Thursday, March 29, 2018

Dividend Cuts

In cutting the dividend in 2016 I judged Melcor Development Inc. to be prudent. I know that people who invest for dividend income generally judge companies harshly that cut dividends. However if you invest for the long term like I do, sometimes your companies must do such things. It is better to do this then to pay dividends that are not affordable.

If you have a diversified portfolio one company cutting their dividends should not do your dividend income any harm. In any given economic situation different companies are affected differently. You will have companies that cut dividends, ones that keep them level and ones who increase dividends.

So you have different economic climates in which you have companies that affected differently. This happens a lot. If you diversity your portfolio over different sectors you will be fine as different sectors will very often perform differently.

I have written about diversification before under Diversification and Sectors I Invest In. In my portfolio I cover the following sectors.

Index Sub-index
Consumer Cons Dis
Consumer Cons Staple
Real Estate Real Estate
Financials Bank
Financials Financial Services
Financials Insurance
Industrial Construction
Industrial Industrial
Industrial Manufacturing
Industrial Services
Materials Materials
Resources Energy
Tech Tech
Utilities Infrastructure
Utilities Power
Utilities Telecom Serv

On my other blog I wrote yesterday about BCE Inc. (TSX-BCE, NYSE-BCE)... learn more. Next, I will write about Sun Life Financial Inc. (TSX-SLF, NYSE-SLF)... learn more on Friday, April 30, 2018 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, March 27, 2018

Accounting

In my review of AltaGas Ltd I talked about the various methods they were using to show their Dividend Payout Ratios. The EPS calculation is a rather fake number. It is a method for all companies to use independent of what industry they are in. The main purpose is so people can compare EPS across different companies. It does sort of work.

Also I said that accounting is just as much art as science and it is. There is a lot of value judgement that goes into determining how to account for various items. We are bringing in more and more rules for company accounting, but they will probably never get rid of the need for accounting people to make value judgement. Sometimes more rules just make things more complicated rather than adding value.

If you take the subject of revenue, it can something not be clear. Say that you get paid for a 3 year subscriptions to an investment letter. Do you book revenue when received or as you send out the investment letter? Say you are getting paid after a job is done. Do you book the revenue when you got the job done, but not yet received payment? What if there is a chance you will not get paid? Lots of this stuff now has rules.

However, crowd sourcing for a project must be a whole different ball game. Each crowd sourced funding has different rules on what you may or may not get for the privilege of you handling over some money.

The IRFS standards we generally use are just the latest example of people trying to standard rules for accounting. There is a Wikipedia item on IRFS standards. Before that we had Canadian Generally Accepted Account principles (GAAP) Rules. AltaGas Ltd uses US GAAP Rules. There is a Investopedia article explaining what GAAP is and compares it to IRFS).

On the Sokanu site they ask the question “Is accounting an art or a science”. Their answer is “Accounting can be considered an art because it requires creative judgment and skills. In order to perform accounting functions well, discipline and training is required. Accounting can also be considered a science because it is a body of knowledge, but since the rules and principles are constantly changing and improving, it is not considered an exact science.”

The EduNote site discusses how account is both art and science. Scacpa on Word Press also talks about this subject and gives examples.

On my other blog I wrote yesterday about Melcor Developments Inc. (TSX-MRD, OTC-MODVF)... learn more. Next, I will write about BCE Inc. (TSX-BCE, NYSE-BCE)... learn more on Monday, March 26, 2018 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, March 22, 2018

Bond Investments

While the long term bull market in bonds was on, investors could switch to the bond market when the stock market was not doing well and make money. Then the bonds were moving differently that the stock market.

We have been in a bond bull market for so long few people remember a bond bear market. Most people talk about a 30 year bull market and that is longer than most current investors have been investing. The problem I see is that the switch from stock to bond and back again will not work in the bond bear market.

Also I have no idea why people would buy ETFs of bonds or Mutual Funds with bonds. Since bond values and interest rates move in opposite directions you will lose capital when interest rates rise. Of course this is only permanent if you buy and sell in the open market, which ETS and Mutual Funds do. If you buy bonds yourself, and this is very easy, you will get back your capital if you hold the bond until maturity.

Bonds are very easy to buy. When I bought them I would phone the TD brokerage line and ask what they have in bonds. I think you can even buy them online via TD website now.

Bonds are issued with a set interest rate at $100 per unit. For example, a $5,000 bond would be issued at $100 for 500 units or for $5,000.00. That is 100 times 500 is $5,000.00. Interest rates are always changing so after issue a bond is priced either over or under $100.00. Remember that interest rates and bond values go in the opposite direction. If a hold a bond to maturity, you will get back your money plus interest promised when you bought the bond.

If a bond is selling at a price over $100 that means that it is selling for an interest rate lower than the one the bond was issued with. During the life of the bond you will be getting the interest rate that the bond was issued with and $100 per unit at maturity. Because you are getting more interest than the rate when you bought the bond, part of the interest payments will cover the extra you paid for the bond as you will only get $100 per unit at maturity. You will be taxed on interest received and also have a capital loss on the difference between what you paid per unit for the bond and $100.00 per unit.

If a bond is selling at a price under $100 per unit it means that the bond is selling for an interest rate higher than the bond was issued with. During the life of the bond you will get the interest the bond was issued with plus $100.00 per unit at the maturity of the bond. Part of your interest will be covered in the extra money you get at Maturity. You will be taxed on the interest received and you will have a capital gain for the difference between what you paid for the bond and what you received at maturity.

See my old post on Buying Bonds... learn more . The only thing that is changed is that you can now buy bonds online through some brokerages. So to repeat the good thing about actually buying your bonds is that if you hold them to maturity you will get your capital back.

On my other blog I wrote yesterday about TransCanada Corp (TSX-TRP, NYSE-TRP)... learn more. Next, I will write about AltaGas Ltd (TSX-ALA, OTC-ATGFF)... learn more on Friday, March 23, 2018 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, March 20, 2018

Reviewing Stocks

If you have a dividend portfolio I think you should review it every 3 months to see what it is producing in dividends for you and to see any changes in price. Here is a sample portfolio giving what dividends are produced and in what cycle. See my spreadsheet here. If you want a working copy, just email me and I will send you one.

Another thing that is good to do at this time is to check stocks out at Stockchase. If you see any problem with a stock you should investigate further.

On my other blog I wrote yesterday about TransAlta Corp (TSX-TA, NSYE-TAC)... learn more. Next, I will write about TransCanada Corp (TSX-TRP, NYSE-TRP)... learn more on Wednesday, March 21, 2018 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, March 15, 2018

Real Estate Stocks

If follow 10 REITs. They are all listed below. It would seem that most the Real Estate stocks did better in growth of dividend and Total Return in the past then recently.

If you hold stock for the long term like I do, you will have companies going through bad times. The thing is that if you a diversified portfolio, all your stocks will not be going through tough times at the same time. In different economic situations, some companies will thrive and some will have a tough time.

# Name TSX Symbol Other Symbol
1 Allied Properties REIT TSX AP.UN OTC APYRF
2 Artis REIT TSX AX.UN OTC ARESF
3 Canadian Real Estate TSX REF.UN OTC CRXIF
4 First Capital Realty TSX FCR OTC FCRGF
5 FirstService Corp. TSX FSV NASDAQ FSV
6 Granite REIT TSX GRT.UN NYSE GRP.U
7 H & R REIT TSX HR.UN OTC HRUFF
8 Melcor Developments Inc. TSX MRD OTC MODVF
9 RIOCAN REIT TSX REI.UN OTC RIOCF
10 SmartCentres REIT TSX SRU.UN OTC CWYUF


The next chart gives you the rate of dividend growth per year for the periods shown. If the period is shorter than the heading I put this information in the "To Year" column. For example for Allied Properties I have growth per year for years 5, 10 and 14. Over the past 5 years dividends have grown at 2.39% per year , over 10 years at 2.04% per and over 14 years at 4.51% per year.

With the exception of Granite REIT, the longer durations on most companies have higher dividend growth rates. For example, RIOCAN REIT's dividends grow by 5.30% over the past 23 years, but only 0.43% per year over the past 5 years. That is because it has not had dividend increases lately.

REIT To Yr DG 5 DG 10 DG 15 DG 20 DG 25
Allied Properties REIT 14 2.39% 2.04% 4.51%
Artis REIT 11 0.00% 0.28% 3.42%
Canadian Real Estate 23 4.74% 3.45% 2.97% 2.98% 5.03%
First Capital Realty 22 1.46% 1.21% 2.43% 2.85% 7.37%
FirstService Corp. 3 10.71%
Granite REIT 14 24.08% 13.14% 13.46%
H & R REIT 20 3.27% 0.07% 0.94% 3.60%
Melcor Developments Inc. 25 3.71% 4.81% 12.69% 14.87% 13.56%
RIOCAN REIT 23 0.43% 0.60% 1.64% 3.04% 5.30%
SmartCentres REIT 13 1.39% 1.21% 1.39%


The next chart gives the total returns per year for the shown time periods. Total Return includes both capital gains and dividends. Here again, if I do not have a full period of data I put the last period covered in the "To Year" column. For Allied Properties I have Total Returns for the periods of 5, 10 and 14 years. Over the past 14 years Allied Properties have a Total Return of 15.30% per year.

Here again most of the REITs had better past growth. The exceptions are Granite REIT and First Service Corp (which just started dividends 3 years ago.) For example, Canadian REIT grew by 16.28% per year over the past 23 years, but only 5.20% over the past 5 years.

REIT To Yr TR 5 TR 10 TR 15 TR 20 TR 25
Allied Properties REIT 14 9.02% 12.37% 15.30%
Artis REIT 12 6.09% 4.78% 18.83%
Canadian Real Estate 23 5.20% 9.26% 15.39% 13.20% 16.28%
First Capital Realty 22 8.18% 6.31% 13.24% 10.11% 13.45%
FirstService Corp. 21 37.92% 15.28% 14.37% 19.51% 21.48%
Granite REIT 14 12.53% 3.87% 6.79%
H & R REIT 20 3.51% 6.43% 10.90% 12.09%
Melcor Developments Inc. 25 6.33% 0.64% 17.35% 20.86% 17.21%
RIOCAN REIT 23 2.92% 7.20% 12.88% 13.12% 21.44%
SmartCentres REIT 18 9.32% 6.88% 54.59% 47.50%


I also thought it would be handy to show the last dividend increase and this is in the chart below.

REIT Last Inc Inc % Comment
Allied Properties REIT 2018 1.96% No increase in 2017, but one in 2016
Artis REIT 2009 2.86% No increase since 2009
Canadian Real Estate 2018 2.16% Increases since 2002
First Capital Realty 2014 2.38% No increases since 2014
FirstService Corp. 2018 10.20% Paid in US$
Granite REIT 2018 4.60% Big changes occurred in 2012
H & R REIT 2017 2.20% Increases only 3 of last 5 years
Melcor Developments Inc. 2017 8.30% After 2016 Decrease of 20%
RIOCAN REIT 2018 2.13% First since 2013
SmartCentres REIT 2017 2.94% Increases only 3 of last 5 years, last 3


Lastly I thought information on their current dividend and yield might be helpful. See the chart below.

REIT Price Div Yield
Allied Properties REIT $41.47 $1.56 3.76%
Artis REIT $13.72 $1.08 7.87%
Canadian Real Estate $50.31 $1.87 3.72%
First Capital Realty $20.19 $0.86 4.26%
FirstService Corp. $70.36 $0.54 0.77%
Granite REIT $50.50 $2.72 5.39%
H & R REIT $20.35 $1.38 6.78%
Melcor Developments Inc. $13.90 $0.52 3.74%
RIOCAN REIT $23.85 $1.44 6.04%
SmartCentres REIT $29.61 $1.75 5.91%


There is a site called http://reitreport.ca/canadian-reits/ hat list all Canadian REITs and their profile. The Profile basically says what the REIT invests in. On the Real Property Association of Canada you can find a definition of a REIT.

On my other blog I wrote yesterday about Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more. Tomorrow, I will write about Enbridge Inc. (TSX-ENB, NYSE-ENB)... learn more on Friday, March 16, 2018 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, March 13, 2018

My Dividend Goals

I want to have dividend yield in the 3% range and have my dividends grow faster than the rate of inflation. How have I done? The yield I have made on my portfolio of January 1 is in the first line. I looked at both dividend growth and Total Income Growth. This is because I have more than just stocks in my portfolio. I also have GICs, Money Market Funds and Savings Account. I have the latter things because I need some cash or near cash in the RIF for withdrawals.

So in 2017 I had a yield on the value of my portfolio of January 1, 2017 of 3.32%. The growth in dividend income was 5.45%. My Total Income Growth was 4.90%.

Action 2017 2016 2015 2014 2013
Dividend Yield 3.32% 3.75% 3.27% 3.41% 3.77%
Dividend Growth 5.45% 5.08% 7.61% 3.85% 10.53%
Total Income Growth 4.90% 4.57% 8.96% 4.99% 10.63%


My goal was different when I was building my portfolio. I wanted a lower dividend income yield but fast dividend increases. I changed my mind after the 2000 bear market. I was living off my portfolio and using the 4%, 8% rule. I was spending more than my income so I was taking out capital. At that time I decided to increase my dividend yield so I could life off my dividends. I planned to do this even if I sacrificed some dividend growth which I knew I would have to do.

On my other blog I wrote yesterday about Goodfellow Inc. (TSX-GDL, OTC-GFELF)... learn more. Next, I will write about Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)... learn more on Wednesday, March 14, 2018 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, March 8, 2018

Something to Buy March 2018

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 March 2018 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 22 stocks in the Consumer Discretionary category. Three of these stocks (14%) are showing as cheap by the historically high dividend yield and they are DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), High Liner Foods (TSX-HLF, OTC-HLNFF) and Newfoundland Capital Corp (TSX-NCC.A). DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), High Liner Foods (TSX-HLF, OTC-HLNFF) were added to this list.

Eleven (or 50%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B, OTC-DIIBF), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP) Newfoundland Capital Corp (TSX-NCC.A), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI). Goeasy Ltd. (TSX-GSY, OTC-EHMEF) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI) were added to this list.

I follow 12 Consumer Staples stocks. No companies are showing as cheap by the historically high dividend yield. Five stocks (or 42%) are showing cheap by historical median dividend yield. These are AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF) has been deleted from this list and AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF) has been added.

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 10 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Five stocks (or 50%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN, OTC- ARESF); Granite Real Estate (TSX-GRT.UN, NYSE-GRP.U), H & R REIT (TSX-HR.UN, OTC-HRUFF), Melcor Developments Inc. (TSX-MRD, OTC-MODVF) and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) has been added to the list.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Three stock (or 38%) are showing cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), Barclays PLC (LSE-BARC, NYSE-BCS) and CIBC (TSX-CM, NYSE-CM). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) and Barclays PLC (LSE-BARC, NYSE-BCS) have been added to this list.

I follow 14 Financial Service stocks as I am now following Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF). None are showing as cheap by the historically high dividend yield. Nine (or 64%) 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, OTC-AGFMF), Alaris Royalty Corp (TSX-AD, OTC-ALARF), Chesswood Group (TSX-CHW, OTC-CHWWF), CI Financial (TSX-CIX, OTC-CIFAF), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF), IGM Financial (TSX-IGM, OTC-IGIFF) and Power Corp (TSX-POW, OTC-PWCDF). Chesswood Group (TSX-CHW, OTC-CHWWF) has been added to this list.

I follow 6 Insurance stocks. None are showing as cheap by the historically high dividend yield. Five stocks (or 83%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), Industrial Alliance Ins. and Fin. (TSX-IAG, OTC-IDLLF), Intact Financial Corp. (TSX-IFC, OTC-IFCZF), Manulife Financial Corp (TSX-MFC, NYSE-MFC) and Power Financial Corp (TSX-PWF, OTC-POFNF). Intact Financial Corp. (TSX-IFC, OTC-IFCZF) has been added to this list.

I follow 32 Industrial stocks. I have one stock less because HNZ Group Inc. (TSX-HNZ, OTC-CDHPF) has been bought out. 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 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 7 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 57% are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF). There is no change from last month.

I follow 16 Services stocks. I have one stock less because HNZ Group Inc. (TSX-HNZ, OTC-CDHPF) has been bought out. None are showing as cheap by the historically high dividend yield. Five stocks or 31% 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) Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA), Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). Wajax Corp (TSX-WJX, OTC-WJXFF)) has been added to cheap by historically median dividend yield list.

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. Two stocks or 25% are showing as cheap by historical median dividend yield. They are Barrick Gold Corp. (TSX-ABX, NYSE-ABX) and Methanex Corp (TSX-MX, NASDAQ-MEOH).

I follow 10 Energy stocks. Three stocks or 30% are showing as cheap by the historical high dividend yield. They are Mullen Group (TSX-MTL, OTC-MLLGF), Ensign Energy Services (TSX-ESI, OTC-ESVIF) and Suncor Energy (TSX-SU, NYSE-SU). Ensign Energy Services (TSX-ESI, OTC-ESVIF) and Suncor Energy (TSX-SU, NYSE-SU) have been added to this list. There are five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). This last list has not changed 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), Maxar Technologies Ltd (TSX-MAXR-NYSE-MAXR) and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). This has not changed from last month.

I follow 7 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Four stocks (or 57%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB), Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF) and TransCanada Corp (TSX-TRP, NYSE-TRP). This has not changed from last month.

I follow 12 of the Power type utility companies. ATCO Ltd (TSX-ACO.X, OTC-ACLLF) is showing as cheap by the historically high dividend yield. Five stock (or 42%) are showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Emera Inc. (TSX-EMA, OTC-EMRAF) and Fortis Inc. (TSX-FTS, OTC-FRTSF) Just Energy Group Inc. (TSX-JE, NYSE-JE) has been removed from this list.

I follow 4 of the Telecom Service type utility companies. No stock is show as cheap by the historical high dividend yield. Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) has been removed from this list. 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). There is no change on this last list.

On my other blog I wrote yesterday about H & R Real Estate Trust)... learn more. Next, I will write about Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF)... learn more on March 9, 2018 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, March 6, 2018

Dividend Stocks March 2018

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 March 2018. On this list,
  • I have 7 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 47 stocks with a dividend yield higher than the historical average dividend yield
  • I have 78 stocks with a dividend yield higher than the historical median dividend yield and
  • 78 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in December 2017,
  • I have 5 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 35 stocks with a dividend yield higher than the historical average dividend yield
  • I have 69 stocks with a dividend yield higher than the historical median dividend yield and
  • 72 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 $163.68. This month dividends would be $167.96. Of the stock that I follow 22 stocks has raised their dividends since last month.

Bank of Nova Scotia (TSX-BNS, NYSE-BNS)
BCE (TSX-BCE, NYSE-BCE)
Brookfield Asset Management (TSX-BAM.A, NYSE-BAM)
CCL Industries (TSX-CCL.B, OTC-CCDBF)
CIBC (TSX-CM, NYSE-CM)

Equitable Group Inc. (TSX-EQB, OTC-EQGPF)
FirstService Corp. (TSX-FSV, NASDAQ-FSV)
Goeasy Ltd. (TSX-GSY, OTC-EHMEF)
Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)
Husky Energy (TSX-HSE, OTC-HUSKF)

Innergex Renewable Energy (TSX-INE, OTC-INGXF)
Intact Financial Corp. (TSX-IFC, OTC-IFCZF)
Magna International Inc. (TSX-MG, NYSE-MGA)
Manulife Financial Corp (TSX-MFC, NYSE-MFC)
RioCan Real Estate (TSX-REI.UN, OTC-RIOCF)

Royal Bank (TSX-RY, NYSE-RY)
SNC-Lavalin (TSX-SNC, OTC-SNCAF)
Stantec Inc. (TSX-STN, NYSE-STN)
Suncor Energy (TSX-SU, NYSE-SU)
Toromont Industries Ltd (TSX-TIH, OTC-TMTNF)

Toronto Dominion Bank (TSX-TD, NYSE-TD)
TransCanada Corp (TSX-TRP, NYSE-TRP)

Husky Energy (TSX-HSE, OTC-HUSKF) has restarted paying dividends, so this is significant. Because I had to drop HNZ Group Inc. (TSX-HNZ, OTC-CDHPF) from my list, I am going to have to find another stock to follow.

Also, of the stocks that I follow, 0 stocks decreased or suspended their dividends.

Most of my stocks started out as Dividend Payers. Currently 14 stocks are not paying any dividends and this would be some 9.03% of the stocks that I follow. Four of these stocks never had dividends, so 7.74% 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).

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 Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF)... learn more. Next, I will write about H & R Real Estate Trust)... learn more on Tuesday, March 7, 2018 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, March 1, 2018

A Portfolio

A $200,000 15 stock portfolio might look like this:

Stocks Symbol T Cost. Sh % of Tot. Stock Value Div Total Div Yield
Bank of Nova Scotia BNS F $78.39 200 7.78% $15,678.00 $3.16 $632.00 4.03%
BCE Inc. BCE U $56.30 200 5.59% $11,260.00 $3.02 $604.00 5.36%
Canadian Tire A CTC.A C $176.15 100 8.75% $17,615.00 $3.60 $360.00 2.04%
Canadian Utilities CU U $33.56 400 6.67% $13,424.00 $1.57 $628.00 4.68%
CDN National CNR I $97.86 100 4.86% $9,786.00 $1.82 $182.00 1.86%
Fortis Inc. FTS U $42.24 300 6.29% $12,672.00 $1.70 $510.00 4.02%
Metro Inc. MRU C $40.37 300 6.01% $12,111.00 $0.72 $216.00 1.78%
Pembina Pipeline PPL U $42.49 300 6.33% $12,747.00 $2.16 $648.00 5.08%
Power Corp POW F $30.53 400 6.06% $12,212.00 $1.43 $572.00 4.68%
RIOCan REI.UN R $23.57 500 5.85% $11,785.00 $1.41 $705.00 5.98%
Saputo Inc. SAP C $40.45 300 6.03% $12,135.00 $0.64 $192.00 1.58%
SNC-Lavalin Group SNC I $57.25 200 5.68% $11,450.00 $1.15 $230.00 2.01%
Sun Life Financial SLF F $54.22 300 8.08% $16,266.00 $1.82 $546.00 3.36%
TD Bank TD F $73.97 200 7.35% $14,794.00 $2.40 $480.00 3.24%
TransCanada Corp. TRP U $58.25 300 8.68% $17,475.00 $2.76 $828.00 4.74%
100.00% $201,410.00 $7,333.00 3.64%


In this portfolio the stocks are divided among stock categories shown below.

F 29.25% Financial
U 33.53% Utility
C 20.77% Consumer
I 10.54% Industrial
R 5.85% REIT
T 100%


See my spreadsheet at Dividend Stocks 2018. If you want a working one you can just email me and I will forward one. My spreadsheets on Excel of XLSX but I can convert it to another format if required.

On my other blog I wrote yesterday about Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF)... learn more. Next, I will write about RioCan Real Estate (TSX-REI.UN, OTC- RIOCF)... learn more on March 2, 2018 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.