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On Feb 6, I used fresh capital to add to my position in HLF. 

- HLF: 100 shares @ $13.10, +$58 dividend, 4.4%

My yearly dividends now stand at $10,896.


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WFC was down about 10% yesterday and continued its decline today. So I thought it was a good time to sell a put.


If I do get put the shares, I'll be buying @ $47.30. Seems like a pretty good deal in a rising rate environment.


I bought shares back in September 2016 after the bank account scandal and added to my position in May 2017. I've done ok so far...even with the recent share price drop. I hold it in my TFSA so i get dinged with a 15% dividend withholding tax. On the bright side, there is no capital gains tax.


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In May 2017, I purchased 100 shares of CSCO @ $31.15. Since then, I have received 3 dividend payments and the share price has risen to about $42.



On Feb 1, I sold a Call in CSCO:




The most likely outcome is that I will BTC the call at some point. Other outcomes are:

1. CSCO is trading above $42.00 at expiration. I will have to sell my shares.

2. CSCO is trading below $42.00. I will get to keep my shares as well as the premium.



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As discussed in a previous post, I sold a Put option in KR on Dec 26th. Since then, the share price has appreciated a couple dollars and I decided to close the option.


I netted $111.59 over 36 days.
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Today, I used fresh cash ($5,748) along with the proceeds from the sale of EMP.A and XTC to buy 604 shares of Capital Power Corp (CPX) @ $23.60. It pays a dividend of $1.67 per year, and the company plans on increasing the dividend by 7% per year through to 2020 (that’s 3 increases @ 7%). My total investment is $14,264.35, adding $1,008.68 to my yearly dividends – they now stand at $10,716.

So, why am I convinced this is a good investment? Read on…

On Jan. 9, 2018, President and Chief Executive Officer Brian Vaasjo purchased 2,300 shares at an average price per share of $24. The previous day, he bought 8,050 shares also at an average cost per share of $24. These trades lifted his portfolio's position to 94,680 shares.

On Jan. 12, 2018, Jill Gardiner, who sits on the board of directors, acquired 1,280 shares at an average price per share around the $23.44 level, increasing her account's position to 6,705 shares.

John Heinzl published an article on October 31, 2017, “A 6.8 per cent dividend yield that’sactually safe”. You can read the full article if you have a Globe and Mail subsription. If not, here is an excerpt:

Even as the company has been increasing its dividend, its payout ratio is a comfortable 48 per cent of adjusted funds from operations (AFFO) for 2017, falling to 44 per cent in 2018, according to analyst Patrick Kenny of National Bank Financial. Despite Capital Power posting a net loss of $5-million, or 13 cents a share, in the third quarter – reflecting non-cash charges – Mr. Kenny maintained his "outperform" rating and $33 target price, noting that Capital Power still expects AFFO to come in near the midpoint of its guidance range of $340-million to $385-million in 2017. (AFFO is based on net cash flow from operating activities, adjusted for a number of items, and is "a measure of the company's ability to … fund growth capital expenditures, debt repayments and common share dividends to the company's shareholders," Capital Power says.)

Raymond James is positive: "The company's pipeline of [North American] wind projects represents a key element of our constructive stance on CPX," Raymond James analyst David Quezada said in a recent note, in which he reiterated his "outperform" rating and $30 target price on the shares.

Veritas Investment Research is also positive: "Given its commitment to return significant amounts of capital to shareholders through fiscal 2020, combined with the long-term advantage of a young asset fleet, we believe CPX is an appealing income investment," said Darryl McCoubrey, who has a "buy" rating and $29.50 intrinsic value estimate on the shares.

In addition to the above, there is an excellent article on seekingalpha that goes into the financial details.

Note:

I bought shares of EMP.A (Sobeys) 2 years ago and its been dead money. The dividend yield is quite low (1.7%) and the dividend growth has been pathetic @ 0.5% per year. They really screwed up the purchase of Safeway Canada.

As for XTC, I bought the shares in January 2017, and I'm underwater about $600. I'm pissed with myself that the market has boomed and this has been shit.

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On November 9, Telus increased its quarterly dividend from $0.4925 to $0.505, or 2.5%. Since I own 398 shares, my yearly dividends increase by $19.90.

On November 29, Enbridge increased its quarterly dividend from $0.61 to $0.671, or 10%. Since I own 400 shares, my yearly dividends increase by $97.60.

On January 11, Atco increased its quarterly dividend from $0.3275 to $0.3766, or 15%. Since I own 100 shares, my yearly dividends increase by $19.64.

On January 11, Canadian Utilities increased its quarterly dividend from $0.3575 to $0.3933, or 10%. Since I own 100 shares, my yearly dividends increase by $14.32.

2018 Dividend Increases

Telus: +2.5%, $19.90
ENB: +10%, $97.60
ACO.X: +15%, $19.64
CU: +10%, $14.32
CVS: 0%
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All my TGT shares have done is pay me a dividend, that is until last week, where the share went from about $66 to $76. Finally!

Those who bought in June or July 2017 at close to $50 have done extremely well for themselves (provided they didn't sell). Unfortunately, I sold 50 shares at $50.65 to raise cash for the purchase of my Tahoe. Fortunately, I sill have 250 shares.

I've been in TGT since 2012 and at one point, my total return was close to -20%. Today, my total return is 26%. With dividends, it's 40%. Those numbers are nice and big. They make me feel good! But how about the CAGR?

Because there were cash deposits (i.e. share purchases) and cash withdrawls (i.e. shares sold, dividends received) spread out over time and at irregular intervals, I used the XIRR formula in Google Sheets to calculate the CAGR. The table below shows my CAGR is just over 9% with dividends and just below 6% excluding dividends.


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As discussed in my previous post, I sold a Call option in GIS on Dec 26th. Since then, the share price has fallen a couple dollars and I decided to close the option.

On January 11th, I bought to close (BTC) the Call option. The transactions are:

Sold 1 GIS Call Apr 20 '18 $60 @ $2.43 ($11.20 commission + $0.01 SEC Fee)
BTC 1 GIS Call Apr 20 '18 $60 @ $1.38 ($11.20 commission)

I netted $82.59 over 16 days. 

I will consider selling another call option on GIS should the share price surpass $60.
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On Dec 26, I sold a call in GIS. 

Sold 1 GIS Call Apr 20 '18 $60 @ $2.43 ($11.20 commission + $0.01 SEC Fee)


Days Held (sell date to expiry): 115

Net Premium: $231.79

Annualized Return = ($231.79 / ($5,655.94 - $231.79)) * 365/115 = 13.6%
Note: $5,655.94 is the price I paid for 100 shares.

The most likely outcomes of this trade are:

1. GIS is trading above $60.00 at expiration. I will have to sell my shares.

2. GIS is trading below $60.00. I will get to keep my shares as well as the premium.
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A short straddle is an options strategy carried out by holding a short position in both a call and a put that have the same strike price and expiration date. The maximum profit is the amount of premium collected by writing the options. Short straddles are limited profit, unlimited risk options trading strategies that are used when the options trader thinks that the underlying securities will experience little volatility in the near term.

Because KR rocketed from about $20 to $28 in just a few months, I'm betting that the share price isn't going to do much over the next 4 months. So I:

Sold 1 KR Put Apr 20 '18 $28 @ $2.10 ($11.20 commission + $0.01 SEC Fee)
Sold 1 KR Call Apr 20 '18 $28 @ $1.95 ($11.20 commission + $0.01 SEC Fee)

My net premium on the Put is $183.79 and my net premium on the Call is $198.79, for a total of $382.58.

On April 20th, 2018, if shares of KR trade between $25.90 ($28 - $2.10) and $29.95 ($28 + $1.95), the options will likely expire worthless and I will get to keep the $382.58.

If I am put 100 shares @ $28.00, I will actually end up paying $28.00 - $3.83 (options premiums) = $24.17. My cost basis for my 522 shares of KR is $21.33, and adding another 100 at $24.17 wouldn't be so bad.

If I am called 100 shares @ $28.00, I will actually end up selling my shares at $28.00 + $3.83 (options premiums) = $31.83. I will have held the shares for 7 months and made 49% plus a small dividend, ((($31.83 - $21.33)/21.33)*100).
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