For a description of Portfolio Goals and Process, see this post. For a description of the initial portfolio, see this post.
The markets at close on Friday, January 4, 2019:
| Market | Value | Change | 2017 Close | 52 wk High | Off 52 Wk H | Change % | Market |
| S&P TSX Composite | 14,426.62 | 204.62 | 16,209.13 | 16,586.46 | -2159.84 | -13.02% | Correction |
| S&P/TSX Venture | 587.44 | 35.35 | 850.72 | 939.66 | -352.22 | -37.48% | Bear |
| Dow Jones Industrial | 23,433.16 | 357.67 | 24,719.22 | 26,951.81 | -3518.65 | -13.06% | Correction |
| NASDAQ | 6,738.86 | 154.34 | 6,903.39 | 8,133.30 | -1394.44 | -17.14% | Correction |
| Standard & Poors 500 | 2,531.94 | 46.56 | 2,673.61 | 2,940.91 | -408.97 | -13.91% | Correction |
This is the second week in a row to show some green. The week was split between 2018 and 2019, so perhaps it is a sign of what is to come. While the Venture exchange is still in a correction, the NASDAQ has moved back into correction territory.
Split shares were also sporting some green this week as 20 were up and two were down. Many had gains exceeding 20 cents per share this week. Three had no change, they are three of the most lightly traded split shares, XMF.A, TXT.UN, and YCM.
Gainers/losers for the week ending January 4
| Symbol | Price | Change |
| TSE:ENS | $11.47 | $0.67 |
| FFN | $4.67 | $0.46 |
| OSP | $2.48 | $0.46 |
| TSE:FTN | $5.81 | $0.42 |
| XTD | $5.95 | $0.40 |
| DFN | $7.96 | $0.39 |
| LCS | $2.85 | $0.34 |
| LFE | $2.32 | $0.31 |
| SBN | $5.11 | $0.30 |
| TSE:GDV | $8.70 | $0.25 |
| PIC.A | $6.45 | $0.23 |
| TSE:LBS | $6.66 | $0.22 |
| TSE:BK | $9.91 | $0.21 |
| TSE:DF | $3.50 | $0.21 |
| SBC | $11.58 | $0.12 |
| TSE:PRM | $12.33 | $0.12 |
| TSE:DGS | $3.58 | $0.05 |
| TSE:BSD.UN | $0.29 | $0.04 |
| WFS | $2.08 | $0.01 |
| FCS.UN | $3.11 | $0.01 |
| TSE:XMF.A | $0.13 | $0.00 |
| TXT.UN | $2.57 | $0.00 |
| YCM | $0.86 | $0.00 |
| FTU | $0.44 | -$0.02 |
| PDV | $5.40 | -$0.47 |
CSSI Index
The CSSI (Canadian Split Shares Index) is the total of what it would cost to buy one share of each Capital share currently on the market. It moved up for the second week in a row.
| Value | Change | Since 8/3/18 | Since 8/3/18 | Up | Down |
| $126.21 | $4.73 | -$54.77 | -30.26% | 20 | 2 |
| CSSI Index | CSSI Index Change | ||
| Max | $183.09 | Max | $7.97 |
| Min | $113.51 | Min | -$14.92 |
- The value of $126.21 is what it would cost to buy one share of each Capital share which is up $4.73 from last week, the second week in a row to move up after three consecutive weeks moving down
- The CSSI is down -$54.77 or 30.26% since August 3, 2018 when Middlefield listed ENS on the TSX
- Twenty split shares closed up from last week, while 2 were down
- The high since August 3, 2018 is $183.09 on August 24, 2018
- The low is $113.51 on Dec. 21
- The largest weekly increase is $7.97 for the week ended December 28
- The largest weekly drop is -$14.92 for the week ended December 21, with -$13.87 on October 12 and -$11.21 on October 26 as close followers
Summary of the last five weeks:
This Week's Prices and % off the Low
| Week | CSSI | Weekly | Weekly | Trailing 5 Weeks | Since 8/3/18 | Since 8/3/18 | |
| Ended | Value | Change | % Change | Change | % Change | Total | % Change |
| 12/07/18 | $138.11 | -$6.83 | -4.71% | -$9.02 | -6.13% | -$42.87 | -23.69% |
| 12/14/18 | $128.43 | -$9.68 | -7.01% | -$23.22 | -15.31% | -$52.55 | -29.04% |
| 12/21/18 | $113.51 | -$14.92 | -11.62% | -$34.53 | -23.32% | -$67.47 | -37.28% |
| 12/28/18 | $121.48 | $7.97 | 7.02% | -$21.48 | -15.03% | -$59.50 | -32.88% |
| 01/04/19 | $126.21 | $4.73 | 3.89% | -$18.73 | -12.92% | -$54.77 | -30.26% |
This Week's Prices and % off the Low
| Name | Symbol | Price | Yield | 52 wk low | % off low | Volume |
| Top 10 Split Trust | TXT.UN | $2.57 | 13.10% | $2.57 | 0.00% | 0 |
| Prime Dividend Corp. Class A | PDV | $5.40 | 14.67% | $5.19 | 4.05% | 6,799 |
| Big Pharma Split Class A | TSE:PRM | $12.33 | 10.02% | $11.60 | 6.29% | 800 |
| E Split Corp Class A | TSE:ENS | $11.47 | 10.46% | $10.45 | 9.76% | 8,180 |
| Brompton Split Banc Corp. | SBC | $11.58 | 10.36% | $10.37 | 11.67% | 6,579 |
| Premium Income Class A | PIC.A | $6.45 | 12.59% | $5.75 | 12.17% | 14,701 |
| TDb Split Corp | XTD | $5.95 | 10.08% | $5.10 | 16.67% | 8,920 |
| Canadian Banc Corp | TSE:BK | $9.91 | 13.93% | $8.40 | 17.98% | 9,200 |
| Global Dividend Growth Split Corp | TSE:GDV | $8.70 | 13.79% | $7.11 | 22.36% | 29,618 |
| Dividend 15 Split Corp. | DFN | $7.96 | 15.08% | $6.17 | 29.01% | 128,803 |
| Life & Banc Split Corp. | TSE:LBS | $6.66 | 18.02% | $4.93 | 35.09% | 83,302 |
Previously eliminated from consideration are: BSD.UN, DF, DGS, FFN, FTN, FTU, LCS, LFE, OSP, SBN, WFS, XMF.A and YCM. All have currently suspended distributions or have never made them. Since the focus of this portfolio is on income, when the portfolio can sustain itself certain suspended issues may be considered.
This Week's Buy
As a round was completed last week, this week the aim is to buy one of the four split shares needed to complete this round so that the income from each position is equal.
This week's buy is PRM, a product of Harvest Portfolios. The Portfolio of PRM is comprised primarily of the largest (as determined by market capitalization calculated in US$) Pharmaceutical Issuers in the Investable Universe.
For further background on PRM, see the PRM Profile.
The NAV coverage for PRM is standard among most split shares with a $15 threshold. The application of the $15 threshold varies, as some will pay if the NAV is $15 or greater and others will not pay if after doing so the NAV would be less than $15. PRM is the latter, i.e. no payment will be made if after such payment the NAV would be less than $15.
The NAV coverage is the highest among split share companies. It has varied within a fairly small range of 0.43 and at last NAV report was a quite healthy 2.75.
The NAV yield is the lowest among split shares that are currently above the threshold for making distributions. This means the NAV won't fall as much after a distribution and the fund doesn't have to generate as high a return to make the same distribution.
This week's buy will be 100 shares, or one board lot. This week's purchase will be made using the recent distribution from TXT.UN of $39.12 and $1,193.88 of new capital, with the cost of the portfolio rising to $55,956.
As a round was completed last week, this week the aim is to buy one of the four split shares needed to complete this round so that the income from each position is equal.
This week's buy is PRM, a product of Harvest Portfolios. The Portfolio of PRM is comprised primarily of the largest (as determined by market capitalization calculated in US$) Pharmaceutical Issuers in the Investable Universe.
For further background on PRM, see the PRM Profile.
Metrics on PRM as of January 4, 2019
| NAV | Price | Discount | Distribution | Yield | NAV Covrg |
| $13.74 | $12.33 | 10.26% | $0.10310 | 10.03% | 2.75 |
| Avg Price | $13.09 | Avg Yld | 9.47% | ||
| $A/B Avg | -$0.76 | Price @ Avg | $13.06 | ||
| PBAP | -5.82% | PAAY | 0.56% |
- At January 4, the discount was 10.26%. This is one of the few split shares that consistently maintains a discount to NAV
- $A/B Avg Above/Below Average. The price of $12.33 is $0.76 below the 2018 average price
- PBAP Percent Below Average Price. $12.33 is -5.82% below the average price. The more negative this number is, the better a buying opportunity it is, so -5.82% below the average suggests an entry point
- PAAY Percent Above Average Yield. The larger this number is, the better a buying opportunity it is. The current value of 0.56% suggests an entry point
| Price, NAV & Discount/Premium Range | |||
| 2018 | Low | High | Range |
| NAV | $13.01 | $15.15 | $2.14 |
| NAV Yield | 8.17% | 9.51% | 1.34% |
| Price | $11.90 | $14.12 | $2.22 |
| Disc/Prem | -13.15% | -4.16% | 8.99% |
| NAV Covrg | 2.60 | 3.03 | 0.43 |
The NAV coverage for PRM is standard among most split shares with a $15 threshold. The application of the $15 threshold varies, as some will pay if the NAV is $15 or greater and others will not pay if after doing so the NAV would be less than $15. PRM is the latter, i.e. no payment will be made if after such payment the NAV would be less than $15.
The NAV coverage is the highest among split share companies. It has varied within a fairly small range of 0.43 and at last NAV report was a quite healthy 2.75.
The NAV yield is the lowest among split shares that are currently above the threshold for making distributions. This means the NAV won't fall as much after a distribution and the fund doesn't have to generate as high a return to make the same distribution.
This week's buy will be 100 shares, or one board lot. This week's purchase will be made using the recent distribution from TXT.UN of $39.12 and $1,193.88 of new capital, with the cost of the portfolio rising to $55,956.
- It will bring the cost basis on PRM down from $13.18 to $12.90
- The yield on capital will rise slightly from 8.43% to 8.48%
- $10.30 monthly will be added to the income stream, an increase of 2.81%
- The average monthly potential income will rise to $536.28
- The current monthly income will rise from $366.97 to $376.97
- The average current monthly income of $376.97 is 30.57% of this week's purchase
- The initial goal is for the monthly income to cover at least one monthly purchase
- The portfolio is now composed of 48% of companies currently making distributions (12) and 52% of those suspended (13).
- In dollar terms, the active income is 70.29%, the suspended portion is 29.71%.
| After this week's buy: | |||
| Capital Invested | $53,358.26 | Holdings | 22 |
| Dist Reinvested | $2,597.74 | Share Count | 7,600 |
| Cost Basis | $55,956.00 | Full Positions | 9 |
| Cash on Hand | $0.00 | to Comp Rnd | $2,788.55 |
| Total | $55,956.00 | Suspended | 13 |
| Market Price | $41,498.00 | Cap Gain | 0 |
| Cash on Hand | $0.00 | Cap Gain+Dist | 2 |
| Portfolio Value | $41,498.00 | Cash Return | $2,597.74 |
| Potential Income | $536.28 | Cash Return % | 4.64% |
| Current Income | $376.97 | Cap Gain | -$14,458.00 |
| Income Increase | 2.81% | Cap Gain % | -25.84% |
| Yield on Capital | 8.48% | Total Return | -$11,860.26 |
| Yield on Cost | 8.08% | Total Return % | -21.20% |
| Yield at Market | 10.90% | This Week | $1,352.00 |
- Full positions is the number of positions at the target income for the current round. This round is now complete
- The value of $2,788.55 beside the label, "To Comp Rnd" is the dollar value required to complete this round of purchasing a full position of all current holdings such that the income from each would be roughly equal.
- Suspended is the number of Class A shares that are currently not paying, or have never paid, currently composed of BSD.UN, DF, DGS, FFN, FTN, FTU, LCS, LFE, OSP, SBN, WFS, XMF and YCM. The number of companies that have suspended the Class A share distributions has now exceeded the number that are actively paying.
- Cap Gain is the number of holdings that have a capital gain. Last week 0, this week 0, and the portfolio gained $1,352.00 this week. This is the second largest weekly increase since tracking began
- Cap Gain + Dist is the number of holdings that are above the cost basis when adding capital gains and distributions. Last week 0, this week 2. Distributions have only been sufficient to compensate for the loss in share price in the case of PIC.A and XTD.
- Even with $159.32 of the income currently suspended, $376.97 monthly on a cost basis of $55,956 equates to a yield of 8.48%.
- For dividend growth investors who target 5%, on a cost of $55,956 that equates to $233.15 monthly which makes this Income Factory's cash output 61.69% higher
There are a few approaches one could take when split share prices are down as they are now:
- Take it as a sale and go shopping. The yields are great. When the market recovers, one will recover their investment quickly with the high yields
- Give up on high yield and sell. When this approach is taken, those who do so often conclude high yield just isn't worth it. This may be so, and is why this blog will continue to monitor split shares to see if one can profit by holding and adding at the dips
Despite the paper losses in the Split Share portfolio, the Income Factory continues to crank out more cash than investing in the underlying stocks directly.
Despite the fact that there are more suspended than active in the portfolio, the portfolio started off the new year with a rise in income and a rise in portfolio market value. What will Mr. Market have for us this year?
