I do a test on dividend yield to see the relationship between the 5 year median dividend yield and the current dividend yield. Ideally you want the current dividend yield to be higher than the 5 year median dividend yield. With dividend yields, higher is better as far as stock price goes.
If the current dividend yield is higher than the 5 year median dividend yield it means that the current stock price is better than the 5 year median stock price. This is good because it means that the stock price is reasonable and is at the lower end of the reasonable range for the stock price.
If the current dividend yield is lower than the 5 year dividend yield look to see how much lower it is. If the 5 year median dividend yield and the current dividend yield are close, then the stock price is still in the reasonable range. Once the current dividend yield is 15% to 20% higher than the 5 year median dividend yield, the company's stock price is expensive.
If the current dividend yield is 20% higher than the 5 year dividend yield, it means that the current stock price is cheap. Stock prices are not often cheap. If the whole stock market is relatively low this is good. If the whole stock market is not relatively low and your company's stock price is cheap then you have to look and see if there are any problems with the company.
Unfortunately, an individual company's stock price is cheap because the market has lost confidence in the company for some reason. Find out the reason and ask yourself if the stock market is over-reacting or is it justified in its reaction. If the stock market has over-reacted to a problem and it often does, then this would be justification for buying a stock.
On my other blog I am today writing about Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN) ...continue...
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. Follow me on Twitter.
Wednesday, May 28, 2014
Monday, May 26, 2014
Portfolio Theory
The theory is that you should subtract your age from 100 and invest the answer in stocks and the rest in bonds or interest bearing vehicles. So if you are 20, you should invest (100 - 20) 80% of your portfolio in stock and 20% in bonds. If you are 60, you should invest (100 - 60) 40% in stocks and the rest in bonds.
With the above, the theory was that you should put interest bearing vehicles like bonds and GICs in your RRSP account because tax rates are higher on interest income than on dividend income or capital gains. The stocks should be in your trading account.
I have never followed this. When I started to invest in the 1970's interest rates were really high so I bought safe GICs and Canadian Savings Bonds. Later I invested also in bonds. The interest rates on these investment vehicles peaked around 19.5%. When interest rates started to come down, I started to invest in stocks. When interest rates went below 10%, I got out of bonds totally.
Currently the main stocks in my portfolio are dividend growth stocks. This is true of my RRSP account as it is of the Trading Account and my TFSA.
On my other blog I am today writing about Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF) ...continue...
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. Follow me on Twitter.
With the above, the theory was that you should put interest bearing vehicles like bonds and GICs in your RRSP account because tax rates are higher on interest income than on dividend income or capital gains. The stocks should be in your trading account.
I have never followed this. When I started to invest in the 1970's interest rates were really high so I bought safe GICs and Canadian Savings Bonds. Later I invested also in bonds. The interest rates on these investment vehicles peaked around 19.5%. When interest rates started to come down, I started to invest in stocks. When interest rates went below 10%, I got out of bonds totally.
Currently the main stocks in my portfolio are dividend growth stocks. This is true of my RRSP account as it is of the Trading Account and my TFSA.
On my other blog I am today writing about Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF) ...continue...
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. Follow me on Twitter.
Thursday, May 22, 2014
Preferred Shares
Personally, I do not buy preferred shares. Their negative points are
Some preferred shares do change their dividend payments and these preferred shares are generally called reset and/or floating rate preferred shares. However, because dividends are reset based on some interest rate, the dividends can go down as well as up. You can make similar points about getting capital gains and capital losses on preferred shares. The price of preferred shares tend to be interest rate sensitive, so the shares price can go up or down, although in all fairness preferred shares tend to have more price stability that common shares.
On the Scotiabank web site there is simple guide to preferred shares and they are willing to send you their full guide. The website of Raymond James has a current guide to Canadian Preferred Shares.
The web site Investopedia has a good article on preferred shares as does Wikipedia. There is a fairly recent G&M article on preferred shares by John Heinzl.
On my other blog I am today writing about Ensign Energy Services (TSX-ESI, OTC-ESVIF) ...continue...
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. Follow me on Twitter.
- Dividend payments do not grow (although they can change or reset.)
- Preferred shares come in all sorts of complex and complicated flavors.
- You can have capital gains and losses on preferred shares, but you do not generally get the capital appreciation you can get from shares.
- The share price will generally fluctuate with interest rates.
- Most preferred shares are callable, but this can get complicated.
- You have to be just a selective in picking preferred shares as you are in picking common shares.
- They are generally taxed like other Canadian Dividends, which means at a lower rate than interest.
- Generally preferred dividends must be paid before dividends to common shareholders.
- Generally, preferred shareholders are in front of common shareholders in a bankruptcy situation.
Some preferred shares do change their dividend payments and these preferred shares are generally called reset and/or floating rate preferred shares. However, because dividends are reset based on some interest rate, the dividends can go down as well as up. You can make similar points about getting capital gains and capital losses on preferred shares. The price of preferred shares tend to be interest rate sensitive, so the shares price can go up or down, although in all fairness preferred shares tend to have more price stability that common shares.
On the Scotiabank web site there is simple guide to preferred shares and they are willing to send you their full guide. The website of Raymond James has a current guide to Canadian Preferred Shares.
The web site Investopedia has a good article on preferred shares as does Wikipedia. There is a fairly recent G&M article on preferred shares by John Heinzl.
On my other blog I am today writing about Ensign Energy Services (TSX-ESI, OTC-ESVIF) ...continue...
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. Follow me on Twitter.
Tuesday, May 20, 2014
Blue Chip Stocks
My experience with Blue Chip Stocks is that even though at sometimes they do not do well, you tend not to lose any or much money. So, if you want a rather safe dividend paying portfolio, it is probably a good idea to stick with the stocks that most people talk about as being large blue chips.
Some examples of mine for stocks I gave up on and sold are:
On my other blog I am today writing about Power Financial Corp. (TSX-PWF, OTC-POFNF)...continue...
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. Follow me on Twitter.
Some examples of mine for stocks I gave up on and sold are:
- AGF Management Ltd. (TSX-AGF.B), a stock that I bought in 2001 and sold in 2006. I made a total return of 2.08% per year. It started to show signs of problems in 2003 and I gave up on it by 2006.
- Nokia Corp. (NYSE-NOK) is a stock I bought in 1999 and gave up on in 2008. I made a total return of 2.23% per year on this stock.
- Onex Corp.(TSX-OCX), is a stock I bought in 2001and gave up on in 2008. I made a total return of 5.87% per year on this stock.
- Barclays PLC ADR, (NYSE-BCS) a stock I bought in 2000. It was hit hard by the recent financial crisis. I still have it and I have made a total return of 3.08% per year.
- Power Financial Corp. (TSX-PWF) is a stock I bought in 2001 and 2004. It got into trouble, as all Life Insurance companies did in 2008. To date I have made a total return of 8.6% per year.
- Sun Life Financial (TSX-SLF), a stock I first bought in 2000. I have made a total return on this stock of 5.84% per year.
- Manitoba Telecom (TSX-MBT), a stock I bought in 2006 and at one time held a fair bit of it. I have been selling it off. I have made a total return on this stock of 2.78% per year. This stock I will eventually get rid of entirely.
- TransAlta (TSX-TA), a stock I bought in 1987 and I have made a total return of 6.83% per year.
On my other blog I am today writing about Power Financial Corp. (TSX-PWF, OTC-POFNF)...continue...
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. Follow me on Twitter.
Thursday, May 15, 2014
Research Newsletters and Blogs
I thought I would also put out there what newsletters I get and what blogs I look at.
I get a weekly email called Daily Buy/Sell Advisor from MPL Communications. You can go to their site to sign up for this email. From their site you can also get free investment newsletters and view investment topics. You can also try out their newsletters at some very good rates. I especially like the Investment Reporter. They have just recently redesigned their site.
I subscribe to a few email newsletters from John Mauldin's company of Mauldin Economics. I subscribe to all his emails including Thoughts from the Frontline; Pat Cox's Tech Digest Weekly; to the email called Outside the Box and to the email from Grant Williams called Things That Make You Go Hmmm.
I also subscribe to a number of newsletters to do with investing. These include emails such as the one's from Ben Hunt called Epsilon Theory. This newsletter is sort about investing, but Ben is long on theories and does not talk much about particular stocks. I also get regular emails from John Stephen's Stephen's Files. These emails talk about the markets in general and sometimes about particular stocks. I also get emails from CanTech and these talk about tech stocks. (For CanTech newsletter sign up look to the bottom left of the site.)
And for something completely different, I subscribe to emails from Stratfor Global Intelligence which is a Geopolitical newsletter. Another one I subscribe to is Russian Direct which basically talks about Russian views on current events.
For a number of blogs I like, go to my investment notes. These bloggers include Dividend Ninja; The Loonie Bin; My Own Advisor; Dividend Monk; The Dividend Guy; and The Passive Income Earner.
On my other blog I am today writing about Fortis Inc. (TSX-FTS, OTC- FRTSF) ...continue...
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. See my website for stocks followed and investment notes. Follow me on twitter.
I get a weekly email called Daily Buy/Sell Advisor from MPL Communications. You can go to their site to sign up for this email. From their site you can also get free investment newsletters and view investment topics. You can also try out their newsletters at some very good rates. I especially like the Investment Reporter. They have just recently redesigned their site.
I subscribe to a few email newsletters from John Mauldin's company of Mauldin Economics. I subscribe to all his emails including Thoughts from the Frontline; Pat Cox's Tech Digest Weekly; to the email called Outside the Box and to the email from Grant Williams called Things That Make You Go Hmmm.
I also subscribe to a number of newsletters to do with investing. These include emails such as the one's from Ben Hunt called Epsilon Theory. This newsletter is sort about investing, but Ben is long on theories and does not talk much about particular stocks. I also get regular emails from John Stephen's Stephen's Files. These emails talk about the markets in general and sometimes about particular stocks. I also get emails from CanTech and these talk about tech stocks. (For CanTech newsletter sign up look to the bottom left of the site.)
And for something completely different, I subscribe to emails from Stratfor Global Intelligence which is a Geopolitical newsletter. Another one I subscribe to is Russian Direct which basically talks about Russian views on current events.
For a number of blogs I like, go to my investment notes. These bloggers include Dividend Ninja; The Loonie Bin; My Own Advisor; Dividend Monk; The Dividend Guy; and The Passive Income Earner.
On my other blog I am today writing about Fortis Inc. (TSX-FTS, OTC- FRTSF) ...continue...
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. See my website for stocks followed and investment notes. Follow me on twitter.
Kathleen Gabriel, Artist
My friend, Kathleen Gabriel, will be showing paintings and photo works at the Kirkfield Ontario Lion's Club Community Centre on May 17 and May 18, 2014. Kirkfield is a village located in the Kawartha Lakes district about one and one half hour north of Toronto and east of Lake Simcoe on Highway 48.
Monday, May 12, 2014
Research Information Sites
I am updating my entry on Research Information Sites as there were some I did not include when I did the original post in 2012.
The main place I get information is the annual statements of the companies I investigate for investing purposes. It is very rare to find any company with shares on the TSX not to provide its annual statements on their web site. So my main source of information is the financial statements and notes.
To understand financial statements, it would be helpful to take a course in bookkeeping or accounting. Sometimes I review financial records at Google (the Financials for Alimentation Couche-Tard at Google are here) and G&M (the Financial for Alimentation Couche-Tard at G&M are here).
Another great source of information on what to invest in and for stocks reviews is your brokerage firm. I use TD Waterhouse and they have a good selection on-line of Analysts' Reports, Reuter Reports, Insider Trading, etc. What I especially like about TD is their weekly video. Go to their site at Products and Service.
Another web site I like is Reuters. For Canadian stock you have to follow the stock symbol by ".TO". The above Alimentation Couche-Tard (TSX-ATD.B) stock symbol for Reuters would be "ATDb.TO". Canadian Pacific (TSX-CP) symbol would be "CP.TO". This site has a lot of great information such as details on Key Personnel, analysts' estimates and recommendations, and institutional investing. (On this site, TTM means trailing 12 months and MRQ means most recent quarter.)
I also get information from 4-Traders. Just input the TSX symbol and your stock should come up. You can get consensus financial information here and also analysts' recommendations, including the 12 month consensus stock price.
The Morningstar Canada site is also an interesting one. Put in the name of the stock or the symbol to get information. One extra thing about this site is that it provides old annual statements for a lot of Canadian stocks. Click on the tab that says "Filings".
I still use Globe and Mail investor site, but not as much as I used to. I like to check more than one site for such things as stock prices, dividends, estimates and analysts' recommendations. Their summary tab also gives good information on P/E Ratios, the annual dividend and dividend yield. If you are looking at an older stock report of mine, you can pick up current and forward P/E Ratios and current Dividend yield from this site.
Another site is the TSX site. Here you can find out what stocks are in what TSX indexes. This is where the S&P/TSX Canadian Dividend Aristocrats Index is located.
I use the site of Stock Chase to see what some analysts are saying about a stock. For a good write up on the use of this site, see Passive Income Earner site.
The Financial Times site gives information on Canadian Stocks. For a Canadian company follow the Canadian Symbol by ":TOR". For example, for Ag Growth International Inc., use "AFN:TOR" in the search for quote box. This site gives forecasts on stocks.
Yahoo Finance site gives a lot of good information. On a lot of stocks you can find past dividend payments and stock prices. For dividends, note that this site, as most sites do, use the ex-dividend date for dividends. The ex-dividend date is 2 business days before the dividend record date. To start getting information on a company, go to Yahoo markets and type in the stock's symbol. Canadian Stock Symbols are followed by "TO". So on this site for Ag Growth International Inc., use "AFN.TO".
I also use the site Market Watch to get stock information. This site also provides historical prices here. To get Canadian Stock, preface the symbol with "CA:". For example to get Ag Growth, use "CA:AFN".
On my other blog I am today writing about SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF) ...continue...
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. See my website for stocks followed and investment notes. Follow me on twitter.
The main place I get information is the annual statements of the companies I investigate for investing purposes. It is very rare to find any company with shares on the TSX not to provide its annual statements on their web site. So my main source of information is the financial statements and notes.
To understand financial statements, it would be helpful to take a course in bookkeeping or accounting. Sometimes I review financial records at Google (the Financials for Alimentation Couche-Tard at Google are here) and G&M (the Financial for Alimentation Couche-Tard at G&M are here).
Another great source of information on what to invest in and for stocks reviews is your brokerage firm. I use TD Waterhouse and they have a good selection on-line of Analysts' Reports, Reuter Reports, Insider Trading, etc. What I especially like about TD is their weekly video. Go to their site at Products and Service.
Another web site I like is Reuters. For Canadian stock you have to follow the stock symbol by ".TO". The above Alimentation Couche-Tard (TSX-ATD.B) stock symbol for Reuters would be "ATDb.TO". Canadian Pacific (TSX-CP) symbol would be "CP.TO". This site has a lot of great information such as details on Key Personnel, analysts' estimates and recommendations, and institutional investing. (On this site, TTM means trailing 12 months and MRQ means most recent quarter.)
I also get information from 4-Traders. Just input the TSX symbol and your stock should come up. You can get consensus financial information here and also analysts' recommendations, including the 12 month consensus stock price.
The Morningstar Canada site is also an interesting one. Put in the name of the stock or the symbol to get information. One extra thing about this site is that it provides old annual statements for a lot of Canadian stocks. Click on the tab that says "Filings".
I still use Globe and Mail investor site, but not as much as I used to. I like to check more than one site for such things as stock prices, dividends, estimates and analysts' recommendations. Their summary tab also gives good information on P/E Ratios, the annual dividend and dividend yield. If you are looking at an older stock report of mine, you can pick up current and forward P/E Ratios and current Dividend yield from this site.
Another site is the TSX site. Here you can find out what stocks are in what TSX indexes. This is where the S&P/TSX Canadian Dividend Aristocrats Index is located.
I use the site of Stock Chase to see what some analysts are saying about a stock. For a good write up on the use of this site, see Passive Income Earner site.
The Financial Times site gives information on Canadian Stocks. For a Canadian company follow the Canadian Symbol by ":TOR". For example, for Ag Growth International Inc., use "AFN:TOR" in the search for quote box. This site gives forecasts on stocks.
Yahoo Finance site gives a lot of good information. On a lot of stocks you can find past dividend payments and stock prices. For dividends, note that this site, as most sites do, use the ex-dividend date for dividends. The ex-dividend date is 2 business days before the dividend record date. To start getting information on a company, go to Yahoo markets and type in the stock's symbol. Canadian Stock Symbols are followed by "TO". So on this site for Ag Growth International Inc., use "AFN.TO".
I also use the site Market Watch to get stock information. This site also provides historical prices here. To get Canadian Stock, preface the symbol with "CA:". For example to get Ag Growth, use "CA:AFN".
On my other blog I am today writing about SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF) ...continue...
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. See my website for stocks followed and investment notes. Follow me on twitter.
Wednesday, May 7, 2014
Something to Buy May 2014
There is always something to buy in the stock market. On Monday, 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.
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 my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
Of the Consumer Discretionary stocks I follow there is a few that are cheaper than their relative historical average price. These stocks would be Molson Coors Canada (TSX-TPS.B) and Thomson Reuters Corp (TSX-TRI). The other cheap Consumer Discretionary stocks are probably cheap for good reasons.
A number of Consumer Staple stocks seem to be cheap. Examples would be Dorel Industries (TSX-DII.B A) and Metro Inc. (TSX-MRU). (Please note that Canada Bread (TSX-CBY) has been bought out.)
The banks mostly seem to be cheaper than their relative historical average price. AGF Management Ltd (TSX-AGF.B) is probably cheap for good reason, but IGM Financial (TSX-IGM), Power Corp (TSX-POW) and Power Financial (TSX-PWF) are cheaper than their relative historical average price.
The stocks showing cheap in the Industrial section are probably cheap for good reasons. There are not many companies cheap in the Tech sector except for small companies like Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
A number of energy stocks also seem cheap. Examples are Canadian Natural Resources (TSX-CNQ); Cenovus Energy Inc. (TSX-CVE) and Suncor Energy (TSX-SU). From the stocks I follow, 4 of 6 which are cheap on a relative historical basis are energy stocks.
The infrastructure type utility companies are not cheap. What utility companies that are cheap, seem to be cheap for a good reason. Examples are Atlantic Power Corp (TSX-ATP) and TransAlta Corp (TSX-TA). The Telecom type companies are generally cheaper than their relative historical average price, but I think that there might be future instabilities in this section as the company seems determined to introduce more competition. I must admit that so far the government has been unsuccessful at this.
On my other blog I am today writing about Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)...continue...
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. Follow me on Twitter.
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 my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
Of the Consumer Discretionary stocks I follow there is a few that are cheaper than their relative historical average price. These stocks would be Molson Coors Canada (TSX-TPS.B) and Thomson Reuters Corp (TSX-TRI). The other cheap Consumer Discretionary stocks are probably cheap for good reasons.
A number of Consumer Staple stocks seem to be cheap. Examples would be Dorel Industries (TSX-DII.B A) and Metro Inc. (TSX-MRU). (Please note that Canada Bread (TSX-CBY) has been bought out.)
The banks mostly seem to be cheaper than their relative historical average price. AGF Management Ltd (TSX-AGF.B) is probably cheap for good reason, but IGM Financial (TSX-IGM), Power Corp (TSX-POW) and Power Financial (TSX-PWF) are cheaper than their relative historical average price.
The stocks showing cheap in the Industrial section are probably cheap for good reasons. There are not many companies cheap in the Tech sector except for small companies like Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
A number of energy stocks also seem cheap. Examples are Canadian Natural Resources (TSX-CNQ); Cenovus Energy Inc. (TSX-CVE) and Suncor Energy (TSX-SU). From the stocks I follow, 4 of 6 which are cheap on a relative historical basis are energy stocks.
The infrastructure type utility companies are not cheap. What utility companies that are cheap, seem to be cheap for a good reason. Examples are Atlantic Power Corp (TSX-ATP) and TransAlta Corp (TSX-TA). The Telecom type companies are generally cheaper than their relative historical average price, but I think that there might be future instabilities in this section as the company seems determined to introduce more competition. I must admit that so far the government has been unsuccessful at this.
On my other blog I am today writing about Canadian Natural Resources (TSX-CNQ, NYSE-CNQ)...continue...
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. Follow me on Twitter.
Monday, May 5, 2014
Dividend Stocks May 2014
I have made changes to the spreadsheet to make it easier to navigate.
On this list,
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) 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 average 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.
However, 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. They are 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.
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 Stocks . 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 am today writing about Veresen Inc. (TSX-VSN, OTC-FCGYF) continue...
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. Follow me on Twitter.
On this list,
- I have 6 stocks with a dividend yield higher than the historical high dividend yield,
- I have 44 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.
- 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.
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) 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 average 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.
However, 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. They are 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.
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 Stocks . 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 am today writing about Veresen Inc. (TSX-VSN, OTC-FCGYF) continue...
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.
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