On April 7th, I purchased 50 shares of Alaris Royalty (TSE: AD) to The Dividend Beginner’s portfolio. I purchased the shares at $29.22, with a trading cost of $6.95 for a total investment of $1,467.95.
This is my third time purchasing shares in Alaris Royalty Corp., and I’m incredibly happy and fortunate to be able to do so. I originally purchased 60 shares of AD in November 2015 for $24.80 per share, then later averaged down in January 2016 by purchasing 60 shares at $22.00; and after my investment had increased over 25% I decided I would add even more as I believe the company is poised for a whole hell of a lot of growth going down the line. Their dividend is incredibly generous and they have a very high profit margin on their royalty business. I now own 170 shares of Alaris Royalty, with a market value of $5,152.70, which accounts for around 14% of my dividend growth portfolio.
Below is a summation of my purchases in what-is-now my largest investment, Alaris Royalty.
|April 7 2016||50||$29.20||$1466.95|
|Jan 15 2016||60||$22.00||$1326.95|
|Nov 9 2015||60||$24.80||$1494.95|
Average Cost Basis Increased
Based off my original two purchases, my previous average cost basis was $23.40 per share. My new purchase price of $29.22 is 24.87% higher than my previous average. This also means that on my previous investment, the value has increased by 24.87% – my second largest gainer, after National Bank of Canada (NA).
Considering I believe in the future of the company, and have been building up this position since last November and it has done well, and the company has continued to acquire more partners, I’m comfortable investing more and don’t feel it’s a bad decision in any way.
My new average cost basis is now…
(60 shares * $24.80) + (60 shares * $22.00) + (50 shares * $29.20) = $4,268.00 / 170 shares = $25.11 per share
Yield on Cost Decreased
My incredibly high yield on cost for Alaris Royalty unfortunately drops a bit as a result of purchasing more shares at a higher price, but I’m unphased as it’s still such a large yield, the company consistently raises their dividend, and my annual dividend income increases as a result. The positives heavily outweigh the negatives in this transaction. My new yield on cost for Alaris Royalty is…
$1.62 dividend / $25.11 share = 6.45% dividend
Based on my first purchase point of $24.80, my yield on cost was 6.53%, then it was increased to 6.92%when I added to my position at $22.00, and currently stands at 6.45%, paid monthly. Still absolutely fantastic and very close to my original yield.
Annual Dividend Increased
While my yield on cost remains very close to it’s original entry point yield, my annual dividend has skyrocketed from Alaris Royalty, and it pays me a hefty sum each month.
My new annual dividend as a result of accumulating 170 shares of Alaris is…
170 shares * $1.62 dividend = $275.40 annual dividend a.k.a $22.95 monthly dividend
My previous annual dividend from IPL was set at (120 shares * $1.62 dividend) $194.4, so this marks an increase of 41.67%.
My new 50 shares of AD add $81.00 to my annual dividend income, or $6.75 per month. My increased stake in AD has increased my 12-month forward annual dividend income from $1613.12 to $1,694.12, an increase of 5.02%. My monthly average dividend income now stands at $141.18.
As you can see in my Goals page, based on my original plan, I was hoping to achieve a monthly income of $145 by the time I turned 24. In this case, I’m nearly 2 years ahead of my original plan due to this past year’s aggressive investing.
|Annual Dividend Income||$1613.12||$81.00||$1694.12|
|Monthly Dividend Income||$134.43||$6.75||$141.18|