Today I sold all shares of Shaw Communications Inc (SJR), the first time I've sold shares since I started DivGro. I have several criteria for selling shares, none of which applied to SJR. So, why then, did I sell SJR?
SJR is a monthly dividend payer with an 11-year streak of dividend increases. When I bought SJR in December last year, starting yield on cost was 4.3%. It has a solid 5-yr dividend growth of 12.24%.
 | When I started receiving the monthly dividend from SJR, I noticed that my online brokerage was charging me a trading expense fee of $2 per dividend deposit. A $2 fee shouldn't be a big deal, but if the dividend is only about $8 per month, $2 equals 25% of the dividend! In my view, 25% is a big deal! So, I'm selling SJR for a rather silly reason: the 25% fee irks me! If I could have invested ten times more money in SJR, the fee would have been 'only' 2.5%... |
Trading Summary
Dec 04, 2013
|
Bought 105 shares of SJR at $23.03 per share:
|
$
|
2,418.00
|
Mar 14, 2014
|
Sold 105 shares of SJR at $23.20 per share:
|
$
|
2,436.10
|
Capital gains:
|
$
|
18.10
| |
Dividends received:
|
$
|
33.03
| |
Trading expense fees:
|
$
|
8.27
| |
Net profit:
|
$
|
42.86
|
105 shares of SJR represent $115.50 of expected annual dividend income, which reduces DivGro's projected annual dividend income to $2,996.28.
My brokerage charges me if I reinvest dividends into BP so I stopped that. Also I own BNS, Canadian bank, but since it's not in a registered account, i.e. retirement account, I get hit with a 15% dividend tax. Actually thinking about it now it's not that bad. The tax for BNS just comes off the top instead of at tax time. Disregard the BNS issue, but the BP issue is a pain. It's only like $1 each payment but out of principle I don't reinvest the dividends.
ReplyDeleteI agree, a dividend tax is off the top is just paying taxes earlier. The fee is another matter, whether it is for reinvesting (as with BP), or for dealing with a foreign company-paid dividend.
DeleteBTW, I'm getting charged a similar fee for dividends from NTT. The difference is that NTT pays dividends twice a year, versus monthly.
Wow, highway robbery for folks with anything less than a couple thousand shares! I like the sell here, even if it was just on principle. A 25% haircut on the yield drastically changes the overall investment profile of the company as you'd require a higher growth rate to overcome that limitation.
ReplyDeleteOn a positive note, you've at least ended up with a net gain for the few months you were invested.
Yes, the net gain is nice! But I think I would have sold whether I had a net gain or not...
DeleteAs I mentioned above, the fact that SJR pays monthly dividends actually is the issue. I'm paying a similar fee for dividends received from NTT, but only semi-annually. In that case, the fee works out to be about 7%. Still an irritation, but not as big and frequent(!) as the SJR one...