In this recent article Brett Owens on the Contrarian Outlook makes some valid comments on the problems with the notion you can withdraw 4% from your capital in retirement. However, unfortunately he ends up trying to sell you some other products.
I started off taking out 4% of my portfolio when I stopped working. After 2000 and 2008 bear markets, I decided I only wanted to take out my dividend income. A couple of things happened. I have dividend growth stocks and the dividends were growing faster than inflation and more importantly faster than my budget. I also repositioned my portfolio to get a higher overall dividend yield. I sold some low dividend stocks and bought some REITs.
There is a tradeoff between high and low dividend yield stocks and dividend growth. Dividends tend to grow faster on lower dividend yield stocks. REITs tend to have high dividends and growth rates just over the rate of inflation.
I did a number of articles in the past on this subject. In August of 2013 I wrote that in trying to figure out how to handle retirement, I came across the 8%, 4% rule. See my entry was called Retiring using 8%, 4% Rule.
I also wrote again about the 4% rule in May 2015. This was prompted by at that time current article in the New York Times that talked about the 4% Withdrawal Rule. The title is "New Math for Retirees and the 4% Withdrawal Rule". Basically the article thinks that we have to rethink the 4% rule because of low interest rates that are likely to persist for some time.
On my other blog I wrote yesterday about Intact Financial Corp (TSX-IFC, OTC-IFCZF)... learn more. Tomorrow, I will write about Saputo Inc. (TSX-SAP, OTC-SAPIF)... learn more on June 29, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
Tuesday, June 28, 2016
Thursday, June 23, 2016
Dividend Growth
This article by Bob Carrick in the Globe and Mail talks about how dividends had much better growth in 2007 than today. One thing he does not mention is inflation rates compared to dividend growth. According to the Bank of Canada inflation is really low compared to the past.
I also have experienced a slowdown of dividend growth for my portfolio since 2007. My 5 year median dividend growth was 12.91% in 2007. My 5 year median growth in 2015 was 9.23%. My dividend growth so far this year is 5.03%. However, my 5 year median growth to 2002 was 9.73%. Also, my best 5 year dividend growth rate was in 2009 and 2010 (a tie) with growth at 14.94%.
In this first table I am showing what happen in connection with dividends in 2007 for the stocks I own and the stocks that I follow. For the stocks that I own I had no dividend decreases, 82% of the stocks had dividend increases and 6% had no change. The N/A is because some of the stock had no dividend; mostly this was because they were not paying any. An example would have been Goodfellow. I bought this stock in 2013 after it started to pay dividends in 2009. It paid no dividends in 2007.
The last two columns of this chart are showing what happened for all the stocks that I follow. In 2007, 4% had dividend decreases, 70% had dividend increases, 15% had no change in dividends and 11% had no dividends.
In any year that dividends are reduced to zero, it would show up as a decrease in the year dividends were cut and then show as no dividends in the following year.
This next table is showing what happened in connection with dividends in 2015. In that year 10% of my stocks decreased their dividends, 56% of my stock increased their dividends, 32% of my stocks had no dividend change and 2% paid no dividends. If dividends were reduced to zero in 2015, it would show as a decrease.
The last two columns of this chart are showing what happened for all the stocks that I follow. In 2015, 9% had dividend decreases, 56% had dividend increases, 32% had no change in dividends and 3% had no dividends.
It would seem that there were more increases and fewer decreases in 2007 than in 2015. I have not included dividend changes in 2016 as all the data is not in for that year. The reason for the fewer stocks with no dividends in 2016 is because I started to follow a number of stocks after they started to pay dividends. Currently I follow 13 stocks with zero dividends of which of which 3 never had dividends. With my stocks, I current have 5 with no dividends with 1 stock never having any dividends.
On my other blog I wrote yesterday about Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more. Tomorrow, I will write about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Friday, June 24, 2016 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 also have experienced a slowdown of dividend growth for my portfolio since 2007. My 5 year median dividend growth was 12.91% in 2007. My 5 year median growth in 2015 was 9.23%. My dividend growth so far this year is 5.03%. However, my 5 year median growth to 2002 was 9.73%. Also, my best 5 year dividend growth rate was in 2009 and 2010 (a tie) with growth at 14.94%.
In this first table I am showing what happen in connection with dividends in 2007 for the stocks I own and the stocks that I follow. For the stocks that I own I had no dividend decreases, 82% of the stocks had dividend increases and 6% had no change. The N/A is because some of the stock had no dividend; mostly this was because they were not paying any. An example would have been Goodfellow. I bought this stock in 2013 after it started to pay dividends in 2009. It paid no dividends in 2007.
The last two columns of this chart are showing what happened for all the stocks that I follow. In 2007, 4% had dividend decreases, 70% had dividend increases, 15% had no change in dividends and 11% had no dividends.
In any year that dividends are reduced to zero, it would show up as a decrease in the year dividends were cut and then show as no dividends in the following year.
| Action | Me % | Me No. | All % | All No. |
|---|---|---|---|---|
| Decrease | 0% | 0 | 4% | 6 |
| Increase | 82% | 41 | 70% | 106 |
| No Change | 6% | 3 | 15% | 23 |
| n/a | 12 | 6 | 11% | 17 |
| Total | 100% | 50 | 100% | 152 |
This next table is showing what happened in connection with dividends in 2015. In that year 10% of my stocks decreased their dividends, 56% of my stock increased their dividends, 32% of my stocks had no dividend change and 2% paid no dividends. If dividends were reduced to zero in 2015, it would show as a decrease.
The last two columns of this chart are showing what happened for all the stocks that I follow. In 2015, 9% had dividend decreases, 56% had dividend increases, 32% had no change in dividends and 3% had no dividends.
| Action | Me % | Me No. | All % | All No. |
|---|---|---|---|---|
| Decrease | 10% | 5 | 9% | 14 |
| Increase | 56% | 28 | 56% | 85 |
| No Change | 32% | 16 | 32% | 48 |
| n/a | 2% | 1 | 3% | 5 |
| Total | 100% | 50 | 100% | 152 |
It would seem that there were more increases and fewer decreases in 2007 than in 2015. I have not included dividend changes in 2016 as all the data is not in for that year. The reason for the fewer stocks with no dividends in 2016 is because I started to follow a number of stocks after they started to pay dividends. Currently I follow 13 stocks with zero dividends of which of which 3 never had dividends. With my stocks, I current have 5 with no dividends with 1 stock never having any dividends.
On my other blog I wrote yesterday about Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more. Tomorrow, I will write about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Friday, June 24, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
Thursday, June 16, 2016
Buy Backs
Although buy backs is not my favourite thing for a company I own to do, an article in the Daily Buy and Sell Adviser talks about 7 reasons you profit from share buybacks. The article is here.
I would rather that company be a dividend growth company than do Buy Backs. I think that mostly companies do not buy back at the opportune time when stock prices are low. This cannot be a good thing for shareholder. Also doing Buy Backs can artificially raise EPS and CFPS. That is implying growth when it is not there. This is not good either.
That said, it is worthwhile always to take a look at what people are staying about a subject, especially if they have a different point of view.
On my other blog I wrote yesterday about Algonquin Power & Utilities Corp (TSX-AQN, OTC- AQUNF)... learn more. Tomorrow, I will write about CI Financial Corp (TSX-CIX, OTC- CIFAF)... learn more on Friday, July 17, 2016 date around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
I would rather that company be a dividend growth company than do Buy Backs. I think that mostly companies do not buy back at the opportune time when stock prices are low. This cannot be a good thing for shareholder. Also doing Buy Backs can artificially raise EPS and CFPS. That is implying growth when it is not there. This is not good either.
That said, it is worthwhile always to take a look at what people are staying about a subject, especially if they have a different point of view.
On my other blog I wrote yesterday about Algonquin Power & Utilities Corp (TSX-AQN, OTC- AQUNF)... learn more. Tomorrow, I will write about CI Financial Corp (TSX-CIX, OTC- CIFAF)... learn more on Friday, July 17, 2016 date around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
Tuesday, June 14, 2016
Don't Die Broke
I thought this article in Daily Buy Sell Adviser was an interesting one.
The author suggests talking a fixed percentage out of you portfolio each year. I think that investors should think carefully about how to use an investment portfolio for retirement. You do not want to be 90 and broke.
When I stopped working to live off my dividends, the rage was all about the 8%, 4% rule, or just the 4% rule. I wrote about Using 8%, 4% Rule and about the 4% Rule in the past.
I stopped working and started to live on my portfolio in 1999. I began by taking out 4% of my portfolio because of articles I had read. However, in both the 2000 and 2008 bear markets my portfolio lost around 30% of their value. They did recover nicely, but I also do not want to be 90 and broke, so now I only take out what I earn.
I have to take a certain amount out because I have RRIF accounts. However, I do not have a budgeted withdrawal from my Investment Accounts that is higher than my overall income. Generally, I use what I earn in the previous year to target what I will take out for spending.
On my other blog I wrote yesterday about Canexus Corporation (TSX-CUS, OTC-CXUSF)... learn more. Tomorrow, I will write about Algonquin Power & Utilities Corp (TSX-AQN, OTC- AQUNF)... learn more on Wednesday, June 15, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Ottoman Endgame by Sean McMeekin learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
When I stopped working to live off my dividends, the rage was all about the 8%, 4% rule, or just the 4% rule. I wrote about Using 8%, 4% Rule and about the 4% Rule in the past.
I stopped working and started to live on my portfolio in 1999. I began by taking out 4% of my portfolio because of articles I had read. However, in both the 2000 and 2008 bear markets my portfolio lost around 30% of their value. They did recover nicely, but I also do not want to be 90 and broke, so now I only take out what I earn.
I have to take a certain amount out because I have RRIF accounts. However, I do not have a budgeted withdrawal from my Investment Accounts that is higher than my overall income. Generally, I use what I earn in the previous year to target what I will take out for spending.
On my other blog I wrote yesterday about Canexus Corporation (TSX-CUS, OTC-CXUSF)... learn more. Tomorrow, I will write about Algonquin Power & Utilities Corp (TSX-AQN, OTC- AQUNF)... learn more on Wednesday, June 15, 2016 around 5 pm.
Also, on my book blog I have put a review of the book The Ottoman Endgame by Sean McMeekin learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
Thursday, June 9, 2016
Something to Buy June 2016
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 Something to Buy June 1016 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).
I follow 21 stocks in the Consumer Discretionary category. Two new stocks were added to this sector. They are Goeasy Ltd. (TSX-GSY, OTC-EHMEF) and Liquor Stores N.A. (TSX-LIQ, OTC-LQSIF).
Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Seven (or 33%) are showing cheap by historical median dividend yield. They are Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF); Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI). Canadian Tire Corporation (TSX-CTC.A); is no longer showing as cheap by historical median dividend yield.
I follow 11 Consumer Staples stocks. None of these stocks are showing as cheap by the historically high dividend yield. Two stocks (or 18%) are showing cheap by historical median dividend yield. These are Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L). Last month Loblaw Companies (TSX-L, OTC-LBLCF) was showing as cheap by the historical median dividend yield.
I only follow two Health Care stocks and both are US stocks. 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 7 Bank stocks. None are showing as cheap by the historically high dividend yield. Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD). There is no change from last month.
I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Six (or 50%) stocks are showing cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B); CI Financial (TSX-CIX); DirectCash Payments Inc. (TSX-DCI); Gluskin Sheff + Associates Inc. (TSX-GS); IGM Financial (TSX-IGM) and Power Corp (TSX-POW); Equitable Group Inc. (TSX-EQB) and TMX Group Ltd. (TSX-X) was on this list last month.
I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change from last month.
I follow 12 Real Estate stocks. No stock is showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. There is no change from last month.
I follow 35 Industrial stocks. I have one new stock under Manufacturing and that is Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF). 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 67% are showing as cheap by historical median dividend yield. They are SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). Last month. Bird Construction Inc. (TSX-BTD, OTC-BIRDF) and Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF) had also shown as cheap by historical median dividend yield.
I have 6 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT), Methanex Corp. (TSX-MX), and Russel Metals (TSX-RUS). There is no change from last month.
I have 10 Manufacturing stocks. One stock is showing as cheap by the historically high dividend yield and that is Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF). Four stocks or 40% 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). Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF) are new to showing as cheap by historical median dividend yield.
I have 15 Services stocks. One is showing as cheap by the historically high dividend yield and that is Pason Systems Inc. (TSX-PSI, OTC-PSYTF). Four stocks or 27% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI); Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Last month Mullen Group (TSX-MTL, OTC-MLLGF) was showing as cheap by historical median dividend yield.
I follow 9 Energy stocks. Two Stocks or (22%) are showing as cheap by the historical high dividend yield. They are Ensign Energy Services (TSX-ESI); and Suncor Energy (TSX-SU). There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ); Ensign Energy Services (TSX-ESI); and Suncor Energy (TSX-SU). There is no change from last month.
I follow 3 Material stocks. None are showing as cheap by the historically high dividend yield. None are cheap by historical median dividend yield. This has not changed from last month.
I follow 8 Tech stocks. None are showing as cheap by historical median dividend yield. Four stocks (or 50%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF); Calian Technologies Ltd (TSX-CTY, OTC-CLNFF), Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF) and Evertz Technologies (TSX-ET, OTC-EVTZF). There is no change from last month.
I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF); Enbridge Inc. (TSX-ENB, NYSE-ENB), and Veresen Inc. (TSX-VSN, OTC-FCGYF). TransCanada Corp (TSX-TRP, NYSE-TRP) is no longer showing on this list.
I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. One stock (or 8%) are showing cheap by historical median dividend yield. That stock is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). Fortis Inc. (TSX-FTS, OTC-FRTSF) is no longer showing on this list.
I follow 5 of the Telecom Service type utility companies. On stock is showing cheap by the historical high dividend yield. Last month Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) was showing on this list. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN).
The last stock I wrote about was about was Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more . The next stock I will write about will be Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more on Friday, June 10, 2016 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.
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 Something to Buy June 1016 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).
I follow 21 stocks in the Consumer Discretionary category. Two new stocks were added to this sector. They are Goeasy Ltd. (TSX-GSY, OTC-EHMEF) and Liquor Stores N.A. (TSX-LIQ, OTC-LQSIF).
Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Seven (or 33%) are showing cheap by historical median dividend yield. They are Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF); Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI). Canadian Tire Corporation (TSX-CTC.A); is no longer showing as cheap by historical median dividend yield.
I follow 11 Consumer Staples stocks. None of these stocks are showing as cheap by the historically high dividend yield. Two stocks (or 18%) are showing cheap by historical median dividend yield. These are Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L). Last month Loblaw Companies (TSX-L, OTC-LBLCF) was showing as cheap by the historical median dividend yield.
I only follow two Health Care stocks and both are US stocks. 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 7 Bank stocks. None are showing as cheap by the historically high dividend yield. Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD). There is no change from last month.
I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Six (or 50%) stocks are showing cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B); CI Financial (TSX-CIX); DirectCash Payments Inc. (TSX-DCI); Gluskin Sheff + Associates Inc. (TSX-GS); IGM Financial (TSX-IGM) and Power Corp (TSX-POW); Equitable Group Inc. (TSX-EQB) and TMX Group Ltd. (TSX-X) was on this list last month.
I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change from last month.
I follow 12 Real Estate stocks. No stock is showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. There is no change from last month.
I follow 35 Industrial stocks. I have one new stock under Manufacturing and that is Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF). 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 67% are showing as cheap by historical median dividend yield. They are SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). Last month. Bird Construction Inc. (TSX-BTD, OTC-BIRDF) and Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF) had also shown as cheap by historical median dividend yield.
I have 6 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT), Methanex Corp. (TSX-MX), and Russel Metals (TSX-RUS). There is no change from last month.
I have 10 Manufacturing stocks. One stock is showing as cheap by the historically high dividend yield and that is Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF). Four stocks or 40% 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). Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF) are new to showing as cheap by historical median dividend yield.
I have 15 Services stocks. One is showing as cheap by the historically high dividend yield and that is Pason Systems Inc. (TSX-PSI, OTC-PSYTF). Four stocks or 27% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI); Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Last month Mullen Group (TSX-MTL, OTC-MLLGF) was showing as cheap by historical median dividend yield.
I follow 9 Energy stocks. Two Stocks or (22%) are showing as cheap by the historical high dividend yield. They are Ensign Energy Services (TSX-ESI); and Suncor Energy (TSX-SU). There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ); Ensign Energy Services (TSX-ESI); and Suncor Energy (TSX-SU). There is no change from last month.
I follow 3 Material stocks. None are showing as cheap by the historically high dividend yield. None are cheap by historical median dividend yield. This has not changed from last month.
I follow 8 Tech stocks. None are showing as cheap by historical median dividend yield. Four stocks (or 50%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF); Calian Technologies Ltd (TSX-CTY, OTC-CLNFF), Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF) and Evertz Technologies (TSX-ET, OTC-EVTZF). There is no change from last month.
I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF); Enbridge Inc. (TSX-ENB, NYSE-ENB), and Veresen Inc. (TSX-VSN, OTC-FCGYF). TransCanada Corp (TSX-TRP, NYSE-TRP) is no longer showing on this list.
I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. One stock (or 8%) are showing cheap by historical median dividend yield. That stock is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). Fortis Inc. (TSX-FTS, OTC-FRTSF) is no longer showing on this list.
I follow 5 of the Telecom Service type utility companies. On stock is showing cheap by the historical high dividend yield. Last month Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) was showing on this list. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN).
The last stock I wrote about was about was Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more . The next stock I will write about will be Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more on Friday, June 10, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
Tuesday, June 7, 2016
Dividend Stocks June 2016
First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for June 2016.
Since last month, I have added 3 stocks to my list, so I now have a list of 152 stocks. They are shown below. I was hoping to pick up some good stock suggestions, but I would not consider buying Goeasy or Liquor Stores. So the best new stock I am following is the Intertape Polymer Group.
Goeasy Ltd. (TSX-GSY, OTC-EHMEF)
Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF)
Liquor Stores N.A. (TSX-LIQ, OTC-LQSIF)
On this list,
Algonquin Power & Utilities Corp (TSX-AQN, OTC-AQUNF)
Bank of Montreal (TSX-BMO, NYSE-BMO)
Canadian Real Estate (TSX-REF.UN, OTC-CRXIF)
CI Financial (TSX-CIX, OTC-CIFAF)
Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI)
EnerCare Inc. (TSX-ECI, OTC-CSUWF)
Equitable Group Inc. (TSX-EQB, OTC-EQGPF)
Exchange Income Corp. (TSX-EIF, OTC-EIFZF)
High Liner Foods (TSX-HLF, OTC-HLNFF)
Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)
Lassonde Industries (TSX-LAS.A, OTC-LSDAF)
Loblaw Companies (TSX-L, OTC-LBLCF)
National Bank of Canada (TSX-NA, OTC,-NTIOF)
Onex Corp (TSX-OCX, OTC-ONEXF)
PFB Corp (TSX-PFB, OTC-PFBOF)
Power Corp (TSX-POW, OTC-PWCDF)
Sun Life Financial (TSX-SLF, NYSE-SLF)
Telus Corp. (TSX-Tm NYSE-TU)
Of the stocks that I follow 1 company has decreased their dividends. I have denoted these dividends in red. The stocks are shown below.
Mullen Group (TSX-MTL, OTC-MLLGF)
Of the stocks that I follow 0 companies has suspended their dividends. I have denoted these dividends in red.
Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 8.78% of the stocks that I follow. Three of these stocks never had dividends, so 6.76% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
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.
The last stock I wrote about was about was Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) learn more. The next stock I will write about will be Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more on Wednesday, June 8, 2016 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.
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for June 2016.
Since last month, I have added 3 stocks to my list, so I now have a list of 152 stocks. They are shown below. I was hoping to pick up some good stock suggestions, but I would not consider buying Goeasy or Liquor Stores. So the best new stock I am following is the Intertape Polymer Group.
Goeasy Ltd. (TSX-GSY, OTC-EHMEF)
Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF)
Liquor Stores N.A. (TSX-LIQ, OTC-LQSIF)
On this list,
- I have 5 stocks with a dividend yield higher than the historical high dividend yield,
- I have 37 stocks with a dividend yield higher than the historical average dividend yield
- I have 58 stocks with a dividend yield higher than the historical median dividend yield and
- 53 stocks with a dividend yield higher than the 5 year average dividend yield.
- I have 4 stocks with a dividend yield higher than the historical high dividend yield,
- I have 40 stocks with a dividend yield higher than the historical average dividend yield
- I have 61 stocks with a dividend yield higher than the historical median dividend yield and
- 56 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.
Algonquin Power & Utilities Corp (TSX-AQN, OTC-AQUNF)
Bank of Montreal (TSX-BMO, NYSE-BMO)
Canadian Real Estate (TSX-REF.UN, OTC-CRXIF)
CI Financial (TSX-CIX, OTC-CIFAF)
Colliers International Group Inc. (TSX-CIG, NASDAQ-CIGI)
EnerCare Inc. (TSX-ECI, OTC-CSUWF)
Equitable Group Inc. (TSX-EQB, OTC-EQGPF)
Exchange Income Corp. (TSX-EIF, OTC-EIFZF)
High Liner Foods (TSX-HLF, OTC-HLNFF)
Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)
Lassonde Industries (TSX-LAS.A, OTC-LSDAF)
Loblaw Companies (TSX-L, OTC-LBLCF)
National Bank of Canada (TSX-NA, OTC,-NTIOF)
Onex Corp (TSX-OCX, OTC-ONEXF)
PFB Corp (TSX-PFB, OTC-PFBOF)
Power Corp (TSX-POW, OTC-PWCDF)
Sun Life Financial (TSX-SLF, NYSE-SLF)
Telus Corp. (TSX-Tm NYSE-TU)
Of the stocks that I follow 1 company has decreased their dividends. I have denoted these dividends in red. The stocks are shown below.
Mullen Group (TSX-MTL, OTC-MLLGF)
Of the stocks that I follow 0 companies has suspended their dividends. I have denoted these dividends in red.
Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 8.78% of the stocks that I follow. Three of these stocks never had dividends, so 6.76% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
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.
The last stock I wrote about was about was Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) learn more. The next stock I will write about will be Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more on Wednesday, June 8, 2016 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
Thursday, June 2, 2016
Keeping an Eye on Things
Somethings stocks can get into trouble in unexpected ways. One thing I keep an eye on is the relationship between long term debt and stock's market capitalization. Another item I keep an eye on is the relationship between Goodwill and Intangibles and the stock's market capitalization.
If the long term debt is equal, above or very close to the stock's market cap in a normal market, this might be a signal that the stock is in trouble. It might be a signal that the company is financially weak. In any event, this is not a good sign.
I track the relationship between a company's Goodwill and its Intangibles and the stock's market capitalization. If a company's Goodwill is greater than the stock's market cap, this may be a signal that the company needs to or will do a write down of the Goodwill on its books. When the Goodwill and /or Intangibles are greater than market cap, it would seem that the market is not valuing these items as much as the company. This is also, not a good sign.
If either of these things happens to a stock you own, you should take a good look at the company to see if it is in trouble.
On my other blog I wrote yesterday about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more. Tomorrow, I will write about IGM Financial Inc. (TSX-IGM, OTC-IGIFF)... learn more on Friday, June 3, 2016 date around 5 pm.
Also, on my book blog I have put a review of the book The Fortunes of Africa by Martin Meredith learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
If the long term debt is equal, above or very close to the stock's market cap in a normal market, this might be a signal that the stock is in trouble. It might be a signal that the company is financially weak. In any event, this is not a good sign.
I track the relationship between a company's Goodwill and its Intangibles and the stock's market capitalization. If a company's Goodwill is greater than the stock's market cap, this may be a signal that the company needs to or will do a write down of the Goodwill on its books. When the Goodwill and /or Intangibles are greater than market cap, it would seem that the market is not valuing these items as much as the company. This is also, not a good sign.
If either of these things happens to a stock you own, you should take a good look at the company to see if it is in trouble.
On my other blog I wrote yesterday about Hammond Power Solutions Inc. (TSX-HPS, OTC- HMDPF)... learn more. Tomorrow, I will write about IGM Financial Inc. (TSX-IGM, OTC-IGIFF)... learn more on Friday, June 3, 2016 date around 5 pm.
Also, on my book blog I have put a review of the book The Fortunes of Africa by Martin Meredith learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.
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