While I know that the markets have pulled back this year, I have one investment that literally has a mediocre 2.90% annual rate of return (money-weighted) after 12 years. It doesn’t even account for any inflation so I am losing money big time really.
How can that be? It pays a generous yield and it has always DRIP. In fact, it reinvests fractional shares with Computershare. It’s so disapointing …
This is why I love using the ROR as a metric with my investments as it includes time as a factor. Today, at the current price, I am making hardly no money. Even after all the compounding. Factor in inflation and it’s a loser …
While many holdings are near the 52-week lows, I am still making money with many holdings. Actually, 65% of my holdings thrive from a ROR perspective. So, you could imagine why I am not thrilled about TC Energy. I don’t have much and I have been trying to sell them for a while, but still, what a poor investment …
Here are what good investments provide for a portfolio!
All TRP Transactions
Before we speculate on the return and why it doesn’t match what you may see in a graph, here are all the transactions.
My annual rate of return is based on my purchase price and not any hypothetical purchase price from a general stock graph adjusted for dividends. Whatever you do with any chart out there will give you what I call the “TRP Index” as opposed to my real TRP ROR. My ROR is based on the numbers below.
Computershare - TRP
| Transaction Date | Ticker | Action | Purchased Shares | Purchased Price | Total Shares | Amount Invested | Dividends |
|---|---|---|---|---|---|---|---|
| 31/10/2022 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $70.20 |
| 29/07/2022 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $70.20 |
| 29/04/2022 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $70.20 |
| 31/01/2022 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $67.86 |
| 29/10/2021 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $67.86 |
| 30/07/2021 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $68.57 |
| 30/04/2021 | TSE:TRP | DIV | 0 | $0.00 | 0 | $0.00 | $62.92 |
| 29/01/2021 | TSE:TRP | DRIP | 1.139 | $55.25 | 1.1389 | $62.92 | |
| 30/10/2020 | TSE:TRP | DRIP | 1.185 | $52.28 | 1.1851 | $61.96 | |
| 31/07/2020 | TSE:TRP | DRIP | 0.916 | $62.55 | 0.9165 | $57.33 | |
| 31/07/2020 | TSE:TRP | BUY | 4.796 | $62.55 | 4.7958 | $300.00 | |
| 30/04/2020 | TSE:TRP | DRIP | 0.817 | $64.80 | 0.8166 | $52.92 | |
| 30/04/2020 | TSE:TRP | BUY | 4.629 | $64.80 | 4.6294 | $300.00 | |
| 31/01/2020 | TSE:TRP | DRIP | 0.627 | $72.50 | 0.6266 | $45.43 | |
| 31/01/2020 | TSE:TRP | BUY | 4.138 | $72.50 | 4.1381 | $300.00 | |
| 31/10/2019 | TSE:TRP | DRIP | 0.637 | $65.23 | 0.6373 | $41.57 | |
| 31/10/2019 | TSE:TRP | BUY | 4.507 | $66.56 | 4.5071 | $300.00 | |
| 31/07/2019 | TSE:TRP | DRIP | 0.144 | $63.72 | 0.1438 | $9.16 | |
| 31/07/2019 | TSE:TRP | BUY | 4.614 | $65.02 | 4.6139 | $300.00 | |
| 31/07/2019 | TSE:TRP | BUY | 38.449 | $65.02 | 38.4493 | $2,500.00 | |
| 30/04/2019 | TSE:TRP | DRIP | 0.089 | $62.78 | 0.0889 | $5.58 | |
| 30/04/2019 | TSE:TRP | BUY | 4.683 | $64.06 | 4.6828 | $300.00 | |
| 31/01/2019 | TSE:TRP | DRIP | 0.026 | $54.35 | 0.0256 | $1.39 | |
| 31/01/2019 | TSE:TRP | BUY | 5.409 | $55.46 | 5.409 | $300.00 | |
| 30/10/2018 | TSE:TRP | DRIP | 0.028 | $48.93 | 0.028 | $1.37 | |
| 31/07/2018 | TSE:TRP | DRIP | 0.024 | $56.87 | 0.0237 | $1.35 | |
| 30/04/2018 | TSE:TRP | DRIP | 0.025 | $53.66 | 0.0248 | $1.33 | |
| 31/01/2018 | TSE:TRP | DRIP | 0.021 | $56.22 | 0.0212 | $1.19 | |
| 31/10/2017 | TSE:TRP | DRIP | 0.02 | $59.15 | 0.02 | $1.18 | |
| 31/07/2017 | TSE:TRP | DRIP | 0.019 | $62.68 | 0.0187 | $1.17 | |
| 28/04/2017 | TSE:TRP | DRIP | 0.019 | $62.36 | 0.0186 | $1.16 | |
| 31/01/2017 | TSE:TRP | DRIP | 0.017 | $62.31 | 0.0167 | $1.04 | |
| 31/10/2016 | TSE:TRP | DRIP | 0.017 | $60.15 | 0.0171 | $1.03 | |
| 29/07/2016 | TSE:TRP | DRIP | 0.017 | $60.26 | 0.0169 | $1.02 | |
| 29/04/2016 | TSE:TRP | DRIP | 0.019 | $51.90 | 0.0195 | $1.01 | |
| 29/01/2016 | TSE:TRP | DRIP | 0.019 | $47.77 | 0.0193 | $0.92 | |
| 30/10/2015 | TSE:TRP | DRIP | 0.021 | $44.13 | 0.0206 | $0.91 | |
| 31/07/2015 | TSE:TRP | DRIP | 0.018 | $50.45 | 0.0178 | $0.90 | |
| 30/04/2015 | TSE:TRP | DRIP | 0.025 | $56.25 | 0.0249 | $1.40 | |
| 30/01/2015 | TSE:TRP | DRIP | 0.022 | $57.68 | 0.0224 | $1.29 | |
| 31/10/2014 | TSE:TRP | DRIP | 0.023 | $55.24 | 0.023 | $1.27 | |
| 12/08/2014 | TSE:TRP | SELL | -23 | $55.59 | -23 | ($1,278.57) | |
| 31/07/2014 | TSE:TRP | DRIP | 0.225 | $54.35 | 0.2247 | $12.21 | |
| 30/04/2014 | TSE:TRP | DRIP | 0.236 | $51.12 | 0.2365 | $12.09 | |
| 31/01/2014 | TSE:TRP | DRIP | 0.237 | $48.54 | 0.2365 | $11.48 | |
| 31/10/2013 | TSE:TRP | DRIP | 0.241 | $47.15 | 0.2412 | $11.37 | |
| 31/07/2013 | TSE:TRP | DRIP | 0.237 | $47.58 | 0.2367 | $11.26 | |
| 30/04/2013 | TSE:TRP | DRIP | 0.226 | $49.33 | 0.2263 | $11.16 | |
| 31/01/2013 | TSE:TRP | DRIP | 0.222 | $47.58 | 0.2222 | $10.57 | |
| 31/10/2012 | TSE:TRP | DRIP | 0.231 | $45.26 | 0.2313 | $10.47 | |
| 31/07/2012 | TSE:TRP | DRIP | 0.227 | $45.66 | 0.2271 | $10.37 | |
| 30/04/2012 | TSE:TRP | DRIP | 0.156 | $43.35 | 0.1557 | $6.75 | |
| 30/04/2012 | TSE:TRP | BUY | 8.075 | $43.35 | 8.0746 | $350.00 | |
| 31/01/2012 | TSE:TRP | DRIP | 0.155 | $41.19 | 0.1549 | $6.38 | |
| 31/10/2011 | TSE:TRP | DRIP | 0.103 | $42.29 | 0.1029 | $4.35 | |
| 31/10/2011 | TSE:TRP | BUY | 4.729 | $42.29 | 4.7289 | $200.00 | |
| 29/07/2011 | TSE:TRP | DRIP | 0.056 | $39.50 | 0.0557 | $2.20 | |
| 29/07/2011 | TSE:TRP | BUY | 5.063 | $39.50 | 5.0629 | $200.00 | |
| 29/04/2011 | TSE:TRP | DRIP | 0.055 | $39.49 | 0.0552 | $2.18 | |
| 31/01/2011 | TSE:TRP | DRIP | 0.042 | $35.56 | 0.0425 | $1.51 | |
| 31/01/2011 | TSE:TRP | BUY | 1.364 | $36.66 | 1.3639 | $50.00 | |
| 29/10/2010 | TSE:TRP | DRIP | 0.011 | $36.83 | 0.0109 | $0.40 | |
| 29/10/2010 | TSE:TRP | BUY | 1.317 | $37.96 | 1.317 | $50.00 | |
| 29/10/2010 | TSE:TRP | BUY | 1.449 | $37.96 | 1.4487 | $55.00 |
It leads me to the following question …
What Is A Good Investment?
We usually have to compare apples with apples but unfortunately, a good investment for investor X is not the same as investor Y even with the same apple …
How many of you like TRP? Why do you like it? Are you surprise that after 12 years, I have a 2.90% annual ROR?
Since this blog is about dividend investing, some investors focus on the yield mostly to pay bills and fund travel while others focus on total return. Which is right isn’t up for debate unfortunately as it’s not what is best but what you need that matters.
So, back to the question, is TC Energy a good investment in my case?
For me, it’s not a good investment. The ROR is my compass today, and not the yield. Even with my income account, the ROR still rules. Even if I can’t get good income with a 20% ROR, I still expect an ROR matching the bank when I focus on income. The banks are my baseline and they have an ROR above 10% with an approximate yield of 4%.
Income investors are probably struggling here as the yield is one of the most important metric for them but capital preservation is also important and in the case of TRP, it’s struggling to keep up … Once you start using the dividends, your ROR will drop.
As mentioned, I don’t have much in TRP. I have been trying to sell it and I have just been too lazy to deal with the share certificates (yes, the paper certificate). I am doing to deal with that in 2023 :)
Is It An Opportunity?
The flip side to this situation is to understand if it’s an opportunity?
You could just say that it’s time to buy more?
I don’t think so … When I have a good performing stocks like the first table pulling back to 52-week lows with an attractive yield (vs 5-year historical) than I can add. A good dividend screener can help find opportunities like that.
In this case, it’s adding money to a loser. I have been there where I sold my winners to rebalance only to add to losers … That approach was just a big investment mistake. I learned that you don’t have to lock in profit with great investments, they just keep on rolling. So you just let them ride.
The 2021 annual report lists a 12% annual return, conveniently originating from the year 2000. My investment began a little before then, so my ROI is OK by the decades. However, with the under-performance of the last years, I lightened way up on it. I agree that past performance needs monitoring, and your experience makes continued investment a question.
Thanks for your comment Clarence.
Indeed, the time of someone’s first investment does matter. I see it with Apple as I have it in a couple of accounts and one of them I go lucky with the purchase price and I have a great ROR compare with the other one in the other account.
Thank you for this. I’m still new to the dividend investing world.
I’m unclear on the formula you are using to calculate your ROR. Please share.
Here’s a hypothetical that might help me …
You buy 100 shares of stock ABC at $10. It has yield of 3%.
You’ve hold it for 4 years.
The stock price increases to $20.
What is the ROR by your definition?
Thanking you in advance.
Hello Adele,
The ROR is simply calculated using the XIRR formular in Google Sheet. It’s the money-weighted approach to calculating a annual rate of return.
The way to calcuate the ROR in your example needs all the date for the purchase price and dividend and then you let XIRR calculate it for you.
If you go into your broker, you should have access to your Annual ROR for your portfolio or account as it is now mandated but they don’t do it per holdings. This is why I go a step further in my case.
Thank you!
Hi, great post. I can sympathize with you, I do not own TRP and do not think it is a good investment because of the ROR. I have had other “investments” which I have held for years and lost lots and sometimes all the money I had put into the stock. Fortunately I do not put all my eggs in one basket. I do try to review my holdings at least a couple times a year and if they have not given me a true ROR of about 10% a year they get the boot from my portfolio, IF there isn’t a good reason for the poor performance. I also have a spreadsheet which I make the daily price entry of stocks I own and those I am interested in possibly buying. I have the spreadsheet set up so it gives me the weekly, monthly, annual change and the change from purchase price. A bit of work but I can keep on top of any changes in my portfolio.
Thanks for your comment Dave!
Glad to hear someone else goes the extra mile with tracking the details. It’s too bad the financial institutions just don’t provide all those numbers.
TC energy imo. is a buy now. Up 5.5% in the last week with a 6.3% yield. Probably see more buying opportunity ity after earnings on Q4 with the keystone spill and clean up. Better then any GIC at list point.
Thanks
Brent.
Thanks Brent for your comment.
It really depends what you compare it with. If it’s a GIC then sure … but against other stocks I am not sure. As for the yield, only if you really really must just have income.
To me, none of what you mentioned are relevant as I need to grow my money and I want over 10% annual return like the banks. So the banks win.
So, if you’re down on TRP and the divs are not really relevant for u. You’re over half way to the wait to see how the new gas line will affect TRP? Guessing many of us holding in to see what can happen.
If u bail, bet u go to Canadian banks?
Hey Bob, thanks for your comment.
Unless you live from dividends only, which I am not as I still work, then total return actually plays a big role. I don’t need the yield of TRP today to pay bills. I can always switch to ENB, or TRP, when it’s time to retire. It will be the same income concept now or then.
So, I need to have my money work for me. So my metric is my total return and if I don’t make money, I move on.
I see it this way, I bought it recently at their 52 weeks low. This stock, if you look at their 10 year chart goes up and goes down…well just like any stock. Historically, their normal P/OCF (Price per Operating Cash Flow) is 8.11 in the last 20 years….right now it’s at around 6,33…the moment it gets back to 8.11, I will simply sell it.
I know you preach buy and hold forever stocks, in my case, it depends on the company in my portfolio. Non growers like this, I just buy them at their lows and wait for the reversal…so unless this stock just keeps dropping non stop for the next 10 years, I personally do expect them at some point to go back up and when that happens, that’s when I sell and take profit.
In my portfolio, I list my companies in two cvategories, buy and hold forever stock and the buy low, sell high stocks….this along with my Bank of Nova Scotia are not my buy and hold forever…they are part of “I bought them at their lows and I expect sometime between now and 10 years for them to go above their current price”.
If you are a buy and hold forever investor on all of your stocks, then yes, I do agree, TRP shouldn’t be in your portfolio.
Indeed. That’s a different investing approach though. Something like “value” investing.
Not all stock flow the way you describe though… A lot of my US holdings have been going up and up and up … I would prefer not play the take your profit game. I did that with Apple in 2008 … that was a mistake.
I am a bit confused as to why your ROR is so low. Perhaps just the time frame? I bought TRP just over 20 years ago for $25.00. Never dripped because it is part of income portfolio but even still, average annual return is about 6.5%. With dripping it could have been 8.5%. If purchased more recently, returns would no doubt be lower.
I was interested that you bought BNS in your corporate account a few years ago and are now selling it. It is by far the worst performer of the big banks. 5yr Total Return of 2.4%! (8-9% over15-20yrs) I again have held this for a long time, and because of high capital gains earlier on, now (because of CGs) expensive to dispose of :(
At the time of writing that post, my ROR was literally that low. Now, it’s only because I track my ROR that I can really focued on optimizing my holdings but no brokers do that specifically so I would be curious how you are actually calculating your TRP ROR :)
As for BNS, I made a couple of plays around low PE and it was BNS and GWO. I had no intention to hold for very long … GWO bounced and we know where BNS is at …