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08 October

Model Portfolio - Pipelines and Utilities Sector

I allocated 10% of the income generation of the overall portfolio to Pipelines and Utilities, the same as the REIT sector. This means that of our $3500 yearly income $350 should come from Pipelines and Utilities. On the TSX there are a few pipeline companies. The more recognizable ones are Enbridge (which is actually a combination of a pipeline and utility company), Trans Canada (which is also a pipeline and utility combination). I have decided to include both of these in the model portfolio. I also chose to add a third company to the model portfolio in this sector, Emera which is mostly a power company that provides electricity to parts of Nova Scotia and Maine. The other small part of their business is fuel distribution and energy asset management (I think this is like Direct Energy in Ontario, they install furnaces and water heaters and do maintenance on them).

So since I am looking for $350/year out of this sector each of these three companies will have to pay $166.55/year. Enbridge (ENB on the TSX) currently pays a dividend of $1.15 a year, Trans Canada (TRP on the TSX) pays $1.28 a year and Emera (EMA on the TSX) pays $0.89/year. So the shares required for each stock to generate $116.55 a year are as follows (rounded to the highest whole share):

Enbridge: 102 (102*1.15 = $117.30)
Trans Canada: 92 (92*1.28 = $117.76
Emera: 131 (131*0.89 = $116.59)

In my next post on the Model Portfolio I will discuss the Energy sector.

Disclaimer: This model portfolio is intended for illustrative purposes only and should not be used as a guide for building your own portfolio. Before making any investment decisions you should do your own homework and consult with the appropriate financial professionals. I am not a financial professional.

posted at 08:52:06 on 10/08/06 by 0xCC - Category: Model Portfolio


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