Goals, Algonquin, Watchlist & Canadian Compounders

My apologies for the jumbled format below, but in an effort to write at least one monthly entry, I’m choosing good-enough over perfection. 

Goals:

At the start of 2022, I set a goal to increase my forward dividend income by $4,600, while targeting
a dollar- weighted organic dividend growth rate of 5.0%. I’m proud to report that I overshot my goal, 

raising my forward dividend income by $5,300+, while achieving a 5.3% organic dividend growth rate.

 

I’m taking my foot off the gas a little in 2023, aiming to add $3,200 (now, a bit more than that
after Algonquin Power & Utilities cut their dividend in January 2023), to bring my expected total
dividend income to a milestone amount. I’d also like my dollar-weighted organic dividend growth
rate to exceed 5.0% again this year. If I can accomplish the $3,200 goal, I’d then focus on building
the compounding portion of my portfolio, and adding a broad ETF to my unregistered account.
For tax reasons, it no longer makes sense for me to grow forward dividend income so
aggressively while I’m still working.

 

Other Objective for 2023:

After reading Bill Perkins’ ‘Die With Zero’ last year, listening to some episodes of Ramit
Sethi’s ‘I Will Teach You to Be Rich’ podcast, and then consuming Morgan Housel’s ‘The
Art of Spending Money’ last week, I’ve been focusing on ways to convert money into
memories. I have difficulty spending money, often falling into analysis-paralysis, which
subsequently impacts my level of happiness. Choosing to spend on things my kids
might remember as they get older is a priority in 2023. A couple of quick examples
this month have been tickets for my son to see his first professional hockey game,
a Gatineau+ pass that has allowed me to bring my kids to an indoor skating rink over 

the holidays, and even grabbing lunch at a restaurant after spending the morning at
the Ottawa central experimental farm. Lastly, since the objective is about more than
making memories for my kids, I brought home some flowers for my wife, and after
using my pair of 30+ year old second-hand, cross-country skiis for the past three
years, I invested in a pair of brand new skis, that I’m planning to explore trails with
this year. Hoping that I can get better at converting money to memories over the
course of this year.

 

Algonquin Dividend Cut:

As mentioned above, and outlined on my ‘Investment Holdings’ tab, I have a position in Algonquin
Power & Utilities (TSX: AQN). With the 40% dividend cut, planned $1B of asset sales, and continued
pursuit of Kentucky Power, I’m not sure what my plans are with respect to the holding. My faith in
their management team is low, releasing another negative earnings estimate sure hasn’t helped, as
has the decision to continue to seek regulatory approval for their Kentucky Power acquisition.
Although, the latter simply might be mouth-service to avoid paying a walk-away fee if the
transaction doesn’t close by April (when they can walk away for a much lower payment).I’m
taking a wait and see approach in the short-term.

 

January 2023 Watchlist:

Texas Instruments Incorporated (NYSE: TXN) – Reading about how management has aggressively
retired shares, focused on operating profit and FCF generation, and thinks so thoroughly about
capital allocation has made me consider initiating a position in this stock. Of course, since I started
to track it, the stock has risen over 5%.

 

Brookfield Infrastructure Partners (TSX: BIP.UN) – Of all the Brookfield units, I like BIP’s mix of assets,
geographical diversification, and results the best. Although this is already one of my larger portfolio
positions, I’m still very comfortable adding more to it inside my TFSA. As potential buys usually do,
BIP has steadily risen through January 2023.

 

A&W Revenue Royalties (TSX: AW.UN) – With this being the only Canadian stock left in my RRSP, my
thoughts areto add to my position in A&W in my TFSA, and then wait a month to sell my position in
my RRSP. This would free up funds to invest in a U.S. stock in my RRSP (possibly Texas Instruments).

 

Waste Connections Inc (TSX: WCN) – An environmental company I’m considering adding to the
“compounder” portion of my portfolio.

 

Canadian Compounders

One of my aims for this blog is to always provide readers with something helpful. If you’ve come this far,
I thought you might enjoy this tweet from @long_equity with a list of the Canadian companies with the
most linear share price growth over the last 10 years.

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