Tuesday, December 8, 2020

Dividend Investing

I have been reading lately a lot about how Canadians who picked Canadian Dividend stock because of the dividend yields are having trouble and they are losing money. I do not pick Canadian Dividend stock based solely on their dividend rate.

There is a trade of between dividend yields and dividend increases. Therefore, I chose dividend stocks that have a low (below 2%), moderate (2% to 4%) or good (5% and 6%) dividend yield with most of the stock falling into the moderate rate. I only go for good rates for REITs, otherwise I stay away from stocks with dividend yields in this category, when the dividend yields are normally in this category.

Dividend growth rates are low (below 8%), moderate (8% to 14% range) and good (15% and higher). I especially like stocks with moderate yields and moderate dividend growth rates. This is the category that most Canadian banks fit.

However, I also have dividend yields stocks in the low category if they have a decent history of dividend increases. I do not buy these stocks when they dividend yield is below 1%. Even if the stock has generally its yield below 1%, I wait to buy when it is at 1% or higher.

For the portfolio, where I live off of the dividends, I try to keep the dividend yield overall around 3.5% and the growth rate around 8% to 10%. However, dividend growth rates can vary a lot depending on how well the stock market is doing. Dividend growth rates tend to be good in a bull market and lower when in a bear market. They are good in an economic expansion and lower in an economic recession.

On my other blog I wrote yesterday about Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more. Next, I will write about Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF) ... learn more on Wednesday, December 9, 2020 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.

1 comment:

  1. Thanks for the detail on your decision matrix. You definitely have a clear categorization and tool for making investment decisions that meet your financial goals.