The portfolio started the year waltzing away. I have already begun earning interest on my RBC GIC, with the value of it ending January at $1,505.96, versus its month starting value of $1,500. Meanwhile, my investment in Intact Financial Class A preferred shares (TSX:IFC.PR.E) benefitted from a general rise in the prices of Canadian preferred shares during January, with my original investment of $730.07 rising to $750.72 by month-end, which helped increase the preferred stock portion of the portfolio from $750 to $767.02!
In total, the portfolio gained 1.02% with an ending value of $2,272.98, a whole $22.98 more than its starting value of $2,250, hooray :)!
To start February, I contributed $250 to the portfolio, and invested it plus some leftover cash into Great-West Life Co's 5.4% Series P Non-Cumulative Preferred Shares (TSX:GWO.PR.P) at a price of $22.72 per share. The company is in good financial condition, with its operating income covering the interest it pays on its debt by 9.16x, and its pre-tax income covering its preferred share payments by 22x. The company is a large life insurance business with operations in Canada and the US, with a long history of steadily rising revenue and income.
Each preferred share pays a quarterly dividend of $0.338, for a total dividend payment of $1.35 per year. At my purchase price of $22.72, my annual dividend yield on the investment is $5.94%, as I purchased shares at a $2.28 discount to its par value of $25 ($1.35 dividend ÷ $22.72 purchase price x 100 = 5.94%). Since we purchased the shares at a discount, should the company ever decide to redeem their Series P Preferreds, they would have redeem them at their par value of $25 each, a 10.03% premium to my purchase price ($25 par value - $22.72 purchase price ÷ $22.72 x 100 = 10.03%),. Every potential percentage point counts!
As of February 1st, the portfolio's value sits at $2,516.33, with an annual income yield of 5.32%, still well above the portfolio's long-term goal of 4%!
Thanks for reading, and see you at the next update :)
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