For a description of Portfolio Goals and Process, see this post. For a description of the initial portfolio, see this post.
| Market | Value | Change | 2017 Close | 52 wk High | Off 52 Wk H | Change % | Market |
| S&P TSX Composite | 13,935.44 | -659.63 | 16,209.13 | 16,586.46 | -2651.02 | -15.98% | Correction |
| S&P/TSX Venture | 530.20 | -25.18 | 850.72 | 939.66 | -409.46 | -43.58% | Bear |
| Dow Jones Industrial | 22,445.37 | -1,655.14 | 24,719.22 | 26,951.81 | -4506.44 | -16.72% | Correction |
| NASDAQ | 6,332.99 | -577.67 | 6,903.39 | 8,133.30 | -1800.31 | -22.14% | Bear |
| Standard & Poors 500 | 2,416.63 | -183.32 | 2,673.61 | 2,940.91 | -524.28 | -17.83% | Correction |
This is the third straight week all indicies are in the red. The TSX Venture moved further into a corrrection. The NASDAQ has joined the TSXV in a bear market.
Suprisingly, there was some green for Split Shares this week, as four of the twenty four tracked had gains. The gain for PDV is due to the consolidation of the Class A shares. There will be fewer shares outstanding, therefore the price should go up.
FFN and FTN took the biggest plunge as it was announced earlier in the week that they will not make distributions for the month of December, which were to be payable in January.
The gainers/losers for the week ending December 21:
| Symbol | Price | Change | Change % |
| PDV | $5.94 | $0.89 | 14.98% |
| FTU | $0.47 | $0.10 | 21.28% |
| PIC.A | $6.15 | $0.03 | 0.49% |
| TSE:BSD.UN | $0.35 | $0.02 | 5.71% |
| TSE:XMF.A | $0.13 | -$0.03 | -23.08% |
| FCS.UN | $4.00 | -$0.10 | -2.50% |
| YCM | $1.00 | -$0.15 | -15.00% |
| SBN | $4.95 | -$0.22 | -4.44% |
| TXT.UN | $2.60 | -$0.25 | -9.62% |
| WFS | $2.13 | -$0.32 | -15.02% |
| LFE | $1.82 | -$0.33 | -18.13% |
| TSE:DF | $2.75 | -$0.51 | -18.55% |
| LCS | $2.22 | -$0.53 | -23.87% |
| OSP | $1.11 | -$0.69 | -62.16% |
| XTD | $5.29 | -$0.70 | -13.23% |
| TSE:ENS | $10.80 | -$0.75 | -6.94% |
| DFN | $6.63 | -$0.90 | -13.57% |
| TSE:PRM | $12.00 | -$0.90 | -7.50% |
| TSE:DGS | $2.96 | -$0.94 | -31.76% |
| TSE:GDV | $8.40 | -$1.05 | -12.50% |
| TSE:LBS | $5.27 | -$1.05 | -19.92% |
| SBC | $10.66 | -$1.17 | -10.98% |
| TSE:BK | $8.98 | -$1.27 | -14.14% |
| FFN | $3.30 | -$1.58 | -47.88% |
| TSE:FTN | $3.60 | -$2.52 | -70.00% |
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.
| CSSI Index | CSSI Index Change | ||
| Max | $183.09 | Max | $4.88 |
| Min | $113.51 | Min | -$14.92 |
- The value of $113.51 is what it would cost to buy one share of each Capital share which is down -$14.92 from last week
- Four split shares closed up from last week, while 20 were down
- The CSSI is down -$67.47 or 37.28% since August 3, 2018 when Middlefield added ENS to the TSX
- The high since August 3, 2018 is $183.09 on August 24, 2018 the low is now $113.51
- The largest weekly increase is $4.88 for the week ended September 21
- 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
The CSSI the last five weeks
| Week | CSSI | Weekly | Weekly | Trailing 5 Weeks | Since 8/3/18 | Since 8/3/18 | |
| Ended | Value | Change | % Change | Change | % Change | Total | % Change |
| 11/23/18 | $142.96 | -$5.08 | -3.43% | -$14.62 | -21.01% | -$38.02 | -21.01% |
| 11/30/18 | $144.94 | $1.98 | 1.39% | -$1.43 | -19.91% | -$36.04 | -19.91% |
| 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% |
This Week's Prices and % off the Low
| Name | Symbol | Price | Yield | 52 wk low | % off low | Volume |
| Canadian Banc Corp | TSE:BK | $8.98 | 15.37% | $8.98 | 0.00% | 48,004 |
| TDb Split Corp | XTD | $5.29 | 11.34% | $5.29 | 0.00% | 3,095 |
| Faircourt Split Trust | FCS.UN | $4.00 | 18.00% | $4.00 | 0.00% | 150 |
| Top 10 Split Trust | TXT.UN | $2.60 | 12.95% | $2.60 | 0.00% | 100 |
| Dividend 15 Split Corp. | DFN | $6.63 | 18.10% | $6.60 | 0.45% | 344,718 |
| Brompton Split Banc Corp. | SBC | $10.66 | 11.26% | $10.60 | 0.57% | 38,300 |
| Life & Banc Split Corp. | TSE:LBS | $5.27 | 22.77% | $5.23 | 0.76% | 264,242 |
| E Split Corp Class A | TSE:ENS | $10.80 | 11.11% | $10.64 | 1.50% | 12,800 |
| Global Dividend Growth Split Corp | TSE:GDV | $8.40 | 14.29% | $8.25 | 1.82% | 6,700 |
| Big Pharma Split Class A | TSE:PRM | $12.00 | 10.30% | $11.64 | 3.09% | 1,500 |
| Premium Income Class A | PIC.A | $6.15 | 13.20% | $5.87 | 4.77% | 20,870 |
| Prime Dividend Corp. Class A | PDV | $5.94 | 13.33% | $5.01 | 18.56% | 600 |
Previously eliminated from consideration are: BSD.UN, DF, DGS, FTU, LCS, LFE, OSP, SBN, WFS, XMF.A and YCM. All have currently suspended distributions or have never made them. When the portfolio can sustain itself, certain suspended issues may be considered. This week, FFN and FTN join the list as they both dropped below the $15 NAV threshold according to the mid month NAV report from Quadravest.
This Week's Buy
Due to an overweight position in BK, this week's buy is XTD, a product of Quadravest. XTD invests exclusively in shares of the Toronto Dominion Bank. Even though FFN and FTN are at all time lows, for this portfolio the buys will continue to be those split shares that are still making distributions. Perhaps next week or in the new year some more FFN and FTN can be picked up as the prices may even go a bit lower.
For further background on XTD, see the XTD Profile
Metrics on XTD as of December 21, 2018
| NAV | Price | Premium | Distribution | Yield | NAV Covrg |
| $5.13 | $5.29 | 3.12% | $0.05000 | 11.34% | 1.51 |
| Avg Price | $6.54 | Avg Yld | 9.19% | ||
| $A/B Avg | -$1.25 | Price @ Avg | $6.53 | ||
| PBAP | -19.12% | PAAY | 2.16% |
- At December 21, the premium was 3.12%. This is one of the few split shares that swings from discount to premium
- $A/B Avg Above/Below Average. The price of $5.29 is $1.25 below the 2018 average price
- PBAP Percent Below Average Price. $5.29 is 9.19% below the average price. The more negative this number is, the better a buying opportunity it is, so -9.19% 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 2.16% suggests an entry point
| Price, NAV, Disc/Prem & NAV Coverage Range | |||
| 2018 | Low | High | Range |
| NAV | $5.13 | $7.23 | $2.10 |
| Price | $5.99 | $6.95 | $0.96 |
| Disc/Prem | -5.95% | 16.76% | 22.71% |
| NAV Covrg | 1.51 | 1.72 | 0.21 |
The NAV coverage for XTD is calculated slightly different from most, as the prospectus states that the NAV must be maintained at 125% ($12.50) of the value of the Preferred shares rather than the 150% ($15.00) that many other splits do.
The NAV coverage is quite good compared to other split share companies. It has varied within a fairly small range of 0.21 and at last NAV report was a quite healthy 1.51.
This week's buy will be 200 shares, or 2 board lots. This week's purchase will be made using $80.31 of recent distributions and $977.69 of new capital, with the cost of the portfolio rising to $53,502.
- It will bring the cost basis on XTD down from $6.42 to $6.04
- Due to the suspension of distributions of FFN and FTN, the yield on capital will fall from 9.4% to 8.39%
- $10 monthly will be added to the income stream, an increase of 2.55%
- The average monthly potential income will rise to $515.68
- Combined with the loss of income from FFN and FTN, the monthly income will drop $35.14 from $391.51 to $356.37
- The average current monthly income of $356.37 is 33.68% of this week's purchase
- The initial goal is for the monthly income to cover at least one monthly purchase
| After this week's buy: | |||
| Capital Invested | $50,943.38 | Holdings | 22 |
| Dist Reinvested | $2,558.62 | Share Count | 7,400 |
| Cost Basis | $53,502.00 | Full Positions | 14 |
| Cash on Hand | $0.00 | to Comp Rnd | $1,241.19 |
| Total | $53,502.00 | Suspended | 13 |
| Market Price | $38,890.00 | Cap Gain | 0 |
| Cash on Hand | $0.00 | Cap Gain+Dist | 0 |
| Portfolio Value | $38,890.00 | Cash Return | $2,558.62 |
| Potential Income | $515.68 | Cash Return % | 4.78% |
| Current Income | $356.37 | Cap Gain | -$17,298.00 |
| Income Increase | -8.98% | Cap Gain % | -32.33% |
| Yield on Capital | 8.39% | Total Return | -$14,739.38 |
| Yield on Cost | 7.99% | Total Return % | -27.55% |
| Yield at Market | 11.00% | This Week | -$3,744.00 |
- Full positions is the number of positions at the target income for the current round.
- The value of $1,241.19 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. Since this value includes non paying splits, the round will conclude before this value reaches zero.
- 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.
- Cap Gain is the number of holdings that have a capital gain. Last week 0, this week 0, and the portfolio lost -$3,744.00 this week. This is the largest weekly loss 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 0. Distributions have not been sufficient to compensate for the loss in share price.
- Even with $159.32 of the income currently suspended, $356.37 monthly on a cost basis of $53,502 equates to a yield of 7.99%.
- For dividend growth investors who target 5%, on a cost of $53,502 that equates to $222.93 monthly which makes this Income Factory's cash output 59% 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
- Take it as an opportunity for a quick capital gain. The variable here is the time frame. Will it be quick, or could prices hover at this level for several more months?
- Looking back, LCS, SBN, and DGS could have only been purchased once the monthly income was higher, as once a position suspends distributions it becomes a one step forward two steps back process. This can be remedied by only buying those split shares with much higher NAV coverage so that the income is more stable.
With FFN and FTN falling below the threshold $15 distribution threshold and also falling in price - both are trading below $5, they are certainly great buys for those who have no immediate need for income and believe the financial sector at least, if not the market as a whole will recover.
Since these are leveraged products, investors should be aware that both NAV and price will fluctuate, sometimes wildly as recent market events have shown. The high yield comes at a cost of high volatility in terms of market opinion of the value of the Income Factory. Income Factory investors willing to put up with the noise of varying prices - paying just enough attention to buy when great discounts are available - can do well.
There will be one more buy for 2018. Despite the red in the markets, and the heavy losses in the Split Share portfolio, the Income Factory continues to crank out more cash than investing in the underlying stocks directly.
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