Sorry, but I meant to publish this on Thursday and must have gotten off track.
Last week I spoke about debt ratios. What I want to talk about today is company debt and possible implications on dividends. If you do dividend investing like I do, you should be aware of this.
Long term debt usually comes with a Covenant . Here I have referred you to the definition on Investopedia. Perhaps a clearer answer to what is a Debt Covenant is shown here at Simple Studies.
As an investor you should want to know if the companies you invest in have long term debt with covenants and what the covenant might say. If you are investing for dividends in companies that have long term debt you should be aware that debt ratios can affect dividend payments. If certain debt ratios exceed certain levels, a company could be forced to reduce or suspend dividends.
I have read in the past of this happening, but via google I did not get much in the way of examples. Lauren Thomas on CNBC in March 2017 says that Frontier Communications (Nasdaq- FTR) might cut or suspend dividend to address significant debt maturities in 2020-2022, even if it is not required to do so per its bonds' covenants. Precision Drilling Corporation in a Press Release with their fourth quarterly 2015 results says "The dividend suspension, while a result of a debt covenant restriction, further strengthens the balance sheet as we continue to maneuver through uncharted waters".
If you see long term debt jump a lot in one year, it is a good idea to check to see why and what the implications are for you company. The problem with debt ratios being not so good for a company is that they could get into problems, a vulnerability, when bad times come. We still go through economic cycles of expansion and recessions. In every recession there is always companies that cut or suspend dividends.
On my other blog I wrote on Wednesday about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more. Today, I will write about Intact Financial Corp (TSX-IFC, OTC-IFCZF)... learn more on Friday, June 30, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Friday, June 30, 2017
Tuesday, June 27, 2017
T-Bills and Stocks
Rupert Hargreaves writes an interesting article on Value Walk about how T-Bills over their lifetime can beat stocks. Overall the stock market beats T-Bills.
However, most of the return on the market is created by some 4% of the stocks. So if you do not pick the right stocks you may not be able to beat investing in T-Bills. In the US Hendrik Bessembinder says that 42% of the stocks outperformed T-Bills, but the rest produced negative returns.
Note also that companies disappear off of exchanges for other reasons that Bankruptcy. Companies change their names and symbols, they are bought out or taken private. This is not necessarily bad for investors. You get seemingly new companies with companies split up or spin off sections of their business.
I have done well overtime. I have been investing from the late 1970's. However, I tended to pick big companies that pay dividends. However, not all my investments have worked out and I have lost money on some. Overall I have made good money, especially from dividends.
On my other blog I wrote yesterday about Saputo Inc. (TSX-SAP, OTC-SAPIF)... learn more. Tomorrow, I will write about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Wednesday, June 28, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
However, most of the return on the market is created by some 4% of the stocks. So if you do not pick the right stocks you may not be able to beat investing in T-Bills. In the US Hendrik Bessembinder says that 42% of the stocks outperformed T-Bills, but the rest produced negative returns.
Note also that companies disappear off of exchanges for other reasons that Bankruptcy. Companies change their names and symbols, they are bought out or taken private. This is not necessarily bad for investors. You get seemingly new companies with companies split up or spin off sections of their business.
I have done well overtime. I have been investing from the late 1970's. However, I tended to pick big companies that pay dividends. However, not all my investments have worked out and I have lost money on some. Overall I have made good money, especially from dividends.
On my other blog I wrote yesterday about Saputo Inc. (TSX-SAP, OTC-SAPIF)... learn more. Tomorrow, I will write about AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF)... learn more on Wednesday, June 28, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Thursday, June 22, 2017
Debt Ratios
In order to judge is a stock has good debt ratios you have to have a feel for what is common for the sector the stock is in. In the chart below I am look at five different debt ratios. These are categorized by the sectors my stocks are in. There are not so much typical ratios for stocks, but typical ratios for stocks of the different sectors.
If you notice for Banks and Insurance under Financials, the Long Term Debt/Market Cap ratios are quite high. For this ratio, you generally want it at or less than 1.00, but Financials are quite different from other sectors in this regard.
For Liquidity Ratio, generally you want it to be 1.50 and above. Most, but not all sectors achieve this. In some sectors, the companies depend on cash flow to cover current liabilities. See the low ratios for Real Estate and Infrastructure Utilities. Note that most analysts do not consider this ratio at all for Financials.
For Debt Ratios (Assets over Liabilities) you again want the ratios to be 1.50 and above. However, banks are different. For banks the standard used to 1.04 and above. Most banks have now moved higher than 1.04. Insurance companies are similar to banks for this ratio.
Generally for Leverage or Assets/Book Value you look for a ratio that is under 2.00. However, the median for different sectors can be higher. Banks and Insurance companies have very high Leverage Ratios. Utilities can also have relatively high Leverage Ratios. For example, the median Leverage Ratio for my Power Utilities is 3.03.
The Debt/Equity Ratio is similar to the Leverage Ratio, but is lower. Generally here you want a ratio less than 1.00. However, it is generally higher in some sectors like Utilities. The financial also have very high Leverage and Debt/Equity Ratios.
Below is my chart on the median ratios for the different sectors. The column titles are: LTD = Long Term Debt, Debt/Market Cap Ratio; Liq = Liquidity or Current Assets / Current Liabilities; A/DB= Asset/Liability Ratio; Lev = Leverage Asset/Book Value; Dt/Eq = Debt/Equity Ratio. This can help you decide if a stock is out of line with the ratios of its sector.
*C =Index code or type of stock. C=Consumer, E-Real Estate, F=Financial, I=Industrial, M=Materials, R=Resources, T=Tech and U-Utilities.
On my other blog I wrote yesterday about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more. Tomorrow, I will write about Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more on Friday, June 23, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
If you notice for Banks and Insurance under Financials, the Long Term Debt/Market Cap ratios are quite high. For this ratio, you generally want it at or less than 1.00, but Financials are quite different from other sectors in this regard.
For Liquidity Ratio, generally you want it to be 1.50 and above. Most, but not all sectors achieve this. In some sectors, the companies depend on cash flow to cover current liabilities. See the low ratios for Real Estate and Infrastructure Utilities. Note that most analysts do not consider this ratio at all for Financials.
For Debt Ratios (Assets over Liabilities) you again want the ratios to be 1.50 and above. However, banks are different. For banks the standard used to 1.04 and above. Most banks have now moved higher than 1.04. Insurance companies are similar to banks for this ratio.
Generally for Leverage or Assets/Book Value you look for a ratio that is under 2.00. However, the median for different sectors can be higher. Banks and Insurance companies have very high Leverage Ratios. Utilities can also have relatively high Leverage Ratios. For example, the median Leverage Ratio for my Power Utilities is 3.03.
The Debt/Equity Ratio is similar to the Leverage Ratio, but is lower. Generally here you want a ratio less than 1.00. However, it is generally higher in some sectors like Utilities. The financial also have very high Leverage and Debt/Equity Ratios.
Below is my chart on the median ratios for the different sectors. The column titles are: LTD = Long Term Debt, Debt/Market Cap Ratio; Liq = Liquidity or Current Assets / Current Liabilities; A/DB= Asset/Liability Ratio; Lev = Leverage Asset/Book Value; Dt/Eq = Debt/Equity Ratio. This can help you decide if a stock is out of line with the ratios of its sector.
| Sub-Index | C | LTD | Liq | A/DB | Lev | Dt/Eq |
|---|---|---|---|---|---|---|
| Cons Discretionary | C | 0.23 | 1.91 | 1.86 | 2.10 | 1.10 |
| Cons Staple | C | 0.11 | 1.54 | 1.87 | 2.21 | 1.21 |
| Health Care | C | 2.73 | 2.12 | 1.90 | 0.90 | |
| Real Estate | E | 0.65 | 0.85 | 2.03 | 1.98 | 0.98 |
| Bank | F | 8.23 | 2.20 | 1.07 | 16.37 | 15.37 |
| Financial Services | F | 0.44 | 1.52 | 1.66 | 2.51 | 1.51 |
| Insurance | F | 6.51 | 1.65 | 1.08 | 12.99 | 11.99 |
| Construction | I | 0.15 | 1.39 | 2.09 | 1.96 | 0.96 |
| Industrial | I | 0.19 | 2.78 | 1.79 | 2.49 | 1.49 |
| Manufacturing | I | 0.21 | 2.02 | 2.30 | 1.66 | 0.66 |
| Services | I | 0.23 | 1.43 | 2.02 | 1.93 | 0.93 |
| Materials | M | 0.22 | 1.80 | 1.81 | 2.41 | 1.34 |
| Energy | R | 0.35 | 1.28 | 2.03 | 1.97 | 0.97 |
| Tech | T | 0.00 | 2.24 | 2.58 | 1.53 | 0.53 |
| Infrastructure | U | 0.29 | 0.87 | 1.69 | 2.54 | 1.14 |
| Power | U | 1.08 | 1.24 | 1.42 | 3.03 | 2.13 |
| Telecom Services | U | 0.37 | 0.52 | 1.63 | 2.62 | 1.62 |
*C =Index code or type of stock. C=Consumer, E-Real Estate, F=Financial, I=Industrial, M=Materials, R=Resources, T=Tech and U-Utilities.
On my other blog I wrote yesterday about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more. Tomorrow, I will write about Parkland Fuel Corp. (TSX-PKI, OTC-PKIUF)... learn more on Friday, June 23, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Tuesday, June 20, 2017
More is Not Better
More is not necessarily better, sometimes more is just more. People like my gravy. My secret is I put a pinch of mace in it. However, would you think that people would still like it if I put in more mace or lots of mace?
What people do not realize is that before capitalism, we did not have a sizeable middle class. In fact having a middle class is relatively new in history. For most of history there were just the few elites and everyone else.
Having some rules for a capitalistic market makes the market work better. Such things as the rule of law and standard weights and measures were very good for capitalistic markets. Actually these sorts of things are good for all sorts of market systems.
Look at the US. As it expanded government (and taxes) and brought in rules for business (starting in the 1930's) the middle class expanded. So the elected officials brought in more government and more rules were brought in. Sometime in the late 1970's the middle started to get smaller and the wealthy to get wealthier. See chart 2 in this article by John Mauldin at The Market Oracle.
I sometimes wonder if we really any longer have a capitalistic market system. We have governments that profess to want to protect people at all time from all things. Frankly I do not think that is possible. Companies are so heavily regulated that they need to have compliance officers.
This, by the way, works for the big companies that can afford to do this, but works against small companies that cannot. I read that in the US in 2016 was the first year when there were more company's going bankrupt that new companies.
We have very socialistic governments. We are piling on more and more rules trying to make people behave in certain ways and make the economy behave in certain ways. This does not seem to be working.
Somehow we trust our government bureaucrats implicitly, but we have no faith individuals, especially individuals that run companies. We think that they are all greedy, but bureaucrats are pure? (It would seem to be uncaring bureaucrats that lead to the fire in London. See the Associated Press article on CBC News. I bet no bureaucrat would face any consequences but if it was a private company, people would go to jail.)
Do not get me wrong about rules. Capitalism works best under rules. It is just at the present time our economy seems to be suffering because we have far too many rules. We are drowning in rules. Our taxes are so complex that most people cannot do their own taxes. This is stupid.
Maybe rules should get more basic and go more towards "if you sell something that makes people sick, you will be prosecuted and could end up with a fine or jail or both" rather than our current more minutiae rules where small companies need a compliance officer to ensure all rules are followed.
On my other blog I wrote yesterday about CI Financial Corp (TSX-CIX, OTC- CIFAF)... learn more. Tomorrow, I will write about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more on Wednesday, June 21, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
What people do not realize is that before capitalism, we did not have a sizeable middle class. In fact having a middle class is relatively new in history. For most of history there were just the few elites and everyone else.
Having some rules for a capitalistic market makes the market work better. Such things as the rule of law and standard weights and measures were very good for capitalistic markets. Actually these sorts of things are good for all sorts of market systems.
Look at the US. As it expanded government (and taxes) and brought in rules for business (starting in the 1930's) the middle class expanded. So the elected officials brought in more government and more rules were brought in. Sometime in the late 1970's the middle started to get smaller and the wealthy to get wealthier. See chart 2 in this article by John Mauldin at The Market Oracle.
I sometimes wonder if we really any longer have a capitalistic market system. We have governments that profess to want to protect people at all time from all things. Frankly I do not think that is possible. Companies are so heavily regulated that they need to have compliance officers.
This, by the way, works for the big companies that can afford to do this, but works against small companies that cannot. I read that in the US in 2016 was the first year when there were more company's going bankrupt that new companies.
We have very socialistic governments. We are piling on more and more rules trying to make people behave in certain ways and make the economy behave in certain ways. This does not seem to be working.
Somehow we trust our government bureaucrats implicitly, but we have no faith individuals, especially individuals that run companies. We think that they are all greedy, but bureaucrats are pure? (It would seem to be uncaring bureaucrats that lead to the fire in London. See the Associated Press article on CBC News. I bet no bureaucrat would face any consequences but if it was a private company, people would go to jail.)
Do not get me wrong about rules. Capitalism works best under rules. It is just at the present time our economy seems to be suffering because we have far too many rules. We are drowning in rules. Our taxes are so complex that most people cannot do their own taxes. This is stupid.
Maybe rules should get more basic and go more towards "if you sell something that makes people sick, you will be prosecuted and could end up with a fine or jail or both" rather than our current more minutiae rules where small companies need a compliance officer to ensure all rules are followed.
On my other blog I wrote yesterday about CI Financial Corp (TSX-CIX, OTC- CIFAF)... learn more. Tomorrow, I will write about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more on Wednesday, June 21, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Thursday, June 15, 2017
Investing Easy
Investing does not have to be difficult. I know that some ad try to say that doing it on your own is difficult and hard, but it does not have to be. Look around you and what do you see. There are big companies that you could invest in with little difficulty. Basically invest in big companies that pay dividends.
Invest in some of the big banks like Royal Bank or TD Bank. Invest in some of the big retailers like Canadian Tire that seem to be doing well. However, say away from department stores that do not seem to be doing well. The utilities of Enbridge Inc. and Emera Inc. are in the news. One is a pipeline and one produces power.
Look at lists of under the various sectors put out by the TSX. If you cannot get into the index from above link go to the TSX Main Link. Go with companies where you recognize by name. The TSX also has a Dividend Aristocrat Index. (You will have to scroll down their list of indexes to get to this one.) Again go with a company you recognize.
Probably the best investment new letter is The Investment Reporter which you can find here. You can often get an initial deal on this investment letter. They will also send you a free newsletter which might also help you. Also, stay away from any investment letter that promises too much. I mean the ones that promise high returns quickly or high dividend yields. Only the people who sell these investment letters get rich, you will not.
Investing in stocks is not a get rich quick investment. If you want to get rich investing it is takes a while. You need to get compounding working for you. Buy stocks when you can and reinvest your dividends. You can bit by bit build up a portfolio that is producing money for you.
The other important point is that you do not panic, especially when we hit a bear market. There are going to be bear markets. It is more important to track dividends paid rather than the stock price. For most stocks, they will continue to pay dividends and some even increase them in bear markets. So focus on dividends not stock price.
On my other blog I wrote yesterday about Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more. Tomorrow, I will write about Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN)... learn more on Friday, June 16, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Invest in some of the big banks like Royal Bank or TD Bank. Invest in some of the big retailers like Canadian Tire that seem to be doing well. However, say away from department stores that do not seem to be doing well. The utilities of Enbridge Inc. and Emera Inc. are in the news. One is a pipeline and one produces power.
Look at lists of under the various sectors put out by the TSX. If you cannot get into the index from above link go to the TSX Main Link. Go with companies where you recognize by name. The TSX also has a Dividend Aristocrat Index. (You will have to scroll down their list of indexes to get to this one.) Again go with a company you recognize.
Probably the best investment new letter is The Investment Reporter which you can find here. You can often get an initial deal on this investment letter. They will also send you a free newsletter which might also help you. Also, stay away from any investment letter that promises too much. I mean the ones that promise high returns quickly or high dividend yields. Only the people who sell these investment letters get rich, you will not.
Investing in stocks is not a get rich quick investment. If you want to get rich investing it is takes a while. You need to get compounding working for you. Buy stocks when you can and reinvest your dividends. You can bit by bit build up a portfolio that is producing money for you.
The other important point is that you do not panic, especially when we hit a bear market. There are going to be bear markets. It is more important to track dividends paid rather than the stock price. For most stocks, they will continue to pay dividends and some even increase them in bear markets. So focus on dividends not stock price.
On my other blog I wrote yesterday about Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more. Tomorrow, I will write about Algonquin Power & Utilities Corp (TSX-AQN, NTSE-AQN)... learn more on Friday, June 16, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Tuesday, June 13, 2017
Success Long Term
There is a very interesting story about how one guy Russ Gremel paid $1,000 for shares in Walgreen 70 years ago. The shares are now worth $2.1M. See the story on blogger Dividend Growth Investor.
This is all very interesting, but this is not the way I would recommend to invest. He had no diversification at all. The problem is that even the best of companies can get into problems. The fact is that once solid good companies can go bankrupt.
On the other hand this certainly shows the power of compounding.
On my other blog I wrote yesterday about Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more. Tomorrow, I will write about Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more on Wednesday, June 14, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
This is all very interesting, but this is not the way I would recommend to invest. He had no diversification at all. The problem is that even the best of companies can get into problems. The fact is that once solid good companies can go bankrupt.
On the other hand this certainly shows the power of compounding.
On my other blog I wrote yesterday about Liquor Stores N. A. Ltd. (TSX-LIQ, OTC-LQSIF)... learn more. Tomorrow, I will write about Power Corp of Canada (TSX-POW, OTC-PWCDF)... learn more on Wednesday, June 14, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Tuesday, June 6, 2017
Dividend Stocks June 2017
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 2017.
Bank of Montreal (TSX-BMO, NYSE-BMO)
Canadian Real Estate (TSX-REF.UN, OTC-CRXIF)
CI Financial (TSX-CIX, OTC-CIFAF)
Enbridge Inc. (TSX-ENB, NYSE-ENB)
Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF)
Keyera Corp (TSX-KEY, OTC-KEYUF)
Lassonde Industries (TSX-LAS.A, OTC-LSDAF)
Loblaw Companies (TSX-L, OTC-LBLCF)
National Bank of Canada (TSX-NA, OTC-NTIOF)
Onex Corp (TSX-ONEX, OTC-ONEXF)
Telus Corp. (TSX-T, NYSE-TU)
TMX Group Ltd. (TSX-X, OTC-TMXXF)
Sun Life Financial (TSX-SLF, NYSE-SLF)
Of the stocks that I follow no company has decreased their dividends. Of the stocks that I follow no company has suspended their dividends.
The name and symbol change of Wi-Lan (TSX-WIN, NASDAQ-WILN) has been changed to Quarterhaill Inc (TSX-QTRH, NASDAQ-QTRH).
Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 9.74% of the stocks that I follow. Three of these stocks never had dividends, so 7.79% 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. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.
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 wrote today about Waste Connections Inc. (TSX-WCN, NYSE-WCN)... learn more. Tomorrow, I will write about IGM Financial Inc. (TSX-IGM, OTC-IGIFF)... learn more on Wednesday, June 7, 2017 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 website for stocks followed and investment notes. 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 or StockTwits. I am on Instagram with #walktoronto.
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 2017.
- I have 2 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 64 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.
- I have 2 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 60 stocks with a dividend yield higher than the historical median dividend yield and
- 55 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.
Bank of Montreal (TSX-BMO, NYSE-BMO)
Canadian Real Estate (TSX-REF.UN, OTC-CRXIF)
CI Financial (TSX-CIX, OTC-CIFAF)
Enbridge Inc. (TSX-ENB, NYSE-ENB)
Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF)
Keyera Corp (TSX-KEY, OTC-KEYUF)
Lassonde Industries (TSX-LAS.A, OTC-LSDAF)
Loblaw Companies (TSX-L, OTC-LBLCF)
National Bank of Canada (TSX-NA, OTC-NTIOF)
Onex Corp (TSX-ONEX, OTC-ONEXF)
Telus Corp. (TSX-T, NYSE-TU)
TMX Group Ltd. (TSX-X, OTC-TMXXF)
Sun Life Financial (TSX-SLF, NYSE-SLF)
Of the stocks that I follow no company has decreased their dividends. Of the stocks that I follow no company has suspended their dividends.
The name and symbol change of Wi-Lan (TSX-WIN, NASDAQ-WILN) has been changed to Quarterhaill Inc (TSX-QTRH, NASDAQ-QTRH).
Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 9.74% of the stocks that I follow. Three of these stocks never had dividends, so 7.79% 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. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.
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 wrote today about Waste Connections Inc. (TSX-WCN, NYSE-WCN)... learn more. Tomorrow, I will write about IGM Financial Inc. (TSX-IGM, OTC-IGIFF)... learn more on Wednesday, June 7, 2017 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 website for stocks followed and investment notes. 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 or StockTwits. I am on Instagram with #walktoronto.
Thursday, June 1, 2017
Dividend Investing
You can have a nice income from stock dividends. However, you have to be prepared for the volatility of the underlying stock. The value of your stock portfolio will to up and down all the time. Sometimes the fall in the market can be a heart stopping 30 to 50%. However, if you have large dividend paying stocks, you generally do not need to worry about this.
What you need to worry about is if your stock cuts their dividends. Then you have to decide if the stock is worth holding or if it is time to sell it and more on. Another thing to worry about is if you stock goes down a lot, but the general market has not. Find out why and decide if the stock is still worth holding or if it is time to sell and more on.
Do not worry about the volatility of the market. If you stock is going up and down with the market or with the sector it is in that is not the time to worry. You only need to seriously review your stock if it is out of line with its sector.
On my other blog I wrote yesterday about Husky Energy Inc. (TSX-HSE, OTC- HUSKF)... learn more. Tomorrow, I will write about Goeasy Ltd (TSX-GSY, OTC-EHMEF)... learn more on Friday, June 2, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
What you need to worry about is if your stock cuts their dividends. Then you have to decide if the stock is worth holding or if it is time to sell it and more on. Another thing to worry about is if you stock goes down a lot, but the general market has not. Find out why and decide if the stock is still worth holding or if it is time to sell and more on.
Do not worry about the volatility of the market. If you stock is going up and down with the market or with the sector it is in that is not the time to worry. You only need to seriously review your stock if it is out of line with its sector.
On my other blog I wrote yesterday about Husky Energy Inc. (TSX-HSE, OTC- HUSKF)... learn more. Tomorrow, I will write about Goeasy Ltd (TSX-GSY, OTC-EHMEF)... learn more on Friday, June 2, 2017 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 am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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