Soaring Highs for Wal-Mart Stores, Inc.

Something exciting happened this past week.

Incase you missed it, Walmart’s stock jumped approximately 10% to $ 99.6 US per share on November 16, 2017. According to online sources, this jump was most accurately connected to Walmart’s third-quarter press release which showed how the company has performed from August to November.

Wal-Mart Stores, Inc. employs approximately 2.3 million people across the globe through Walmart US, Walmart International and Sam’s Club. The company has certainly grown from its humble beginnings in Arkansas under the entrepreneurial direction of Sam Walton. Today, Wal-Mart Stores, Inc. earns well-over $400 billion USD in revenue annually through their stores and online platforms.

According to the company’s third-quarter annual report, the company earned over $100 billion USD over the course of three months. Compared to last year, this is a performance improvement of approximately 4.2%.

Should investors buy stocks in Wal-Mart Stores, Inc? Well, the traditional advice is to buy low and sell high. Is Wal-Mart at a ‘high price’? Probably, given that the recent 10% climb has brought Walmart to its highest stock price ever. However, the dollar-cost-averaging approach would encourage investors to buy the stock anyways, even though it is likely to correct. The company is probably a sound investment because it earns hundreds of billions of dollars each year and has increased its dividend payout each year since 2012.

Thanks for reading & happy investing,

Your team at CanadianDough.

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Choosing an ETF

I’ve been fortunate enough to have some extra spending money left over from a trip to New York City. I suppose I could cash the American dollars at the bank and receive Canadian dollars, or I could use the American dollars to buy American stocks. I like that option a lot because the greenback has been appreciating in value and American stocks continue to go strong.

I’m deciding on buying an ETF this time around. I think an ETF is great, especially one that tracks the S&P 500, because they would let me ride the wave that is the American stock market. Over at least the past 30 years, the S&P 500 has managed to grow at an average rate of 12% per year. Plus investing in an ETF that tracks this index is like investing in the whole stock market. I have faith in what major investors have said in the past, that the American stock market will continue to grow over time. I would expect some years to be better or worse than others, but if I can find a way to make extra money without having to touch my stock portfolio, it should pan out well.

I’ve narrowed my search of ETFs to three: OEF, SPY and IVV. I like OEF because it is the most affordable ETF out of the three, but it also has the highest expense ratio, which I think, means it actually costs the most to own. However, IVV and SPY are close in their price, but they’re expense ratios are slightly different even though they seem to have the same holdings. Also, they both pay dividends every three months (roughly $1 USD per share). The expense ratio of SPY is about 0.09% and the expense ratio of IVV is 0.04%. According to online sources, this means that 0.09% or 0.04% of the funds total assets will be used to cover expenses. So when you buy $100 worth of shares, a percentage of that will be used to cover expenses. If that’s accurate, I suppose that means an investor only pays the expense ratio when they buy their shares. Correct me if I am wrong.

Since the IVV and SPY seem very close but only differ in their expense ratios, I will likely move forward with IVV. Wish me luck!

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RBC Publishes 2016 Annual Report

Today I received Royal Bank’s 2016 Annual Report in the mail. I skimmed over the CEO’s letter to the shareholders, which seemed optimistic yet admitting to the various economic challenges the company faces.

Then I got to the financial reports. According to the financial highlights, RBC managed to earn roughly 8.7% more in 2016 than it did in 2015. Totalling $38.4 billion dollars in revenue, RBC can surely call itself an economic powerhouse. Of that $38.4 billion, RBC manages to retain $10.4 billion in profit, which is good news for shareholders. With profit increasing from 2015 to 2016 by 4.3%, investors can hope for a continuing increase in dividends in 2017. Impressive as their earning power is, their ability to attract and sustain wealth is even more impressive. As of 2016, RBC has $526 billion in assets under management.

Part of the reason why RBC is able to earn such an enormous amount of money is surely because of the people they employ. My own experience at RBC has always been pleasant, with courteous service at every branch I’ve visited. With 1,400 branches and 75,510 employees RBC is surely making a lasting impression on North America and beyond.

Dough in The Royal Bank of Canada!

The Royal Bank of Canada, or RBC, is Canada’s largest bank with seventy-eight thousand employees and twelve-hundred branches that are serving approximately ten million Canadians. According to the Globe and Mail, RBC is Canada’s largest company by market capitalization (total value of shares outstanding) and revenue (total sales). RBC is a seriously big company.

RBC shares are traded on the Toronto Stock Exchange, New York Stock Exchange and Swiss Exchange under the symbol RY. According to publicly available information, RY is currently trading at $89.25. Over the past 52-weeks, RBC’s highest stock price has reached $90.00 and its lowest price has dipped to $64.52. If an investor would have bought RBC closer to it’s lowest point, they would currently be enjoying handsome returns. The rise in the price of a stock is called capital appreciation; although an investor may have the opportunity to enjoy capital appreciations, RBC offers more.

A dividend is a payment made by a corporation to its shareholders, usually from their profits. RBC currently offers a dividend of $0.83 per share and it is paid four times per year, or quarterly. This means that for every share of RY that an investor owns, they will be paid $0.83 this November 24th, 2016. RBC’s dividend payments have increased over the years and throughout this quarter. For example, in November 2000, the dividend payment was $0.15 per share. In November 2010, the dividend payment was $0.50 per share. Throughout 2016 the dividend payment has increased. In February 2016, the dividend was $0.79 per share; in May 2016 it was $0.81 per share. Now, it’s $0.83 per share. Investors like to see an increase in the dividend as it shows that the corporation’s profits have been increasing over time.

My experience with RBC over the past three months has been fortunate. I bought RY when it was listed around $82.27; now it’s listed at $89.25. I have earned a return of approximately 8.48% which is a growth rate that is nearly 17-times stronger than RBC’s High Interest eSavings account which gives investors a return of 0.500%.