Stock Sale: Morneau Shepell (MSI.TO)

Hey guys, just a quick update on the recent stock sale. This is my first sale of 2019. Those who follow me, know that I usually don’t sell stocks. I’m a buy-and-hold kind of guy. Anyway, today I sold my shares of Morneau Shepell, ticker MSI.TO. Morneau Shepell is an HR services company. They mainly provide consulting and employee well-being services. I sold the stock for the numerous of reasons that I will list below. 

Reasons for sale:
  • The stock trades at historically high P/E Ratio and P/B Ratio
  • They did not raise a dividend in a very long time
  • The dividend yield became too low to hold the stock
  • Profit margins are dropping from year to year
  • I have better investment opportunities in mind

I had a small position of 60 shares that I bought in March 2016. Back then I paid $14.85 per share and the dividend yield was about 5.4%. It was a pretty sweet deal. Since then the stock almost doubled in price and the yield have collapsed. Right now the dividend yield is under 2.8% which is too low for me. I can invest in any Canadian bank and get around 4% and have a stronger name in my portfolio. I sold the stock for $28.49 per share and booked $800 net profit. The profit is tax-free of course because I’m invested inside my TFSA. With this sale I raised about $1,700 in cash and with new contribution and monthly dividends, I should have about $2,700 of new capital to invest.

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