New Milestone and New Stock Purchase

Celebrating new milestone
New Milestone 
Hey guys! I finally reached a new milestone. My investment portfolio is now worth over $70,000. This is just an insane number. I never had so much money in my life. When I first started investing in 2010, I had only a $1,000 as my start-up capital. Back then I did not contribute to my portfolio on regular basis. I would put some money here and there and there was a few years when I did not put any money at all.

In 2015 I decided to get serious about investing and contribute on monthly basis. This is when my portfolio started to grow. I was adding money and reinvesting dividends every month. In four years my portfolio grew from $20,000 to $70,000. I will continue to contribute every month for as long as my financial situation allows me.

Stock Purchase - TD Bank (TSE:TD)
On March 21, 2019 I purchased 15 shares of TD Bank for $74.94 per share. TD is the second biggest bank in Canada, serving over 10 million customers through more than 1,100 branches. This purchase adds $44.40 to my yearly dividends and I’m locking in 3.9% yield. Not the highest dividend yield, but TD Bank has the highest dividend growth rate compared to other banks like RY and BNS.

Top reasons why I picked TD over other Banks:
  • Highest Dividend Growth Rate – 11.48% for the last 5 years
  • Highest 5-Year Compound Annual Growth Rate (CAGR) – 7.4
  • US exposure
  • I personally do business with TD

My Favorite Banks
TD is not the only bank that I like. I also like Royal Bank because it’s biggest bank in Canada. But since I already have Royal Bank in my portfolio, I decided to start a new position in TD. Also, the TD’s ex-dividend date is sooner than RY, so it makes more sense to buy TD this month and RY next month.

How About BNS?
Bank of Nova Scotia or Scotiabank is the third biggest bank in Canada and the most international Canadian bank. BNS is very favored by investors because it has a higher dividend yield. That’s all good. I’m just not excited about Mexico and Latin America exposure. I prefer US exposure of TD Bank instead. BNS has the lowest dividend growth rate among TD and RY. Now that doesn’t mean that I will never own BNS. Things always change. For the time being, I want to grow my RY and TD positions before investing in BNS.

Next Purchase
I’m thinking to add Royal Bank next month as it will perfectly align with ex-dividend date.

Your Thoughts
That's it for today's update! Let me know what you think of TD and would you buy it for the long-run. Also, let me know what is your favorite bank and why? Take care!

The Cheapest REIT in Canada

At the moment, Morguard REIT (MRT.UN.TO) in the cheapest REIT in Canada. The stock is currently trading at 52% discount to its book value. The current stock price sits at $12.45, but according to their book value calculation, the company is worth $26 per share. Now, it doesn’t mean that you should buy the stock at 12.45 and expect the stock to jump to 26. There must be a reason why this REIT is discounted so much and today I decided to dig in and see what’s going on.

About Morguard
Morguard Real Estate Investment Trust is a closed-end trust listed on the Toronto Stock Exchange (TSX) under the symbol MRT.UN. The Trust had total real estate assets of $3.0 billion as at December 31, 2018.

The mandate of the Trust is to accumulate a Canadian portfolio of high-quality real estate assets – then actively manage the portfolio to generate steady, dependable returns for Unitholders, through a stable and increasing cash flow. This offers the potential for long-term capital appreciation.

Is it better to invest in real estate or in REIT?

I decided to write this post because it’s an interesting topic as more and more people looking for different ways to build wealth. Some people build wealth by investing in real estate, others build wealth by investing in stocks.

Just to be clear when I talk about real estate I’m talking about rental properties, and when I mention REIT I’m talking about Residential Real Estate Investment Trust.

Rental property
Rental property is not considered as your primary residence. Rental property is when you buy a property and rent it out. You become a landlord and you collect rental income from your tenants.

When you invest in REITs, you don’t own any properties, you only own units in that trust. REITs raise money by issuing units. Usually they raise millions of dollars to fund property acquisitions. They manage rental properties, collect rent and distribute profits to unit holders. Most REITs in Canada pay distribution / dividend every month.

So now you know the difference between real estate and REIT.

Let’s move forward.