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For those new to the blog, I like to keep my readers up to date on portfolio changes. One of the reasons I started this blog was to educate others, but also to improve my own investing. By keeping an open book of my portfolio and changes to it, I hope to generate discussion so others can see how I put my investing philosophy into practice. For the most up to date portfolio changes follow my twitter account as I will usually tweet first and then follow-up with a blog post.

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⭐ Find dividend growth stocks that have survived multiple recessions and increased dividends for 5, 10, 25+ years in a row.

National Bank of Canada

On Friday August 21, 2015 I purchased National Bank of Canada [TSE:NA Trend] for $42.27 plus the commission.

National Bank of Canada is the leading bank in Quebec and the sixth largest bank in Canada with branches in almost every province. It operates in three business segments–Personal and Commercial, Wealth Management and Financial Markets – with total assets of $216 billion as at July 31, 2015.

Since 2011, National Bank has been in the habit of increasing their quarterly dividend twice a year with the two most recent announcements increases from $0.48 to $0.50 and then to $0.52. This amounts to an annual increase of 8.3%. As they have already recorded two $0.52 dividends, I’d guess that the next dividend will be higher. If I was a betting man, my guess would be $0.54 as a two cent raise has been their recent trend. A two cent raise would also leave them in their payout ratio target of 40-50%.

National Bank of Canada Mid Term Objectives 2015 Q3 Investor Fact SheetNational Bank has increased its dividend for 5 consecutive calendar years and currently yields 4.9%. They have 5 and 10 year dividend growth rates of 9.1% and 9.8% respectively. I’d expect similar dividend growth rates in the future. When I last looked at Valueline a couple of months ago they were estimating a 3-5 year annual dividend growth rate of 8.5%. I’d classify this as high yield high dividend growth stock which is the sweet spot of dividend growth investing.

You can see from the credit ratings below that the company has good financial strength. Valueline gave them a B++ for financial strength rating which is good, but not great.

National Bank of Canada Credit Ratings 2015 Q3 Investor Fact Sheet

I start to get interested in investing in National Bank of Canada around a dividend yield of 4.9%. This should be no surprise as my recent purchase resulted in a yield on cost of 4.9%.

Exxon Mobil Corporation

On Friday August 21, 2015 I purchased Exxon Mobil Corporation [NYSE:XOM Trend] for $73.26 plus the commission. This was the second purchase of Exxon Mobil as I averaged down from my initial purchase at $83.

Related article: Portfolio Update: Exxon Mobil Corp. Purchased

Exxon Mobil Corporation has an impressive dividend streak having increased its dividend for 33 years in a row. Their most recent increase was 5.8%. When you consider the oil and gas industry has been hurting, the recent increase is also impressive. To give you some perspective, Chevron [NYSE:CVX Trend]; another dividend aristocrat (25 or more years of increases), did not increase their dividend when a full year came around and instead kept it steady.

Their 5 and 10 year average annual dividend growth rates are 10.2% and 9.8%. Valueline is estimating that over the next 3 to 5 years dividend growth will be about 5% annually. They have very good financial strength with an A++ financial strength rating from Valueline.

The company currently offers a dividend yield of 4.0% which is historically quite high for the company as you can see from the chart below.

XOM TTM Dividend Yield Chart

I start to get interested in investing around the 3.5% dividend yield mark.

Other Purchases

This article just discusses the stocks I purchased on August 21, 2015, but on a particularly volatile Monday August 24, 2015 I purchased another three stocks: Bank of Nova Scotia [TSE:BNS Trend], Caterpillar [NYSE:CAT Trend] and Emerson Electric [NYSE:EMR Trend]. I purchased Bank of Nova Scotia for $55.04 plus commission, Caterpillar for $72.00 plus commission, and Emerson Electric for $45.12 plus commission. More recently I purchased Potash Corporation of Saskatchewan for $28.00 after commission on September 25, 2015. Keep an eye out as I’ll be going over these purchases in more detail in future articles.

What do you think of my purchases of National Bank of Canada and Exxon Mobil Corporation?

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12 Comments

    1. I make a small amount of income in US dollars and i use my USD dividends to reinvest in more US stocks. This is sort of a natural hedge, but it is not enough of a hedge to cover the whole US stock purchase.

  1. Yay! Happy to welcome another co shareholder in NA! Just love the growth this bank shows. Perfect for dividend growth investors like us! Congrats on that adding.

    Cheers,

    Mike

  2. I bought National Bank this week too! Solid bank with a good price point to get in. I haven’t been buying anything US right now. To me with the exchange rate it is too costly.

  3. What you think about its recent controversy. 300 million share offering for maintaining cet1 ratio. Are you still planning to avg it down

    1. I’m fairly heavy on financials right now, so I’m not sure if I’ll average down if it drops more. If I didn’t have a lot of financials in my portfolio right now then I would average it down and buy more shares in spite of the share offering.

      1. Well, i wonder if they will be able to conitnue dividend increases after there investment in Maple Financial Group Inc. was at risk of “substantial loss, And, how it will effect your decision to invest in bank.

  4. Thanks for the analysis. I was waiting for the stock to go below $44 before reading your blog.

    I recently bought some NA below $42 .. and have made two additional purchases since .. might go for a 4th purchase if the price drops below $40. I have always wanted to own NA. My book average is $41.60 and I am hoping the dividend rises 2 cents on the next declaration date.

  5. Hi. I am brand new to this blog. Pretty excited I found it…
    I too have been buying NA lately. I also bought POT yesterday and TRP when it hit 4.9%
    I’m a little envious the author bought BNS at $55 lol I’m in it at $60 Kirk

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