I believe in investing for the long run, so think of this as a progress report and not the last word on these companies.
John Heinzl is the dividend investor for Globe Investor's Strategy Lab. Follow his contributions here. You can see his model portfolio here.
Kids will be getting their final grades any day now, so it's only fair that Yield Hog gets a report card, too.
I regularly provide updates on my Strategy Lab model dividend portfolio. But it's been a while since I reported on the performance of the many other stocks I've written about, so today I'll focus on those.
I have mixed feelings about an exercise such as this. On the one hand, it's important to be held accountable. On the other hand, I believe in investing for the long run, so what happens to a stock over six months or a year is largely irrelevant. Think of this as a progress report and not the last word on these companies.
All of the following stocks were featured in my Yield Hog column over the past year or so. In cases where I wrote more than one column on the same company in that period, I used the earliest column. All total returns assume dividends were reinvested and are for the period from the publication date through June 20.
Starbucks Corp. (SBUX-Q)
- Yield: 1.4 per cent
- Date profiled: May 19, 2015
- Price then: $51.42 (U.S.)
- Recent close (June 20): $55.38 (U.S.)
- Total return: 9.1 per cent
- S&P 500 total return: 0.2 per cent
Starbucks may have a modest yield, but its expansion potential abroad, growing dividend, addictive product and mobile prowess make it a compelling pick for long-term investors, I said. The company raised its dividend by 25 per cent in October, and I'm expecting another hefty increase this fall.
Canadian REIT (REF.UN-T)
- Yield: 3.9 per cent
- Date profiled: June 16, 2015
- Price then: $42.87
- Recent close: $46.66
- Total return: 11.2 per cent
- S&P/TSX total return: negative 1.8 per cent
I wrote that Canadian REIT – whose units had been hurt by its exposure to the Calgary office market – is attractive because it is well-managed, diversified, growing and regularly raises its distribution. The units have been recovering, helped by rising oil prices, and in May Canadian REIT underscored its confidence by boosting its distribution by 1.7 per cent.
Algonquin Power & Utilities Corp. (AQN-T)
- Yield: 4.6 per cent
- Date profiled: June 23, 2015
- Price then: $9.66
- Recent close: $11.85
- Total return: 28.9 per cent
- S&P/TSX total return: negative 2.8 per cent
When I wrote about Algonquin, the stock had been hammered by anonymous allegations about the company's financial reporting (the company investigated the allegations and said it found nothing amiss). Despite this and other short-term setbacks, I said Algonquin remained attractive for its growing dividend, above-average yield, predictable earnings and ambitious growth agenda. The most recent dividend hike – of 10 per cent – was announced in May.
Brookfield Renewable Partners LP (BEP.UN-T)
- Yield: 6.1 per cent
- Date profiled: July 28, 2015
- Price then: $35.57
- Recent close: $36.89
- Total return: 8.8 per cent
- S&P/TSX total return: 2.5 per cent
I cited Brookfield Renewable's growing portfolio of hydro- and wind-generating assets, geographic diversity, relatively low-risk earnings and steadily rising distribution as reasons to like the stock. Although the unit price hasn't moved much in the past year, in February the partnership raised its distribution by 7 per cent, continuing a pattern of annual increases.
Emera Inc. (EMA-T)
- Yield: 4 per cent
- Date profiled: Sept. 15, 2015
- Price then: $42.70
- Recent close: $46.78
- Total return: 13.1 per cent
- S&P/TSX total return: 6.7 per cent
I wrote about Emera – the parent of Nova Scotia Power Inc. – less than two weeks after it announced the $10.4-billion (U.S.) acquisition of Tampa-based electric and gas utility Teco Energy Inc. The market had given the deal a cool reception, but I said the transaction would provide Emera with a new platform for growth and support future dividend increases. Emera completed financing for the deal this month and is working through the final stages of approval, and the stock has responded positively.
Pizza Pizza Royalty Corp. (PZA-T)
- Yield: 6 per cent
- Date profiled: Nov. 10, 2015
- Price then: $14.15
- Recent close: $14.20
- Total return: 4.1 per cent
- S&P/TSX total return: 6.7 per cent
In the months after I wrote about Pizza Pizza Royalty, the unit price plunged about 14 per cent – then recouped all of those losses. In June, Pizza Pizza announced a 2.4-per-cent dividend increase – the third hike in less than 14 months. Even as the company's Pizza 73 business in Alberta has struggled with falling sales, same-store sales have continued to grow at the much larger Pizza Pizza chain in Ontario.
Loblaw Cos. Ltd. (L-T)
- Yield: 1.5 per cent
- Date profiled: March 1, 2016
- Price then: $70.16
- Recent close: $68.88
- Total return: negative 1.1 per cent
- S&P/TSX total return: 9.1 per cent
I wrote that Loblaw offers "a nice combination of safety, growth and a rising dividend." Well, the rising dividend part is true – in May, the company increased its dividend by 4 per cent – but the stock price has generated about as much excitement as standing in a checkout line. A few months doesn't tell you much, of course; the real test will be how Loblaw's stock performs over the next few years.
Disclosure: The author personally owns REF.UN, AQN, BEP.UN, EMA and PZA.
John Heinzl