5 stocks I want to buy more of in 2020
For ten years now, I’ve been a DIY investor, focused on buying and holding many dividend paying stocks for growing income.
Beyond the upcoming 5 stocks I want to buy more of in 2020 you can check out my 2010-2019 financial decade in review here.
I look forward to sharing my updated December 2019 results soon!!
Over the years, my bias has been to buy and own many Canadian dividend paying stocks for the long-haul. In doing so, I feel like I can participate in both the market lows (for cheaper dividend stock reinvestments) and market highs (for tax efficient (non-registered), tax-deferred (RRSP) or in some cases tax-free (thanks TFSA!) gains.
With a new year comes new investing opportunities. The end of 2019 and the start of 2020 offered a chance to assess my portfolio stock holdings in recent weeks and figure out what sectors (and therefore stocks) of our Canadian economy I should consider loading up on in 2020.
This post highlights 5 stocks I want to buy more of in 2020.
Our Canadian telco space is rather unique in that only a handful of players dominate the market: Telus (T), Bell (BCE), and Rogers (RCI.B).
Over the last decade as a DIY investor, I’ve focused on owning just Telus and BCE. In more detail, I like Telus as an aggressive play on our Canadian wireless industry. In recent years, Telus has inked a number of partnerships that should help their growth. Advances towards 5G technology and our population growth (with more wireless customers) should also drive stock prices higher (and provide more dividend raises).
I hope to add another 100+ shares of Telus to my portfolio to this year. That could be inside my Tax Free Savings Account (TFSA) with upcoming available contribution room.
Canadian telcos make up <5% of my total portfolio. I’m comfortable with any Canadian telco stock or dividend paying stock for that matter valued at 2-3% of my total portfolio value.
As an fyi, as a comparative for our communications sector allocation in Canada, here is a recent sector breakdown of our S&P/TSX Composite Index represented by ETF XIC:
Canadian National Railway (CNR)
Canadian National Railway (CNR) is in the rail transportation business, with a network of some 20,000 miles across North America. If you need to ship something across our continent, it’s probably coming via use of CN rail. In fact, the recent CN rail strike provided evidence that our economy relies mightily on that network to avoid losing hundreds of millions of dollars in delayed goods and services from any industrial bottleneck in any given day.
Furthermore, based on this dividend history, I have full confidence CNR will continue paying let alone increasing their dividends over time.
Canadian Apartment REIT (CAR.UN)
“Buy land, they’re not making it anymore.” – Mark Twain
CAPREIT is one of Canada’s largest real estate investment trusts, and they also own residential units beyond Canada’s borders. I like this type of built-in type of diversification from many of my Canadian stocks.
My collection of Canadian REITs currently make up just shy of 7% of my portfolio, where CAR.UN is just one of seven REITs that I own but the only REIT I’m currently unable to DRIP with my brokerage. So, I would be very happy to add a few hundred more shares of this stock for income and growth, and to reinvest all dividends paid with.
Through its acquisitions, including Florida-based TECO Energy, Emera (EMA) has been able to grow its presence in North America. That has translated to increased profits. Stronger profits are great for shareholders like me because it can mean more of the company’s cash can be diverted to paying down debt, fueling more acquisitions and of course my favourite, more dividend increases.
Here is the recent dividend growth of EMA:
Emera continues to grow as an energy leader with $32 billion of assets, who serves more than 2.5 million customers in Canada, the US and the Caribbean. With so much safe, clean, reliable energy depended upon by so many (growing) customers, I’m very confident in EMA’s long-term prospects.
Brookfield Property Partners (BPY.UN or BPY)
With nearly $200 billion (that’s a “b”) in assets to manage, this real estate behemoth as part of the Brookfield family of companies owns some of the most valuable real estate property in the world. The 7% dividend yield and likely more dividend increases to come in the future from BPY doesn’t hurt either!
Over the years, I’ve been adding to this position within my RRSP in particular, and I have no doubt I’ll be adding a few more hundred shares of this company this year.
Of note, BPY.UN is one of many inter-listed Canadian stocks you can buy and hold, whereby it also trades on the U.S. market. In fact, you might want to consider owning this stock to earn juicy U.S. dollar income from your Canadian stocks since BPY pays out their distributions in U.S. dollars.
More stocks to own in 2020?
Are there other stocks on my buy list for 2020? Absolutely. But these ones are at the top of my list for some built-in diversification beyond Canada’s borders and the fact I already have a healthy amount of Canadian banks and pipeline stocks from the energy sector in my portfolio at this time.
Although I have no intention of selling any Canadian stocks that I own, I want to diversify beyond from Canadian bank dividend stalwarts like Royal Bank, TD Bank and pipeline stocks like TC Energy (TRP) to ensure my stock allocation remains somewhat in sync with the S&P/TSX Composite Index (albeit with a few biases).
For the curious, I strive to keep my Canadian portfolio around the following sector allocations:
- >20% Canadian financials including banks but <30%.
- No more than 20% energy stocks including pipeline stocks such as ENB, TRP.
- Max 15% REITs. Ideally, probably about 10% is reasonable.
- 10-15% utilities. Although I’m a huge fan of renewable stocks.
- 5-10% communications; think BCE and Telus (see above) in Canada.
- and the rest from various sectors including materials and industrials; CNR being one holding of many.
As 2020 unfolds, I’m sure I will tell you what I buy and just as importantly, how much those purchases might have added to my existing income stream for some semi-retirement plans in the coming years.
Happy investing in 2020! See you here often next year!