And it still has legs.
I bought shares at 28$ last year and let them increased thier value.
In march, given the strong perspectives I began to buy options instead, for a better leverage.
The trick is that given that stock has a boring history, the options was cheap with a low premium.
That is my better play on stock this year, an exceptional year.
With the 5 % dividend rate, I never considered this move as speculative. It was the easiest play this year. A strong niche, a high dividend, a boring (stable) history, strong perspectives by underlying companies (Lion, IGM, Wealthsimple). The risk was low.
What is laying ahead ?
- I red this morning that the Power group will cash 225 M$ from the share offering of Lumenpulse.
- They already disclosed that they will exited from many tech investments in the coming years, cashing millions$.
- At 40$ the dividend rate is still at 4,5%, higher than banks ( 3% to 4,3%).
- Great West is under the dividend limitations order from OSFI. Like for the banks, It's expected that this order will be cancelled in the coming months. That will add legs to GWO and POW and lead Power to increase its dividend too.
The path is clear to 45$......and the options are still cheaps.