Thursday, June 22, 2017

Debt Ratios

In order to judge is a stock has good debt ratios you have to have a feel for what is common for the sector the stock is in. In the chart below I am look at five different debt ratios. These are categorized by the sectors my stocks are in. There are not so much typical ratios for stocks, but typical ratios for stocks of the different sectors.

If you notice for Banks and Insurance under Financials, the Long Term Debt/Market Cap ratios are quite high. For this ratio, you generally want it at or less than 1.00, but Financials are quite different from other sectors in this regard.

For Liquidity Ratio, generally you want it to be 1.50 and above. Most, but not all sectors achieve this. In some sectors, the companies depend on cash flow to cover current liabilities. See the low ratios for Real Estate and Infrastructure Utilities. Note that most analysts do not consider this ratio at all for Financials.

For Debt Ratios (Assets over Liabilities) you again want the ratios to be 1.50 and above. However, banks are different. For banks the standard used to 1.04 and above. Most banks have now moved higher than 1.04. Insurance companies are similar to banks for this ratio.

Generally for Leverage or Assets/Book Value you look for a ratio that is under 2.00. However, the median for different sectors can be higher. Banks and Insurance companies have very high Leverage Ratios. Utilities can also have relatively high Leverage Ratios. For example, the median Leverage Ratio for my Power Utilities is 3.03.

The Debt/Equity Ratio is similar to the Leverage Ratio, but is lower. Generally here you want a ratio less than 1.00. However, it is generally higher in some sectors like Utilities. The financial also have very high Leverage and Debt/Equity Ratios.

Below is my chart on the median ratios for the different sectors. The column titles are: LTD = Long Term Debt, Debt/Market Cap Ratio; Liq = Liquidity or Current Assets / Current Liabilities; A/DB= Asset/Liability Ratio; Lev = Leverage Asset/Book Value; Dt/Eq = Debt/Equity Ratio. This can help you decide if a stock is out of line with the ratios of its sector.

Sub-Index C LTD Liq A/DB Lev Dt/Eq
Cons Discretionary C 0.23 1.91 1.86 2.10 1.10
Cons Staple C 0.11 1.54 1.87 2.21 1.21
Health Care C 2.73 2.12 1.90 0.90
Real Estate E 0.65 0.85 2.03 1.98 0.98
Bank F 8.23 2.20 1.07 16.37 15.37
Financial Services F 0.44 1.52 1.66 2.51 1.51
Insurance F 6.51 1.65 1.08 12.99 11.99
Construction I 0.15 1.39 2.09 1.96 0.96
Industrial I 0.19 2.78 1.79 2.49 1.49
Manufacturing I 0.21 2.02 2.30 1.66 0.66
Services I 0.23 1.43 2.02 1.93 0.93
Materials M 0.22 1.80 1.81 2.41 1.34
Energy R 0.35 1.28 2.03 1.97 0.97
Tech T 0.00 2.24 2.58 1.53 0.53
Infrastructure U 0.29 0.87 1.69 2.54 1.14
Power U 1.08 1.24 1.42 3.03 2.13
Telecom Services U 0.37 0.52 1.63 2.62 1.62


*C =Index code or type of stock. C=Consumer, E-Real Estate, F=Financial, I=Industrial, M=Materials, R=Resources, T=Tech and U-Utilities.

On my other blog I wrote yesterday about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more. Tomorrow, I will write about Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more on Friday, June 23, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, June 20, 2017

More is Not Better

More is not necessarily better, sometimes more is just more. People like my gravy. My secret is I put a pinch of mace in it. However, would you think that people would still like it if I put in more mace or lots of mace?

What people do not realize is that before capitalism, we did not have a sizeable middle class. In fact having a middle class is relatively new in history. For most of history there were just the few elites and everyone else.

Having some rules for a capitalistic market makes the market work better. Such things as the rule of law and standard weights and measures were very good for capitalistic markets. Actually these sorts of things are good for all sorts of market systems.

Look at the US. As it expanded government (and taxes) and brought in rules for business (starting in the 1930's) the middle class expanded. So the elected officials brought in more government and more rules were brought in. Sometime in the late 1970's the middle started to get smaller and the wealthy to get wealthier. See chart 2 in this article by John Mauldin at The Market Oracle.

I sometimes wonder if we really any longer have a capitalistic market system. We have governments that profess to want to protect people at all time from all things. Frankly I do not think that is possible. Companies are so heavily regulated that they need to have compliance officers.

This, by the way, works for the big companies that can afford to do this, but works against small companies that cannot. I read that in the US in 2016 was the first year when there were more company's going bankrupt that new companies.

We have very socialistic governments. We are piling on more and more rules trying to make people behave in certain ways and make the economy behave in certain ways. This does not seem to be working.

Somehow we trust our government bureaucrats implicitly, but we have no faith individuals, especially individuals that run companies. We think that they are all greedy, but bureaucrats are pure? (It would seem to be uncaring bureaucrats that lead to the fire in London. See the Associated Press article on CBC News. I bet no bureaucrat would face any consequences but if it was a private company, people would go to jail.)

Do not get me wrong about rules. Capitalism works best under rules. It is just at the present time our economy seems to be suffering because we have far too many rules. We are drowning in rules. Our taxes are so complex that most people cannot do their own taxes. This is stupid.

Maybe rules should get more basic and go more towards "if you sell something that makes people sick, you will be prosecuted and could end up with a fine or jail or both" rather than our current more minutiae rules where small companies need a compliance officer to ensure all rules are followed.

On my other blog I wrote yesterday about CI Financial Corp (TSX-CIX, OTC- CIFAF)... learn more. Tomorrow, I will write about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more on Wednesday, June 21, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, June 15, 2017

Investing Easy

Investing does not have to be difficult. I know that some ad try to say that doing it on your own is difficult and hard, but it does not have to be. Look around you and what do you see. There are big companies that you could invest in with little difficulty. Basically invest in big companies that pay dividends.

Invest in some of the big banks like Royal Bank or TD Bank. Invest in some of the big retailers like Canadian Tire that seem to be doing well. However, say away from department stores that do not seem to be doing well. The utilities of Enbridge Inc. and Emera Inc. are in the news. One is a pipeline and one produces power.

Look at lists of under the various sectors put out by the TSX. If you cannot get into the index from above link go to the TSX Main Link. Go with companies where you recognize by name. The TSX also has a Dividend Aristocrat Index. (You will have to scroll down their list of indexes to get to this one.) Again go with a company you recognize.

Probably the best investment new letter is The Investment Reporter which you can find here. You can often get an initial deal on this investment letter. They will also send you a free newsletter which might also help you. Also, stay away from any investment letter that promises too much. I mean the ones that promise high returns quickly or high dividend yields. Only the people who sell these investment letters get rich, you will not.

Investing in stocks is not a get rich quick investment. If you want to get rich investing it is takes a while. You need to get compounding working for you. Buy stocks when you can and reinvest your dividends. You can bit by bit build up a portfolio that is producing money for you.

The other important point is that you do not panic, especially when we hit a bear market. There are going to be bear markets. It is more important to track dividends paid rather than the stock price. For most stocks, they will continue to pay dividends and some even increase them in bear markets. So focus on dividends not stock price.

On my other blog I wrote yesterday about Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more. Tomorrow, I will write about Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN)... learn more on Friday, June 16, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, June 13, 2017

Success Long Term

There is a very interesting story about how one guy Russ Gremel paid $1,000 for shares in Walgreen 70 years ago. The shares are now worth $2.1M. See the story on blogger Dividend Growth Investor.

This is all very interesting, but this is not the way I would recommend to invest. He had no diversification at all. The problem is that even the best of companies can get into problems. The fact is that once solid good companies can go bankrupt.

On the other hand this certainly shows the power of compounding.

On my other blog I wrote yesterday about Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more. Tomorrow, I will write about Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more on Wednesday, June 14, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, June 6, 2017

Dividend Stocks June 2017

First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for June 2017.
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 40 stocks with a dividend yield higher than the historical average dividend yield
  • I have 64 stocks with a dividend yield higher than the historical median dividend yield and
  • 54 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January,
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 37 stocks with a dividend yield higher than the historical average dividend yield
  • I have 60 stocks with a dividend yield higher than the historical median dividend yield and
  • 55 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list in January 2014,
  • I had 9 stocks with a dividend yield higher than the historical high dividend yield,
  • I had 45 stocks with a dividend yield higher than the historical average dividend yield and
  • 39 stocks with a dividend yield higher than the 5 year average dividend yield.
If you had one share of each stock, total dividends last month would be $59.14. This month dividends would be $161.34. Of the stock that I follow 13 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

Bank of Montreal (TSX-BMO, NYSE-BMO)
Canadian Real Estate (TSX-REF.UN, OTC-CRXIF)
CI Financial (TSX-CIX, OTC-CIFAF)
Enbridge Inc. (TSX-ENB, NYSE-ENB)
Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF)

Keyera Corp (TSX-KEY, OTC-KEYUF)
Lassonde Industries (TSX-LAS.A, OTC-LSDAF)
Loblaw Companies (TSX-L, OTC-LBLCF)
National Bank of Canada (TSX-NA, OTC-NTIOF)
Onex Corp (TSX-ONEX, OTC-ONEXF)

Telus Corp. (TSX-T, NYSE-TU)
TMX Group Ltd. (TSX-X, OTC-TMXXF)
Sun Life Financial (TSX-SLF, NYSE-SLF)

Of the stocks that I follow no company has decreased their dividends. Of the stocks that I follow no company has suspended their dividends.

The name and symbol change of Wi-Lan (TSX-WIN, NASDAQ-WILN) has been changed to Quarterhaill Inc (TSX-QTRH, NASDAQ-QTRH).

Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 9.74% of the stocks that I follow. Three of these stocks never had dividends, so 7.79% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Kombat Copper Inc. (TSX-KBT, OTC-PNTZF).

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote today about Waste Connections Inc. (TSX-WCN, NYSE-WCN)... learn more. Tomorrow, I will write about IGM Financial Inc. (TSX-IGM, OTC-IGIFF)... learn more on Wednesday, June 7, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram with #walktoronto.

Thursday, June 1, 2017

Dividend Investing

You can have a nice income from stock dividends. However, you have to be prepared for the volatility of the underlying stock. The value of your stock portfolio will to up and down all the time. Sometimes the fall in the market can be a heart stopping 30 to 50%. However, if you have large dividend paying stocks, you generally do not need to worry about this.

What you need to worry about is if your stock cuts their dividends. Then you have to decide if the stock is worth holding or if it is time to sell it and more on. Another thing to worry about is if you stock goes down a lot, but the general market has not. Find out why and decide if the stock is still worth holding or if it is time to sell and more on.

Do not worry about the volatility of the market. If you stock is going up and down with the market or with the sector it is in that is not the time to worry. You only need to seriously review your stock if it is out of line with its sector.

On my other blog I wrote yesterday about Husky Energy Inc. (TSX-HSE, OTC- HUSKF)... learn more. Tomorrow, I will write about Goeasy Ltd (TSX-GSY, OTC-EHMEF)... learn more on Friday, June 2, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, May 30, 2017

Ensign and Mullen 2

I recently reviewed Mullen Group Ltd (TSX-MTL, OTC-MLLGF and Ensign Energy Services (TSX-ESI, OTC-ESVIF). I had Ensign before 2014 but decided to sell it and replace it with Mullen. Although they do not seem to be direct competitors, they both provide services for the oil and gas industry. The main reasons I liked Mullen better in 2014 was the great Liquidity Ratio. The original blog entry of 2014 is here

Since I have done further reviews of these companies, I thought I would compare them again. I must admit I still like Mullen better. I do like companies that increase their dividends. However, I like companies better than pay dividends they can afford. In the new chart below, I do not give Ensign any credit for increasing their dividends because they cannot afford them.

Even though Mullen has done better in growth (or really not as much a decline) I do not think I can give any points for declining growth. The problem still is that the oil and gas industry is not doing well currently because of the relatively low price of oil.

It has also been my experience that when companies have insider ownership, the debt ratios, especially the Liquidity Ratio, are good. This is not the case with Ensign.

The following chart is now slightly revised.

Item Ensign Pt Mullen Pt
Liquidity Ratio Below 1.00 (0.96) -1 8.28% 1
Other Debt Ratios Good 1 Good 1
Dividend Growth Company Stopped in 2015 To 2017, down 70% -1
Dividend Yield 7.74% 2.35%
5 year Median Dividend Yield 3.42% 4.76%
Dividend Payout Ratios -48.98%, 216.04% 5 year -1 121.15%, 112.55% 5 year -1
DPR for EPS 2017 -65.75% -1 61.02% 1
DPR for CFPS 2016 43.20% (over 40%) -1 33.74% (Better) 1
Dividend Growth 5 years 4.24% -9.89%
Dividend Growth 10 years 5.54% -6.36%
Dividend Increase 2016 0%, 0 in 2017 -47.50%
Could Cut Dividend Yes Further cuts unlikely
Total Return from 2014 -8.3%, L=12.9%, D 4.6% -7.67%, L=11.8%, D=4.2%
Revenue to end of 2015 -40.04% -15.00%
Revenue to end of 2016 -38.71% -24.63%
EPS to end of 2015 -247.83% -85.29%
EPS to end of 2016 44.12% 246.67% 1
CFPS to the end of 2015 -29.96% -9.93%
CFPS to the end of 2016 -42.40% -44.26%
ROE 10 years above 10% 4 years 5 years 1
ROE 5 years above 10% 1 year 3 years 1
ROE 5 year median 3.5% 10.5% 1
Comp Inc. ROE to Net Inc., lower lower
ROE Comp Inc. 5 yr. median 7.8% 10.5% 1
Survive low Liquidity Ratio Probably n/a
Survive Dividend Cut yes Yes
Insider Ownership Yes, Chairman 17.29% 1 Yes, Chairman 3.3% 1
Score -2 8

Below is my chart from my blog entry of 2014:

Item Ensign Pt Mullen Pt
Liquidity Ratio Below 1.00 -1 Very good 1
Other Debt Ratios Good 1 Good 1
Dividend Growth Company Yes 1 Yes 1
Dividend Yield 4.50% 5.64% 1
5 year Median Dividend Y 2.55% 4.44%
Dividend Payout Ratios Better 1
Dividend Growth 5 years Better 1
Dividend Growth 10 years Better 1
Dividend Increase 2014 Yes, 1 No, but scores for smart decision 1
Could Cut Dividend Possible -1
Total Return Better 1
Revenue growth Lately, Mullen Better 1
EPS to end of 2013 Better 1
EPS to end of 2014 Better, especial over past 5 years 1
CFPS to the end of 2013 Better 1
CFPS to the end of 2014 Better 1 But not by much 1
ROE 10 years above 10% Better 1
ROE 5 years above 10% Better 1
ROE 5 year median 8.2% Better 15.8% 1
Comp Inc. ROE to Net Inc., Higher, confirms EPS 1 same 1
ROE Comp Inc. 5 yr. median 8.7% 15.8%
Survive low Liquidity Ratio Possibly not
Survive Dividend Cut Yes
Insider Ownership Yes, Chairman 16.7% 1 Yes, Chairman 3.2% 1
Score 9 14

On my other blog I wrote yesterday about MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF)... learn more. Tomorrow, I will write about Husky Energy Inc. (TSX-HSE, OTC- HUSKF)... learn more on Wednesday, May 31, 2017 date around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, May 25, 2017

Dividend Stocks

Meb Faber writes some interesting articles on investing in dividend stocks. They are Dividend Growth Myth and What You Do Not Want to Hear About Dividend Stocks. For the first article you really have to scroll down to find the subject.

Yes, currently I have mostly dividend stocks and dividend growth stocks. I do believe in them. I am currently living off my dividends. And yes, I do have Canadian Banks which pay good dividends. However, when I was growing my portfolio I did not just go for dividend stocks and certainly not high yield stocks.

When I was growing my portfolio I was working so having high yield dividend stocks was fine in my RRSP account, but not in my trading account. In my trading account I had a mixture of median yield, low yield and no yield stocks. Today the vast majority of my stocks are dividend stocks. When building a portfolio your needs in stocks and dividends are different from when you are living off your portfolio.

On my other blog I wrote yesterday about Hardwoods Distribution Inc. (TSX-HWD, OTC-HDIUF)... learn more. Tomorrow, I will write about Ensign Energy Services (TSX-ESI, OTC-ESVIF)... learn more on Friday, May 26, 2017 around 5 pm.

Also, on my book blog I have put a review of the book The Story of the Jews by Simon Schama learn more...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, May 23, 2017

The Elmer Approach

Recently Ryan Goldsman sent me an email about a new site he was setting up called The Elmer Approach . I had cited him in some of my blogs when he had written articles for The Motley Fool.

On his site he talks about his approach to investing. He has a free book and a sample portfolio. You might find this of interest.

On my other blog I wrote today about Mullen Group (TSX-MTL, OTC-MLLGF)... learn more. Tomorrow, I will write about Hardwoods Distribution Inc. (TSX-HWD, OTC-HDIUF)... learn more on Wednesday, May 24 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, May 18, 2017

Beta Ratings

I have recently looked at the Beta Ratings for my stocks and for the stocks that I follow. Basically, if a stock has a beta rating of 1 it means that it moves with the market. If the beta is less than 1 then stocks price is theoretically less volatility than the market. If the Beta is higher than 1 that indicates that the stock price is theoretically more volatile than the market. See my spreadsheet here .

If a stock has a Beta of 1 it means that is an average risk. A Beta of 0 means the stock has zero risk. In the stocks I cover some have a negative Beta. With a negative risk you could expect less than a risk free return. A stock with a negative Beta would act like a hedge. They move in the opposite way of the market.

When I look at the Beta Ratings for the stocks I own the median Beta is 0.79, the highest is 2.14 which is Barrick Gold Corp. (TSX-ABX, NYSE-ABX) and the lowest is 0.01, which is Metro Inc. (TSX-MRU, OTC-MTRAF).

Category Beta
Median 0.80
Highest 2.14
Lowest 0.01


The stocks that I follow, including mine, the median is 0.74, the highest is 4.18, which is Penn West Petroleum (TSX-PWT, NYSE-PWE) and the lowest is -0.65 which is Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF).

Category Beta
Median 0.74
Highest 4.18
Lowest -0.65


A good place for information about stock betas is Investopedia. On his blog Aswath Damodaran talks about the implications of negative Beta Ratings. Dan Caplinger on Motley Fool talks about negative Beta Rating stocks. There is also a good discussion about this subject by Pat McKeough On TSI Wealth Daily Advice.

On my other blog I wrote yesterday about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more. Tomorrow, I will write about be Canadian Utilities Ltd (TSX-CU, OTC-CDUAF)... learn more on Friday, May 19, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, May 16, 2017

Portfolio for the Long Term

My portfolio tends to underperform in bull markets and outperform in bear markets. That means my portfolio never gets the great returns in the bull markets, but never gets the lows in the bear markets. It is less volatile. I think that over all I get a better return.

My portfolio does not mirror the TSX. The TSX is mostly banks and resources. I have the banks but I have less than 1% of my portfolio in resources. I never buy a resource stock for the long term.

Ben Graham I think certainly got it right for the individual investor. He said that the individual investor should act consistently as an investor and not as a speculator. I think that it is acting like a speculator that causes individual investors to lose money. It is not that I have not lost money on a stock; it is just that over all I have made money.

I make compounding work for me. For example, I bought Emera in 2005. On my original stock purchase after some 12 years I am making a dividend yield of 11% whereas the current yield is around 4.45%. Take the stock Fortis Inc. I bought stock some 21 years ago. On this stock I have a dividend yield on my original purchase of 23%. The current yield is 3.59%. I also bought Royal Bank some 21 years ago and I am making a dividend yield of 48% on my original purchase. Its current yield is 3.76%.

Banks are particularly good in having good dividends that grow well. But you also have to diversify. You cannot diversity in the Canadian market as much as you can in the US market, but we do have a variety of utilities, consumer and industrial stocks.

On my other blog I wrote yesterday about Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF)... learn more. Tomorrow, I will write about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more on Wednesday, May 17, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Thursday, May 11, 2017

If I Knew Then 5

Here I am going to talk about my adventures in stocks, or my early stock investments. I did relative well. Doing relatively well on my stock purchases gave me confidence to invest in stock and get rid of my mutual fund investments.

The first stock I bought was BCE (TSX-BCE, NYSE-BCE) on October 15, 1982. From the time I bought this stock until September 1987 I reinvested the dividends for more stock and make extra cash deposits. To be more consistent with the Mutual Fund investments, I looked at this stock's value in October 1998. This is a holding period of some 16 years. My total return on this was 13.31% per year with 8.79% per year from capital gains and 4.52% per year from dividends. Over the same time period the TSX index showed an increase of 8.1%% per year.

Because I started to track this stock in Quicken only in December 1987, I only have Quicken calculations from there to the present. Using Quicken from December 31, 1987 to April 30, 2017 I have a total return of 9.52% per year with 4.12% from capital gains and 5.40% from dividends. The thing with Quicken is that it takes care of the split off and my selling of Nortel and Bell Aliant. This is the total return over a 29 year period. Over the same time period the TSX Index return is 5.59% per year.

Another early stock purchase was Bank of Montreal (TSX-BMO, NYSE-BMO) which I bought on October 4, 1983. From the time I bought this stock until July 1987 I reinvested the dividends for more stock and make extra cash deposits. I looked at my return for November 30, 1998. This is a holding period of 13.6 years. My total return was 14.98% with 11.84% per year from capital gains and 3.14% per year from dividends. Over the same time period the TSX index showed an increase of 6.72%% per year.

I have only tracked this stock from December 1987 also in Quicken. So from December 31, 1987 to April 30, 2017 I have a total return of 15.845 per year with 9.64% from capital Gains and 6.20% from dividends. This is the total return over a 29 year period. Over the same time period the TSX Index return is 5.59% per year.

The third stock purchase I made was Labatt which I bought on October 4, 1983. I reinvested the dividends for more share in 1985. I had to sell this stock on July 28, 1995 as the company was bought out. My total return was 11.81% with 6.68% from capital gains and 5.13% from dividends. Over the same time period the TSX index showed an increase of 8.30%% per year.

This is the last of a series of blogs called "If I knew now". In February of 2017 I started this series saying that If I Knew Then when I started investing what I know now, I would have only invested in Canadian Dividend Growth stocks. My first entry was about investing in US stocks in the blog If I Knew Then 2. In the next entry I talk about investing in international stocks under If I Knew Then 3. In the fourth entry I talked about investing in Mutual fund under If I Knew Then 4.

On my other blog I wrote yesterday about TFI International (TSX -TFII, OTC-TFIFF)... learn more. Tomorrow, I will write about Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF)... learn more on Friday May 12, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Tuesday, May 9, 2017

If I Knew Then 4

My adventures in Mutual Funds have been mixed. I tried investing in Mutual Funds. With all the hype about Mutual Funds, I thought I should invest in them. After all they were managed by investment experts. They should do better than me that was just leaning. Turn out not to be true. The stocks I invested in did mostly better than the mutual funds.

On May 4, 1982 I invested in the Royal Bank's Equity Fund. I held it until 29 April 1997 which is 15 years. My total return was 12.59% per year. Over the same time period the TSX index showed an increase of 9.2% per year. So it would appear I did well with this.

I invested in Mackenzie Financial Corp's Industrial Growth Fund January 9, 1985. I held it until December 31, 1987, which is almost 3 years. My total return was 5.18% per year. Over the same time period the TSX index showed an increase of 10.2% per year. Here I got a positive return but it was lower than the market.

On January 30, 1992 I invested in Altamira's Equity Fund. I sold this on October 16, 1998. This is just over 6 years. My total return was 5.7% per year. Over the same time period the TSX index showed an increase of 7.5% per year. This was a positive return and only a few percentage points below the TSX.

On February 9, 1993 I invested in Altamira's Special Growth Fund. I did $100 investment every month until February 1997 when I reduced my monthly purchases is $75 per month. I stopped my monthly investments in December 1997. I sold this on October 7, 1998. So I held this fund for almost 6 years. My total return is a negative 0.2% per year. Over the same time period the TSX index showed an increase of 8.7% per year. This investment did quite poorly.

This is the fourth of a series of blogs called "If I knew now". In February of 2017 I started this series saying that If I Knew Then when I started investing what I know now, I would have only invested in Canadian Dividend Growth stocks. My first entry was about investing in US stocks in the blog If I Knew Then 2. In the next entry I talk about investing in international stocks under If I Knew Then 3.

On my other blog I wrote yesterday about McCoy Global Inc. (TSX-MCB, OTC-MCCRF)... learn more. Tomorrow, I will write about TFI International (TSX -TFII, OTC-TFIFF)... learn more on Wednesday, May 10, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Thursday, May 4, 2017

Something to Buy May 2017

There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See Something to Buy May 2017 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).

I follow 21 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Seven (or 33%) are showing cheap by historical median dividend yield. They are DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A) Both Goodfellow Inc. (TSX-GDL, OTC-GFELF) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI) have been removed from this list

I follow 12 Consumer Staples stocks. There no companies showing as cheap by the historically high dividend yield. Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) has been removed from this list. Three stocks (or 25%) are showing cheap by historical median dividend yield. These are Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L, OTC-LBLCF). Metro Inc. (TSX-MRU, OTC-MTRAF) has been removed from this list.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.

I follow 12 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. This is the same as last month.

I follow 8 Bank stocks. There is one company showing as cheap by the historically high dividend yield and that is Home Capital Group (TSX-HCG, OTC-HMCBF). Five stocks (or 62.5%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS, NYSE-BNS). CIBC (TSX-CM, NYSE-CM), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) and Toronto Dominion Bank (TSX-TD, NYSE-TD) have been added to this list.

I follow 13 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 62%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW). Equitable Group Inc. (TSX-EQB, OTC-EQGPF) has been added to this list.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Intact Financial Corp. ( TSX-IFC, OTC-IFCZF), Manulife Financial Corp (TSX-MFC) and Power Financial Corp (TSX-PWF). Intact Financial Corp. ( TSX-IFC, OTC-IFCZF) has been added to this group.

I follow 32 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are and SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change from last month.

I have 8 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 50% are showing as cheap by historical median dividend yield. They are Canam Group Inc. (TSX-CAM, OTC-CNMGA), Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF) and Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) Canexus Corporation (TSX-CUS, OTC-CXUSF) has been removed from this list next month as it has been removed from the TSX. Also PFB Corp (TSX-PFB, OTC-PFBOF) has been removed from the list as being cheap by historical median dividend yield.

I have 15 Services stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 20% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). There is no change from last month.

I follow 7 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 14% is showing as cheap by historical median dividend yield and that stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). This is the same as for last month.

I follow 10 Energy stocks. One Stock or (10%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF). There are three stocks (or 30%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). There is no change from last month.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). There is no change from last month.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Two stocks (or 25%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF) and Enbridge Inc. (TSX-ENB, NYSE-ENB). This is the same as last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Four stock (or 33%) is showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Emera Inc. (TSX-EMA, OTC-EMRAF). Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Fortis Inc. (TSX-FTS, OTC-FRTSF) have been removed from this list.

I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Three stocks (or 75%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). Manitoba Telecom (TSX-MBT, OTC-MOBAF) has been removed from this list as it has been bought out and delisted from the TSX. There is no change from last month.

On my other blog I wrote yesterday about Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more. Tomorrow, I will write about Automodular Corp. (TSX-AM.H, OTC-AMZKF)... learn more on Friday, May 5, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, May 2, 2017

Dividend Stocks May 2017

First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for May 2017.
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 37 stocks with a dividend yield higher than the historical average dividend yield
  • I have 60 stocks with a dividend yield higher than the historical median dividend yield and
  • 55 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January,
  • I have 3 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 37 stocks with a dividend yield higher than the historical average dividend yield
  • I have 60 stocks with a dividend yield higher than the historical median dividend yield and
  • 60 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list in January 2014,
  • I had 9 stocks with a dividend yield higher than the historical high dividend yield,
  • I had 45 stocks with a dividend yield higher than the historical average dividend yield and
  • 39 stocks with a dividend yield higher than the 5 year average dividend yield.
If you had one share of each stock, total dividends last month would be $158.78. This month dividends would be $159.14. Of the stock that I follow 5 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

EnerCare Inc. (TSX-ECI, OTC-CSUWF)
Johnson and Johnson (NYSE-JNJ)
Methanex Corp. (TSX-MX, NASDAQ-MEOH)
Pembina Pipelines Corp (TSX-PPL, NYSE-PBA)
Teck Resources Ltd (TSX-TECK.B, NYSE-TECK)

Of the stocks that I follow no company has decreased their dividends.

However, Barclays PLC (LSE-BARC, NYSE-BCS) did decreased its dividends in 2016. Changes in Dividends for this stock are not that easy to tell. Because they do not give out equal dividends sites that give out dividend information often get changes to dividends wrong. This belongs to March 2016.

Of the stocks that I follow no company has suspended their dividends.

Canam Group Inc. (TSX-CAM, OTC-CNMGA) stock price has doubled because the Dutil family is taking this company private and is offering twice the stock price to do so. So this is another stock I should replace.

Of the stocks I own and follow, Home Capital Group (TSX-HCG, OTC-HMCBF) stock has taken a dive because of loss of confidence. Equitable Group Inc. (TSX-EQB, OTC-EQGPF) is down also because it is the same sort of mortgage lender.

Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 9.74% of the stocks that I follow. Three of these stocks never had dividends, so 7.79% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Kombat Copper Inc. (TSX-KBT, OTC-PNTZF).

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote yesterday about Thomson Reuters Corp. (TSX-TRI, NYSE-TRI)... learn more. Tomorrow, I will write about Ag Growth International (TSX-AFN, OTC- AGGZF)... learn more on Wednesday, May 3, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram with #walktoronto.

Thursday, April 27, 2017

The Other Side

First I would like to say that I today bought some 200 shares of Home Capital Group at $6.80. I had bought shares in this company in March of this year and have, of course, lost money on them. The market has probably overreacted, but there are tons of problems at this company. Now I will just wait and see how this turns out. I believe that I will have a loss in any event, but perhaps not as great as if I sold today.

This is a very interesting blog by Michael Batnick on The Irreverent Investor . One section I find very interesting is how few stock do well over the longer term. Relatively few stocks tend to do most of the wealth creation by stocks. So he feel that you should try to avoid bad stocks rather than focusing on good stocks. (By the way, CRSP is Center for Research in Security Prices.)

Reading this made me add another column to my Index to my stocks with column entitled Total Return. This will show the IRR I have made over the time I held a stock. Currently I have 50 stocks and of these 2 I have just bought so I do not have IRR values on this. Of the other 48 stocks, I have made a profit on 41 and have a loss on 7. Of these 48 stocks I have 33 stocks with an IRR of 8% or higher. See spreadsheet on this here.

On my other blog I wrote yesterday about Power Financial Corp. (TSX-PWF, OTC-POFNF)... learn more. Tomorrow, I will write about WSP Global Inc. (TSX-WSP, OTC- WSPOF)... learn more on Friday, April 28, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram with #walktoronto.

Tuesday, April 25, 2017

Pension Crisis

There is a crisis in the US about pension as written up by Danielle DiMartino Boothin in this Bloombergarticle. But this is not confined to the US. Here is a Canadian article by Canadian Federation of Independent Business. They are not the only ones sounding alarms. There is also an article Kathryn May in the Financial Post

The thing is you can find all sorts of articles on Pension Plans worldwide. We are living longer so retirement years are much longer than anticipated. Even though we are living longer pensionable age is lower than it used to be. There are fewer workers to support retirees and this problem will only get worse as worldwide and regional population stabilizes and then declines.

What people also do not realize is that retirement is really a relatively new idea. People used to work until they died. Very few people used to live long enough to actually be old and retire. They would have also had to have some money to retire. Now people expect to have 20 to 30 years in retirement. Some live even longer in retirement. This takes a lot of savings to do this.

I am so glad that I did my own planning and am managing my own money. It may not be the simplest thing, but it is also not that difficult. I started to learn about investing by buying some large companies that paid dividends. I tried to educate myself ahead of time, but a lot of the information was not sinking in until I started actually to invest. So basically I learned investing by doing it.

Not everything is fine. I feel that I am being punished tax wise because I did too well investing my RRSP money. I am also being punished tax wise because I set up my own pension plan that has increased by higher than the rate of inflation, no matter what the inflation really is. My largest expenditure yearly is now Tax at 23% of my total budget in 2016.

On my other blog I wrote yesterday about Fortis Inc. (TSX-FTS, OTC-FRTSF)... learn more. Tomorrow, I will write about Power Financial Corp. (TSX-PWF, OTC-POFNF)... learn more on Wednesday, April 26, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

Thursday, April 20, 2017

Dividend Changes 2

Today, I want to revisit the information I have on dividend increases and decreases for the stocks I follow. Most of my stocks started out as Dividend Payers. Currently 14 stocks are not paying any dividends and this would be some 9.46% of the stocks that I follow. Three of these stocks never had dividends, so 7.43% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Trigon Metals Inc. (TSX-TM, OTC-PNTZF) (which used to be Kombat Copper Inc.).

Mths 2017 2017 2016 2016 2015 2015 2014 2014 Med Med
Incr Decr Incr Decr Incr Decr Incr Decr Incr Decr
Jan 5 1 4 0 4 0 4.0 0.0
Feb 10 0 5 2 8 0 14 0 9.0 0.0
Mar 23 0 18 5 19 3 15 1 18.5 2.0
Apr 10 2 8 4 9 3 14 0 9.5 2.5
May 3 2 6 1 7 1 6.0 1.0
Jun 18 0 14 1 14 1 14.0 1.0
Jul 3 1 6 1 3 0 3.0 1.0
Aug 4 0 4 2 9 0 4.0 0.0
Sep 7 1 7 3 9 0 7.0 1.0
Oct 1 1 1 1 1.0 1.0
Nov 6 0 4 1 5.0 0.5
Dec 12 0 13 2 13 0 13.0 0.0
Tot 48 3 88 15 95 18 99 4 94.0 10.0
154 31% 2% 57% 10% 62% 12% 64% 3% 61% 6%


What you can see in these charts is the percentage of stocks that have increased or decreased dividends. So far this year some 31% of the stocks I follow have increased their dividends. This is compared to 57% in 2016, 62% in 2015 and 64% in 2014. So, so far this year in the first quarter about half the number which increased dividends in recent years has increased their dividends.

You can also see in the first chart that certain months seem to have more dividend increases than other months. Those months are March, June and December.

Mths 2017 2017 2016 2016 2015 2015 2014 2014 Med Med
Incr Decr Incr Decr Incr Decr Incr Decr Incr Decr
Jan 5 1 4 0 4 0 4.0 0.0
Feb 10 0 5 2 8 0 14 0 9.0 0.0
Mar 23 0 18 5 19 3 15 1 18.5 2.0
Apr 10 2 8 4 9 3 14 0 9.5 2.5
Tot 48 3 35 11 40 6 43 1 41.0 4.5
154 31% 2% 23% 7% 26% 4% 28% 1% 27% 3%


In this chart you can see that so far this year, more companies have increased their dividends than in prior years to the end of April. Here you see that 31% have increased dividends to the end of April. By this time in 2016 23% had, in 2015 26% had and in 2014 27% had. You can also see that in 2017 there were fewer decreases at 2% than there were for other years expect for 2014 which only had a 1% of companies decreasing their dividends.

On my other blog I wrote yesterday about Veresen Inc. (TSX-VSN, OTC-FCGYF)... learn more. Tomorrow, I will write about SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF)... learn more on Friday, April 21, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.