Monday, September 15, 2014

Dividends Covering Costs

Last week I talked about another way to view dividends and it was to see how they covered the cost of purchasing stock. I decided to look at my portfolio and see what of my stocks I might have gotten for free or at a good discount. See my blog post about a possible different way of viewing dividends is here.

Coming up with how much of your stock costs can be covered by the dividend is not as straight forward as I initially thought I would be. The problem is that for a lot of stocks there is just not one purchase date and no further action. Some stocks I bought over time. Some stocks I sold part of my holdings and often because the stock value grew so that it was too large a portion of my portfolio. Some stocks had spin offs.

Here are the initial results. I hope to look at all my stocks this way.

Name Sym DPS % Pd Yrs H
Ag Growth International AFN $6.40 18.2% 2.85
AltaGas Ltd ALA $5.47 24.7% 4.77
Automodular Corp. AM $0.68 33.1% 2.64
Bank of Montreal BMO $51.73 710.6% 30.91
Barclays PLC (UK£, US$) BCS $19.00 72.0% 14.48
Barrick Gold Corp. ABX $0.41 2.2% 0.95
BCE BCE $60.26 381.9% 31.88
BCE BCE $25.08 69.1% 15.27
Bombardier Inc. BBD.B $1.68 310.7% 26.80
Canadian National Railway CNR $4.80 25.7% 9.15
Computer Modelling Group Ltd CMG $1.58 50.0% 6.14
Progressive Waste Solutions BIN $3.42 13.7% 6.80

The Titles I used have means as follows: DPS = Dividends per Share paid % Pd = Percentage of share cost paid by dividends Yrs H = number of years I have held shares to 2 decimals.

Trying to figure out what dividends I got from BCE is certainly not straight forward. I sold off some of my stock in 2005 and there were two spin off stocks of Nortel and Bell Aliant. I took into consideration the dividends from Nortel and Bell Aliant, but not what I got for Nortel and Bell Aliant stock I sold.

If for the first BCE stock, I included the price I got for selling the stock, as this stock was a spin off and could be considered like a dividend, the DPS comes to $66.75 and the % paid by dividends would be 423.02%. There is a bigger difference in my second set of BCE stock if I include the price for the spin off stock I sold. This is because for this second set of BCE stock, I sold Nortel shortly after receiving it as I had too much Nortel stock. In this case the DPS would be $171.24 and the % paid by dividends would be 471.81%.

Some stock has done better than others. Look at the figures for CNR. I have held that for 9 years and dividends have paid for 25.7% of my stock's price. For CMG, I have held this for only 6 years and dividends have paid for 50% of my stock's price.

On my other blog I am today writing about High Liner Foods (TSX-HLF, OTC-HLNFF) ... 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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