



  19. Dominic on December 25, 2011 at 10:17 pm

    Have you set up a new dividend goal for 2012?

    You own JE or LIQ? The div seems pretty solid.



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