Thursday, January 23, 2014
Replaced INTC with TU
I feel I was extremely lenient with INTC, probably more than I should have been. Time to move on.
I trust the management team here. Telus's CEO has a salary of $0 per year, instead he is compensated exclusively via stock. You have to be confident about the business you're running to do something like that. I'd like to see more executive compensation plans setup in this fashion since the interest of the CEO is therefore 100% aligned with shareholders. The payout ratio and debt levels are both reasonable for a telecom. Analysts expect solid EPS growth. The share price is in my buy zone. It has a 9 year dividend growth streak. People love their mobile phones and I don't see that trend changing any time soon. TU seems like a better fit for my portfolio than Intel.
These shares will provide me with about $98.55 annual income. Telus is Canadian and dividends are paid in Canadian dollars. Exchange rates will alter the amount I actually receive.
Core Position: No
Speculative Position: No
Expectations: Steady income; 5% annual dividend growth in Canadian $
Automatic Sell: Frozen dividend; dividend cut
Consider Selling: Business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations.