Dividend Growth 3

Dividend Growth 3

First let me give a warning note. I am only dealing with approximately 150 stocks so the sample is small. I have mostly, but not exclusively large dividend growth stocks. So it is probably best to look at this as interesting but it may not reflect what is happening in the TSX. However, I feel that it applies to me as I cover the stocks I own and also I am basically only interested in large dividend growth stocks and how they are doing.

On my Index Spreadsheet I record for each stock I follow what the dividend growth per year is for the past 5 years and for the past 10 years. In the chart below I am showing increases and decreases in growth between the 5 and 10 years growth. The implication is that if the 5 year growth is greater than the 10 year growth then dividend growth is increasing

For example if the 5 year dividend growth per year is 9% and the 10 years dividend growth is 5%, then dividend growth is higher in the past 5 years than in years 6 to 10. If growth has not change for example it was 9% per year for past 5 years and 9% per year for the past 10 years. My spreadsheet shows that few stocks have the same growth over both time periods. It also shows that stocks increasing their dividend growth are fewer at 36% than those decreasing their dividend growth which is 61%.

Current Spreadsheet	Change
Dividend growth increased	36.30%
Dividend growth decreased	61.48%
Dividend growth same	2.22%

I keep copies of my index spreadsheet each year. If I do the same analysis on my index at the end of 2015, the story is different. In this spreadsheet there are still few stocks keeping their dividends the same and amore decreasing their dividends. At the end of 2015 there were fewer dividend increases at 32%. The stocks with dividend increases are higher at 66%

Spreadsheet of 2015	Change
Dividend growth increased	32.31%
Dividend growth decreased	66.15%
Dividend growth same	1.54%

So comparing these spreadsheet results it seems that today, fewer companies are decreasing their dividends that at the end of 2015. My index for 2016 has data for stock year end of 2015 and 2014. My index for 2015 has stock year end data for 2014. We are only just over half way through the year so I have updated some 58% of the stocks I follow.

On my other blog I wrote yesterday about Canam Group Inc. (TSX-CAM, OTC-CNMGA)... learn more. Tomorrow, I will write about Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF)... learn more on Friday, July 29, 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.

Disposable Income

When you read about how poorly the young are doing, they tend to talk about how much disposable income the young have compared to the national average. Recently I was reading that 20 year olds have 20% less disposable income than the nation average and this is wide spread in the western world that is North America and Europe.

In the US the disposable income of the young is said to be growing 9% slower than the national average. In Canada the disposable income of the young is said to be growing only 4% slower than the national average.

What I would like to know how does that compare to when I was young? When I started to work in Toronto in the mid 1960's, I had to share accommodations because I could not afford to live on my own. I shared a two bedroom apartment with 3 other girls. This was quite common at that time. Today the young are either still at home or have their own apartment. I was certainly making a lot less than by father.

I have no idea how much my father was making, but my parents had a house in the suburbs of Toronto. My father had been supporting 4 children and a wife. I would also think that when I was young I had less disposal income than average.

It might be a concern that their disposal income is growing more slowly. However, I would think that the young having less disposable income than the national average would be normal. What I worry about concerning our youth is that unemployment is high.

When I started out in the mid 1960's, there were lots of jobs available. There was little in the way of worker protection. Some employers took advantage, but most did not. I started work out of Grade 12 but was able to get more education and work in the IT field and therefore ended up with a good job. Do our youth have opportunities like I did? That is the real question to answer.

On my other blog I wrote yesterday about Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE)... learn more. Tomorrow, I will write about Canam Group Inc. (TSX-CAM, OTC-CNMGA)... learn more on Wednesday, July 27, 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.

Money-Weighted Reporting

According to an article by Rudy Luukko on Morningstar Canada fund companies are going to have to start reporting clients returns on a Money-Weighted basis. For a definition you can go to Investopedia

If anyone is familiar with Excel this is how returns are calculated using XIRR. For anyone wanting a long explanation you can go to a blogger called The Calculating Investor.

By the way, my spreadsheet uses both IRR and XIRR to do calculations. IRR stands for internal rate of return. It basically gives you the compounded rate of return over a period of time. The difference between IRR and XIRR is that XIRR uses dates whereby the IRR assumes you are doing calculations based on full years. So if you have a beginning amount and an ending about with 4 spaces between with 0, then you are talking about total rate of return over 5 years.

For example, on Alaris spreadsheet I put out yesterday, I get the stock's price Internal Rate of Return of 15.09% per year with 6 cells of -$11.64, $0.00, $0.00, $0.00, $0.00, $23.50. If you add in dividends the IRR is 17.91 with 6 cells of -$11.64, $1.04, $1.17, $1.35, $1.47, $25.06. Note that the last cell includes price plus dividend. There are lots of blogs that explain excel spreadsheet functions. See this support one from Microsoft.

On my other blog I wrote yesterday Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more. Tomorrow, I will write about Lassonde Industries Inc. (TSX-LAS.A, OTC- LSDAF)... learn more on Friday, July 22, 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.

Dividend Growth 2

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.

In another post about Dividend Growth I looked at dividend increases and decreases for the 5 years to 2007 and to 2015. In this post, I want to look at my portfolio's dividend growth compared with the TSX and inflation.

In this first table I am looking at these items for the 5 year period to December 2015. This looks at my dividend growth average per year and actual growth per year and compares it to the TSX Stock Market, Inflation Total and Inflation Core growth and growth per year. The last column gives my actual dividend growth per year over the period.

Item	Grwth	Dec-15	Dec-14	Dec-13	Dec-12	Dec-11	Dec-10
Div Grwth	8.16%	7.58%	3.83%	10.53%	9.63%	9.23%	5.29%
Change		97.83%	-63.59%	9.31%	4.34%	74.47%
TSX	-0.65%	13009.95	14744.70	13621.55	12433.53	11955.09	13443.22
Change		-11.77%	8.25%	9.55%	4.00%	-11.07%
I Total	1.49%	126.5	124.5	122.7	121.2	120.2	117.5
Change		1.61%	1.47%	1.24%	0.83%	2.30%
I. Core	1.68%	126.1	123.7	121.0	119.5	118.2	116.0
Change		1.94%	2.23%	1.26%	1.10%	1.90%
Act Div Grwth	8.13%

In this second table I am looking at these items for the 5 year period to December 2007. This looks at my dividend growth average per year and actual growth per year and compares it to the TSX Stock Market, Inflation Total and Inflation Core growth and growth per year. The last column gives my actual dividend growth per year over the period.

Item	Grwth	Dec-07	Dec-06	Dec-05	Dec-04	Dec-03	Dec-02
Div Grwth	15.90%	23.21%	23.96%	7.77%	11.64%	12.91%	32.27%
Change		-3.15%	208.53%	-33.25%	-9.84%	-99.60
TSX	15.90%	13833.06	12908.39	11272.26	9246.65	8220.89	6614.54
Change		7.16%	14.51%	21.91%	12.48%	24.29%
I Total	2.07%	112.0	109.4	107.6	105.4	103.2	101.1
Change		2.38%	1.67%	2.09%	2.13%	2.08%
I. Core	1.78%	110.0	108.4	106.2	104.6	102.8	100.7
Change		1.48%	2.07%	1.53%	1.75%	2.09%
Act Div Grwth	15.71%

What looks interesting is that even with the decline of the TSX, my dividends grew on average at 8.16% per year or totally by 8.13% per year in the 5 year period to 2015. For the 5 year period to 2007, my dividends grew per year around the same amount as the TSX.

For the years heading into 2015, when the dividend increases were the lowest, the next year was negative growth for the TSX. See Year 2010 with 5.29% dividend increase and 2011 TSX decline of 11.07%. Again when the dividend growth was low in 2014 at 3.83%, the following year had the TSX decline by 11.77%.

This does not happen in the years leading into 2007. However you can see lower TSX growth when dividend declined a lot in 2003 the TSX did not raise as much as in the previous year. When the dividend growth declined some 99% in 2003, the TSX grow only 12.48% compared to the growth of 24.29% the year before. This occurred again in 2005 and 2006 when dividend growth declined by some 33% in 2005, the TSX grow only 14.51% in 2006 compared to the 21.91% of the year before. However, dividend growth was really good in 2006, but TSX only grew at the lowest level between 2002 and 2007.

I got information on inflation from the Bank of Canada

On my other blog I wrote yesterday about Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more. Tomorrow, I will write about Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more on Thursday, July 20, 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.

Value Trap

A value trap occurs because a once great stock gets into trouble that they cannot get out of. It is probably cheap because it has problems but people remember it doing great in the past and think that it is a good time to buy because it is cheap. The real problem occurs when it cannot recover from its problems.

I recently reviewed Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). This is a company that some analysts are worried about being a value trap. They are in trouble with trying to integration of Safeway. It is not yet clear that they can resolve the problems with Safeway.

I know people are always saying to buy good companies when they are cheap. How do you tell if the company is a value trap or not? Well first find out why a good company is selling cheap. If the broad market is in a bear market and a good company is cheap, it is probably not anything that the company has done. If the sector that a company is in is in a bear market, again it is probably not anything the company has done.

When you should be careful is when a company is cheap because action taken or not taken by a company. The following are some possible questions to ask. Did the company do anything wrong? Can they recover? Have they got a feasible plan? When companies have been around for a long time, sometimes they need to reinvent the company to continue.

An example of a company that got into difficulties and then put together a clear plan to resolve their problems was TransCanada Corp (TSX-TRP, NYSE-TRP). The company got into difficulties in 1999 and cut their dividend and reorganized. In 5 years' time their dividend has surpass the dividend high of 1998 and the company was again doing well. I bought it in 2000 at a very good price and did very well. Nizar Amarsi in a Morningstar article gives examples of Value Traps in Torstar Corp (TSX-TS.B) and Atlantic Power Corp (TSX-APT, NYSE-AT).

The Investopedia has a definition on this term. This site of Investopedia also has an article on how to spot value traps. This article by Chuck Carnevale in Fast Graphs is rather long and contains good information. It is interesting that he criticizes the definition in Investopedia for focusing on stock price rather than the health of a company. There is an interesting article on this subject by Edward Chancellor at Institutional Investor.

On my other blog I wrote yesterday about TMX Group Ltd (TSX-X, OTC-TMXXF)... learn more. Tomorrow, I will write about Artis REIT (TSX-AX.UN, OTC-ARESF)... learn more on Friday, July 15, 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.

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.

My stock Automodular Corp. (TSX-AM.H, OTC-AMZKF) has again buying up stocks on the open market. See the Press Release. This time they have not said at what price.

Barclays PLC

Barclays PLC (LSE-BARC, NYSE-BCS) has dropped in price a lot at almost 25%. This has to be expected because of Brexit. There is a message about this on Barclays site. They say that they will continue to deliver the Barclays of the future.

HNZ Group Inc.

HNZ Group Inc. (TSX-HNZ, OTC-CDHPF) announced that it is taking steps to improve the liquidity for its variable voting shares by aggregating the trading of its common and variable voting shares under a single ticker on the Toronto Stock Exchange symbol of HNZ.A. This replaces symbols of HNZ.A and HNZ.B.

Progressive Waste Solutions

The stock of Progressive Waste Solutions (NYSE-BIN) has amalgamated with Waste Connections. Because the old shareholders of Progressive Waste Solutions only get .4815 of a share of the new company, their dividend actually fall from 1.09% dividend yield of last month to a 0.54% dividend yield in this month. See the news release about this merger. As per a news release the change is expected to occur on June 1, 2016.

I am glad I sold by Progressive Waste Solutions stock. I would have ended up with an old lot of stocks and, more importantly, a stock with a dividend below 1%.

On my other blog I wrote yesterday about Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF)... learn more. Tomorrow, I will write about TMX Group Ltd (TSX-X, OTC-TMXXF)... learn more on Wednesday, July 13, 2016 before 9 am. (I am going out boating for the day.)

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.

Something to Buy July 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. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Eight (or 38%) 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), Newfoundland Capital Corp (TSX-NCC.A), Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI). Newfoundland Capital Corp (TSX-NCC.A) is new to this list.

I follow 12 Consumer Staples stocks. Empire Company Ltd. TSX-EMP.A, OTC-EMLAF) is showing as cheap by the historically high dividend yield. Three stocks (or 25%) 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, OTC-LBLCF).

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. Barclays PLC (LSE-BARC, NYSE-BCS) is 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). Barclays PLC's stock price drop due to Brexit and is showing as cheap by historically high dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Seven (or 58%) 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); Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS); IGM Financial (TSX-IGM) and Power Corp (TSX-POW) Equitable Group Inc. (TSX-EQB, OTC-EQGPF) is back on this list.

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 34 Industrial stocks. 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. There is one less because I have reclassified some stocks in the Material section because TSX is classifying them this way.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are SNC-Lavalin (TSX-SNC, OTC-SNCAF), Stantec Inc. (TSX-STN, NYSE-STN) and Toromont Industries Ltd (TSX-TIH, OTC-TMTNF). Last month. Toromont Industries Ltd is back on this list.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). Methanex Corp. (TSX-MX, NASDAQ-MEOH) has been reclassified as a Material stock.

I have 9 Manufacturing stocks. No stock is showing as cheap by the historically high dividend yield. Four stocks or 44% 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). Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF) is no longer cheap by historically high dividend yield.

I have 16 Services stocks. I have reclassified Parkland Fuel Corp (TSX-PKI, OTC-PKIUF) into this sector. None are showing as cheap by the historically high dividend yield. Three stocks or 38% 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).

I follow 7 Material* stocks. None are showing as cheap by the historically high dividend yield. One stock or 16% are showing as cheap by historical median dividend yield. That stock is Methanex Corp (TSX-MX, NASDAQ-MEOH).

*I have added to this sector other stocks classified as Material stock by TSX. All the stocks reclassified have their classification showing in purple. "The basic materials sector is a category of stocks that accounts for companies involved with the discovery, development and processing of raw materials. The basic materials sector includes the mining and refining of metals, chemical producers and forestry products."

I follow 9 Energy stocks. One Stock or (11%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF). There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ); Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). Suncor Energy (TSX-SU, NYSE-SU) is no longer showing as cheap by the historical high dividend yield.

I follow 7 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). There is no change from last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. One stock (or 8%) is showing cheap by historical median dividend yield. That stock is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no change from last month.

I follow 5 of the Telecom Service type utility companies. One stock is showing cheap by the historical high dividend yield. That stock is Manitoba Telecom (TSX-MBT, OTC-MOBAF). Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Manitoba Telecom (TSX-MBT, OTC-MOBAF), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). Manitoba Telecom is new on this list.

On my other blog I wrote yesterday about Empire Company Ltd (TSX-EMP.A, OTC- EMLAF)... learn more. Tomorrow, I will write about Morneau Shepell Inc. (TSX-MSI, OTC-MSIXF)... learn more on Friday, July 08, 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.

Dividend Stocks July 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 July 2016.

• I have 5 stocks with a dividend yield higher than the historical high dividend yield,
• I have 38 stocks with a dividend yield higher than the historical average dividend yield
• I have 62 stocks with a dividend yield higher than the historical median dividend yield and
• 54 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list last month,

• 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.

When I did my list in January 2014,

• I had 9 stocks with a dividend yield higher than the historical high dividend yield,
• I had 45 stocks with a dividend yield higher than the historical average dividend yield and
• 39 stocks with a dividend yield higher than the 5 year average dividend yield.

If you had one share of each stock, total dividends last month would be $146.06. This month dividends would be $147.68. Of the stock that I follow 3 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below. None of my stocks have dividend increases.

Andrew Peller Ltd (TSX-ADW.A, OTC-ADWPF)
Empire Company Ltd (TSX-EMP.A, OTC-EMLAF)
Medtronic PCL (NYSE-MDT)

Of the stocks that I follow 1 company has decreased their dividends. I have denoted these dividends in red. The stocks are shown below.

Progressive Waste Solutions (NYSE-BIN)*

*The stock of Progressive Waste Solutions (NYSE-BIN) has amalgamated with Waste Connections. Because the old shareholders of Progressive Waste Solutions only get .4815 of a share of the new company, their dividend actually fall from 1.09% dividend yield of last month to a 0.54% dividend yield in this month.

Of the stocks that I follow 1 company has suspended their dividends. I have denoted this dividend in red.

Canyon Services Group (TSX-FRC, OTC-CYSVF)

Also, the stock HNZ Group Inc. TSX-HNZ, OTC-CDHPF) has changed it ticker symbol as of May 19, 2016. The common and variable voting shares currently trading under the symbols of HNZ.A and HNZ.B will trade under the ticker HNZ. The shares previously were for common HNZ.A and non-Canadian variable HNZ.B.

Most of my stocks started out as Dividend Payers. Currently 14 stocks are not paying any dividends and this would be some 9.5% of the stocks that I follow. Three of these stocks never had dividends, so 7.4% 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 Suncor Energy Inc. (TSX-SU, NYSE-SU)... learn more . The next stock I will write about will be Empire Company Ltd (TSX-EMP.A, OTC- EMLAF)... learn more on Wednesday, July 6 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.