Streams of Income

A theory in personal finance is that you should have more than one stream of income. A job only gives you one stream of income and if you lose that surviving can be tough.

Personally, I just invested in dividend paying stocks to get another stream of income when I was working. I invested in different industries, but it was only in the stock market. At one point I was making more in net income (income less taxes) from my investment portfolio than my job. That was when I stopped working.

What I liked about investing was investigating companies. There was nothing online at that time, after all this was in the late 1970's, so I spent a lot of time at Metro Library. I did not get connected to the internet at home until 1994. At that time is was all dial up networking. I know that www programming was out there but I saw nothing of it at first.

It was interesting getting on the internet. I convinced my boss that if I learned how to use the internet it would increase my marketability as an employee and therefore I would be worth more to the company. What better way to learn the internet than for me to have a modem attached to my home computer? My company paid for the modem. Someone told me about Pathway Communications. Through them I got internet access for $10 a month. But this is really off the subject.

I should go back to talking about streams of income. People can get other streams of income in different ways. Some get a part-time job. Some invest in real estate. Today you can get small and large jobs through the internet.

For me, I still love investigating companies and reviewing the companies where I have shares. I loved my job, but I was much more interested in reading and investing. I think that what people need to do is to discover what they are passionate about and then try to find a way of making some money from it.

On my other blog I am today writing about Wajax Corp. (TSX-WJX, OTC- WJXFF) ... 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.

Income Trusts

Recently the Buy and Sell Advisor suggested that investors buy Income Trusts (or old income trusts as most of these, except REITs are now corporations). A lot have done well with the new tax changes.

In each category of Power Generation Trusts, Pipeline Trusts, Oil and Gas Trusts, Business Income Trusts and Real Estate Trusts they recommend at least one stock. They also recommend a couple of mutual funds that invest in these companies.

On my other blog I am today writing about MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF) ... 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.

Starting Out Investing 2

This is second part of my entry on Starting Out Investing. This first part of the entry is here.

The next question to answer is how well did I do with my investing with borrowed money? Since 2003, I have taken out $53,850.93 from my line of credit. I have paid some $4,518.34 so far in interest and my current debt is at $9,449.27 and I have paid to my line of credit $48,920.00 to date. So the stocks I have bought cost $53,850.93 plus the interest to date of $4,518.34 or a total of $58,369.27.

As of the 28 August 2015, the stocks I bought this way were worth $91,209.09 and with the current dividends I have a dividend yield of 4.04%. As of this date my compounded capital gains is at 7.92%. If you include interest paid my compounded capital gains are 6.80%. This is not my total return as I have not included dividend income.

Current the stock market is going down. At the end of 2014 the stocks I bought were worth $100,439.39 and I had paid $50,870.94 for the stocks. At the end of 2013 the stocks I bought were worth $87,114.29 and I had paid $46,979.95 for the stocks. At the end of 2012 the stocks I bought were worth $86,900.00 and I had paid $39,975.96.

What I have done above matches what I did in my current portfolio. I started in 1975 and had invested $52,779.49 by 1985 and my portfolio had a value of $97,304.66.

See the full spreadsheet here. Please note that this mini portfolio is not a balanced one. I was buying more stocks for my trading account and I often, but not always, bought more stock of what I already owned.

On my other blog I am today writing about Smart REIT (TSX-SRU.UN, OTC-CWYUF) ... 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.

Real Investors

Sorry I forgot to post this yesterday.

This article in Peer Finance 101 has a title of "Why Real Investors Don't Worry about a Stock Market Crash". I must admit I do not fear stock market crashes. I have been through a number of them since I started to invest in the late 1970's.

I generally invest in good dividend paying stocks and they have a tendency to bounce back after a bear market. Of course some get hit harder than others in a bear market. Because of bear markets, some stocks will decrease, delete or keep flat their dividends. Other will increase dividends. Generally, over time my dividends have increased.

The author of this piece is Joseph Hogue, an investment analyst by profession. He makes two basic points of know your risk level and diversify. I certainly know my risk level. I have diversification, but currently I have no bonds as interest rates are low. I used to own bonds. I do not know if I will in the future because I do not know what the future will bring.

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.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

WorldCom Fraud

There is an article in Value Walk about the Top Ten Investment Scams Ever. Number one is about WorldCom and Bernard Ebbers who caused investors to lose $100 billion. WorldCom was one of the few US investments I had. I basically lost the full $7,091.50 US$ I invested in this company in 1997.

The article said that the lesson to be learned is to ensure the business is not being creative with normal operating costs. This sort of fraud is not that easy to detect. All you can really look for is unusual changes.

However, before it went bankrupt the stock price did drop like a stone. The share price was $53.25 at the end of 1999, by the end of 2001 the share price was $14.43, by the end of 2002 the share price was $10.02, by the end of 2003 the share price was $0.16 and the end of 2004 the share price was $0.03.

If you invest, not all investments are going to work out. What is important is that overall you make money. When you invest in a company that does poorly, you can only lose what you have invested. If a company does well there is no limit to what you can earn.

This was also one of the few stocks I bought that did not have dividends. Now, except for a few short term holdings of mostly tech stocks buys, all my buys are dividend paying stocks and mostly dividend growth stocks.

I had another US Tech stock of Solectron Corp that is no longer on the US stock exchange that I lost money on. I also had Nokia as an ADR on the NYSE that I got a 2.32% per year return on between 1999 or 2006. However, I did make money on Blackberry which was RIM when I had it. I no longer do much US investing.

I would have done a lot better if I had stuck to Canadian dividend growth stocks. But I do not regret my investment past. I had fun and I learned a lot.

On my other blog I am today writing about Exchange Income Corp. (TSX-EIF, OTC-EIFZF) ... 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.

Update Notes

When I review stock price and dividends each month, I also take the opportunity to look at a bit closer at some of the stocks I cover. These some of the stocks I looked at more closely.

Automodular Corp. (TSX-AM.H, OTC-AMZKF)

This company is now listed on NEX Exchange with Symbol of AM.H. I got an offer from the company in which they offer to buy shares worth up to $15M at a price of $2.55 to $2.65 per share. I have until September 17, 2015 to decide. They cannot buy all outstanding shares.

I do not plan to submit my shares. I only have 500 and I want to see where this goes. It is interesting that the shares are trading at just $1.88. There is a news release on this on Automodular's site.

Barclays PLC (NYSE-BCS)

I have this British stock as an ADR on the US New York exchange. Dividends are done differently than in Canada and US. Here I get a big dividend as the first dividend of the year and then three smaller dividends. The bank talks about three equal payments and a final one in the New Year because of financial results of the prior year.

Some sites are showing the annual dividend on this stock moving from $0.40 US$ last month to $0.46 US$ this month. I looked at Barclay's web site and there is no indication of any dividend increase and the current annual dividend of £0.065 translates to $0.40 US$ at the current exchange rate of 1.5194 for US$ to UK£. So I am not changing my spreadsheet.

Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI)

This company was just spun off of First Service Corp. They have changed their dividends from a quarterly dividend of $0.40 per year to a semi-annual one of $0.08 US$ per year. As far as I can see they have paid two dividends of $0.10 US$ this year and the next dividend will be paid in January 2016 for $0.04 US$

Exchange Income Corp. (TSX-EIF, OTC-EIFZF)

What caught my eye on this stock is that just after the dividend rate was given a payout ratio of 2208.53%. I looked at my spreadsheet and the Dividend Payout Ratio for EPS for 2012 and 2013 were 130% and 400%. I have not yet updated my spreadsheet for 2014 financials. Apparently the 12 month EPS to the last quarter is negative. For this year EPS is expected to be quite good.

EPS for 2014 was $0.37 and the estimate still for 2015 is good at $1.65 but will not cover dividends. The dividends to be paid out in 2015 are in total $1.82. The dividends for 2016 now stand at $1.92 the full new rate and in 2016 EPS estimate is $2.16.

Cash Flow per Share for 2013 was negative and so did not cover dividends. CFPS for 2014 was at $4.51 so at least this will cover the dividends.

On my other blog I am today writing about Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF) ... 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.

Something to Buy September 2015

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.

However, no system is perfect. But if you are interested in buy 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 my spreadsheet at here 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.

I follow 19 stocks in the consumer discretionary category. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. This has not changed from last month; however, this company has only been paying dividends for 7 years. Five stocks (or 26%) are showing cheap by the historical average dividend yield, 8 (or 42%) are showing cheap by historical median dividend yield and 5 (or 26%) are showing cheap by 5 year median dividend yield.

I follow 10 Consumer Staples stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 20%) are showing cheap by the historical average dividend yield, 3 (or 30%) are showing cheap by historical median dividend yield and 2 (or 20%) are showing cheap by 5 year median dividend yield.

I only follow two Health Care stocks and both are US stocks. They are both only cheap by the historical average dividend yield and the historical median dividend yield.

I follow 12 Real Estate stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by the historical average dividend yield, 5 (or 42%) are showing cheap by historical median dividend yield and 7 (or 58%) are showing cheap by 5 year median dividend yield.

I follow 6 Bank stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 67%) are showing cheap by the historical average dividend yield, 5 (or 83%) are showing cheap by historical median dividend yield and all 6 (or 100%) are showing cheap by 5 year median dividend yield.

I follow 12 Financial Service stocks. One is now showing as cheap by the historically high dividend yield and that is Home Capital Group. Four stocks (or 33%) are showing cheap by the historical average dividend yield, 8 (or 67%) are showing cheap by historical median dividend yield and 8 (or 67%) are showing cheap by 5 year median dividend yield.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Three stock (or 60%) is showing cheap by the historical average dividend yield, 4 (or 80%) are showing cheap by historical median dividend yield and none are showing cheap by 5 year median dividend yield.

I follow 34 Industrial stocks. Three are now showing as cheap by the historically high dividend yield (or 09%). Ten stocks (or 29%) are showing cheap by the historical average dividend yield, 11 (or 32%) are showing cheap by historical median dividend yield and 13 (or 38%) are showing cheap by 5 year median dividend yield.

I follow 7 Tech stocks. One is showing as cheap by the historically high dividend yield and that is Calian Technologies Ltd. (TSX-CTY). Four stocks (or 57%) are showing cheap by the historical average dividend yield, 3 (or 43%) cheap by historical median dividend yield and cheap by 5 year median dividend yield.

I follow 10 Energy stocks. Four Stocks or (40%) are showing as cheap by the historical high dividend yield, 6 stocks (or 60%) are showing cheap by the historical average dividend yield, 6 (or 60%) are showing cheap by historical median dividend yield and 7 (or 70%) are showing cheap by 5 year median dividend yield. Fewer are showing cheap than last month.

I follow 2 Material stocks. One is showing as cheap by the historically high dividend yield and that is Teck Resources Ltd. It is also the only one that is showing cheap by the historical average dividend yield, and is showing cheap by historical median dividend yield and is showing cheap by 5 year median dividend yield.

I follow 8 of the infrastructure type utility companies. One (or 13%) is showing cheap by historical average dividend yield, 2 (or 25%) are showing cheap by historical median dividend yield, 6 stocks (or 75%) are showing cheap by 5 year median dividend yield and that is it. There are a lot more showing cheap than last month.

I follow 12 of the power type utility companies. One is now showing as cheap by the historically high dividend yield and that is TransAlta Corp. Two stock (or 17%) is showing cheap by the historical average dividend yield, 3 (or 25%) are showing cheap by historical median dividend yield and 7 (or 58%) are showing cheap by 5 year median dividend yield. This is better than last month.

I follow 5 of the Telecom Service type utility companies. One stocks (or 20%) is showing cheap by the historical high dividend yield, 3 stocks (or 60%) is showing cheap by the historical average dividend yield, 4 (or 80%) are showing cheap by historical median dividend yield and 2 (or 33%) are showing cheap by 5 year median dividend yield.

On my other blog I am today writing about Evertz Technologies (TSX-ET, OTC-EVTZF) ... 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 Stocks September 2015

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 September 2015.

On this list,

• I have 13 stocks with a dividend yield higher than the historical high dividend yield,
• I have 51 stocks with a dividend yield higher than the historical average dividend yield
• I have 65 stocks with a dividend yield higher than the historical median dividend yield and
• 67 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list last month,

• I have 10 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 58 stocks with a dividend yield higher than the historical median dividend yield and
• 59 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.

Of the stock that I follow 7 stocks have raised their dividends since last month. Dividends raises are denoted in green. The stocks that have increased their dividends are shown below.

Emera Inc. (TSX-EMA, OTC-EMRAF)
Royal Bank of Canada (TSX-RY, NYSE-RY)
Saputo Inc. (TSX-SAP, OTC-SAPIF)
Bank of Nova Scotia (TSX-BNS, NYSE-BNS
Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF)

Exchange Income Corp. (TSX-EIF, OTC-EIFZF)
Keyera Corp (TSX-KEY, OTC-KEYUF)

Of the stock that I follow 3 stocks have decreased their dividends since last month. Barrick Gold Corp. (TSX-ABX, NYSE-ABX) has decreased their dividend. Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI) have cut dividends and will now pay semi-annual dividends starting in January 2016. Crescent Point Energy Corp. (TSX-CPG, OTC-CSCTF) has also decreased their dividend for September 2015 to $0.10 from $0.23.

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.

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 am today writing about Evertz Technologies (TSX-ET, OTC-EVTZF)... 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.

Starting Out Investing

What I want to point out is one possible method of funding a portfolio. This is the method I have used recently. When I first started to invest I paid monthly for a Canadian Savings Bond, cash it in when it was due in November of the following year and used that money to buy stocks. I repeated this process a number of times. It was a way of saving to buy stocks.

After I stopped working in 1999, I did not reinvest any money; I just lived on my dividends. However, in 2003 I decided to start reinvesting some of my dividend income. The way I did it was to use my $10,000 line of credit. When I had enough money in my line of credit to purchase something I did so. I made a payment to my line of credit above the interest due each month.

The amount I paid each month varied from $200 to my current monthly payments of $400 a month. The following table shows by year the amount I paid in interest, the payments I made to my line of credit and the average monthly payment I made each year. The last line for 2015 shows what I have done to date.

Year	Interest	Payments	Av Mthly
2003	$410.35	$2,735.54	$227.96
2004	$265.42	$3,024.00	$252.00
2005	$325.05	$2,979.00	$248.25
2006	$573.95	$3,600.00	$300.00
2007	$487.89	$3,502.00	$291.83
2008	$220.62	$3,600.00	$300.00
2009	$174.27	$2,400.00	$200.00
2010	$322.37	$5,479.46	$456.62
2011	$394.65	$4,000.00	$333.33
2012	$387.04	$4,800.00	$400.00
2013	$376.80	$4,800.00	$400.00
2014	$372.51	$4,800.00	$400.00
2015	$207.42	$3,200.00	$400.00

What I bought is shown below. Note that this is not a balance portfolio. I was adding to an existing portfolio. In 2006 I sold Summit REIT because the company was being brought out. I did not want the new company's stock. I also sold Ensign Energy in 2014 because I liked Mullen Group better.

When I did not buy board lots (100 shares) under a stock it is because only part of my purchase was funded from my Line of Credit. Funding could come from money from my RRSP account, extra money in my emergency fund, extra dividends or sales of other stock.

Name	Symbol	Date	Ln of Cr	Fr Sales	Shares
Summit REIT	SMU.UN	5-Feb-03	$9,095.00		600
Enbridge Inc.	ENB	12-Jul-05	$7,183.00		200
Leon' Furniture	LNF	19-Jun-06	$3,000.00		68
Summit REIT	SMU.UN	26-Sep-06			600
CDN Real Estate	REF.UN	26-Sep-06		$17,931.90	680
Atlas Gas	ALA	22-May-09	$4,806.99		300
Atlas Gas	ALA	5-Nov-09	$5,000.00		274
Manulife Financial Corp	MFC	8-Oct-10	$1,900.00		151
Canadian Tire Corp	CTC.A	29-Dec-10	$3,359.98		50
TECSYS	TCS	23-Feb-11	$950.00		492
AG Growth Intl. Inc.	AFN	23-Dec-11	$2,500.00		67
SNC-Lavalin	SNC	25-May-12	$2,180.99		55
CDN Natural Resources	CNQ	10-May-13	$3,260.99		100
Ensign Energy	ESI	6-Jun-13	$1,500.00		91
Leon' Furniture	LNF	10-Dec-13	$2,243.00		166
RioCan REIT	REI.UN	2-Oct-14	$2,569.99		100
Ensign Energy	ESI	22-Dec-14			91
Mullen Group Ltd.	MTL	22-Dec-14		$939.73	47
Mullen Group Ltd.	MTL	22-Dec-14	$1,321.00		66
Saputo Inc	SAP	17-Jul-15	$2,979.99		100

See the full spreadsheet here. Again, please note that this mini portfolio is not a balanced one. I was buying more stocks for my trading account and I often, but not always, bought more stock of what I already owned.

In a second post I will talk about how this portfolio did.

On my other blog I am today writing about Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) ... 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.