Recent Changes To My Portfolio

I'm always on the lookout for new stocks to add to my portfolio to boost my returns. I found two stocks that I think would be great additions to my investments and have decided to purchase shares in both. The first stock I am adding when the market re-opens Tuesday morning is CapitalSource, Inc. (ticker symbol CSE, NYSE). CSE is a beaten down financial stock that has suffered, in my opinion unjustly so, along with other financials during the sub prime mortgage crisis. There are a few reasons why I like this stock. With the recent price per share of $16.44 and an annual dividend of $2.40, the stock has a dividend yield of over 13%. During my research, I have read only good things about the management team and I really like the fact that insiders hold over a 30% stake in the company so they have a vested interest in the future of the company. While they do hold some residential mortgages, these are of the highest quality (no sub prime) and should perform well for the business. As if the dividend yield and good management were not enough to justify investing some money here, the current price is well below the 52 week high of $27.40, so there is room for price appreciation as well. I've already placed an order with my brokerage and expect to have some good results with this one.

The second stock I'm considering is CEMEX a Mexico based cement company. While the dividend yield on this one is not as attractive, I really like the fact that the company is retained a good portion of earnings for future expansion. They are truly an international corporation, with operations in over 50 countries worldwide. Add to this their near monopoly status in the cement business in Mexico and I think the future prospects for this company are very good. They have shown a knack for expansion through aquisitions and have very effective systems in place for keeping costs down. For my personal portfolio, this stock will be more of a growth play, but I will still benefit from current dividend payouts.

I didn't have quite enough cash to purchase shares in both of these companies, so I reviewed my current stock holdings and decided to sell my stakes in a utility company, which is currently having some accounting issues, and a couple of Canadian energy trusts. Although the CanRoys have been great performers (one of them doubling in price in less than a year, along with great dividend yields), I decided to limit my exposure to one energy trust and sell the others. I purchased shares in 4 different energy trusts last year when the prices were beaten down after the Canadian government passed unfavorable new tax legislation. Since the new taxes weren't set to take effect until 2010 (and may actually be overturned before then) I figured I could make some money off of the yields in the mean time. I have done quite well with these and will continue to hold my remaining stake in Pengrowth Energy Trust (PGH) which I consider to be the best of the 4 that I owned.

I believe these changes will further diversify my portfolio by investing in a multinational and help boost my dividend income as well. As always, before you invest in any of the stocks I write about here, I would recommend that you do your own research and decide whether these stocks are right for you.