Dividend Safety

Dylan Callaghan on Stock Trades, Canada talks about dividend safety. He covers a lot of good points and is well worth the read for people who invest in dividend stocks. It illustrates his points with Enbridge.

I personally check dividend payments in a number of ways. I look at Dividend Payout Ratios (DPR) for Earnings per Share (EPS), Cash Flow per Share (CFPS) and Free Cash Flow. I look at DPRs for the last financial year, for 5 year coverage and possible future. Personally, my favourite is generally the CFPS adjusted for WC.

I do DPR for EPS for the last financial year and also for the past 5 years. You cannot judge a dividend payment ratio against one year as EPS sometimes can be unrepresentative of what the company is really making with checking only one year. EPS might be too high or too low in one year to be representative of the earnings of a company. I also look at the DPR for what analysts suggest is both the future dividends and EPS.

When I DPR for CFPS, I am looking at the Cash Flow from Operations and Cash Flow from Operations adjusted for Working Capital (WC). I do calculate the Working Capital, but I also look at what TD WebBroker says is the WC. For all but financial stocks, this calculation gives you a good idea on if dividends being paid are reasonable. I also look at the 5 year coverage ratios.

I do the DPR for FCF. I do calculate the FCF, and I look at what Morningstar, WebBroker reports and Wall Street Journal (WSJ) says. The problem with FCF is that a lot of the time, the different sources do not agree on what the FCF is. I look at DPR for FCF for the last financial year and for 5 year coverage. I also look at what analysts think the FCF will be in the future in comparison with future dividends.

On my other blog I wrote yesterday about Titanium Transportation Group Inc (TSX-TRR, OTC-PVVTF) ... learn more. Next, I will write about Keyera Corp (TSX-KEY, OTC-KEYUF) ... learn more on Friday, October 29, 2021 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.

TECSYS Inc

Geordie Carragher on CanTech Letter talks about this stock that I own and have done well on. (If you get a message to sign up, just click in the box that you have already sign-up (and ignore for x number of days) and you will get the article.)

I have had this stock for a little over 10 years. I have made a total return of 38.65% per year with 36.66% from capital gains and 1.98% from dividends. The dividend yield is currently low (below 2%) at just $0.48%. All the dividend yields are low with 5, 10 and historical median dividend yields at 1.28%, 1.32% and 1.49%.

On my other blog I wrote yesterday about Dollarama Inc (TSX-DOL, OTC-DLMAF) ... learn more. Next, I will write about Titanium Transportation Group Inc (TSX-TRR, OTC-PVVTF) ... learn more on Wednesday, October 27, 2021 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.

Renting or Buying

I found this Money Sense article interesting. I must admit I have always rented and invested. I earn dividends as my income currently. I am happy with the choice I made.

I must admit that I felt a lot of pressure to buy a place from family and friends, most of whom bought places to live in. I did own a cottage for a while, while my son was young. I remember that there was always something that need repair each year. I also sold the cottage for more than I paid for it and the upgrades I had done. I had paid cash for it using my deceased husband’s insurance money, so there was no mortgage involved.

I was lucky I had a local contractor who would come in during the winter months and fix what need to be fixed. Also, I realized after being in the cottage for the first summer that the electric system was not set up well and called in a local electrician to inspect it. He fixed the problems and I was lucky it was not that expensive.

On my other blog I wrote yesterday about CCL Industries Inc (TSX-CCL.B, OTC-CCDBF) ... learn more. Next, I will write about Ovintiv Inc (TSX-OVV, NYSE-OVV) ... learn more on Friday, October 22, 2021 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.

RioCan REIT

Dan Kent on StockTrades about RIOCAN REIT being a possible turnaround.

I have bought shares in this REIT several times between 1998 and 2014. My total return is 10.32% per year, with 1.07% per year from capital gains and 9.25% per year from distributions. I bought this stock for the distributions. When I stopped working in 1999, my yield on my portfolio was around 2% and I wanted to raise it to between 3% and 3.5%.

On my other blog I wrote yesterday about Brookfield Asset Management Inc (TSX-BAM.A, NYSE-BAM) ... learn more. Next, I will write about CCL Industries Inc (TSX-CCL.B, OTC-CCDBF) ... learn more on Wednesday, October 20, 2021 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.

Canadian REITs

Here are 3 REITs recently featured in the Investor’s Digest of Canada as reprinted by Advice for Investors. The REITs covered are:

Cominar REIT (TSX-CUF.UN)
BSR REIT (TSX-HOM.U)
SmartCentres REIT (TSX-SRU-UN)

I have 4 Real Estate stocks of Choice Properties, RioCan, Melcor Development, and Smart Centers. I have had Choice for just over 3 years and have made a total return of 11.21% per year. I have had RioCan since 1998 and have made a total return of 10.46%. I have had Melcor Development since 2008 and I have made 6.81% per year. I just bought Smart Centers this year and I have made a total return of 44.53%. I got this last stock quite cheap.

On my other blog I wrote yesterday about Pason Systems Inc (TSX-PSI, OTC-PSYTF) ... learn more. Next, I will write about Molson Coors Canada (TSX-TPX.B, NYSE-TAP) ... learn more on Friday, October 15, 2021 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.

Go Big, Then Stop

Nick Maggiulli on Of Dollars and Data talks about how to save money. He explores the investment strategy that exploits the miracle of compounding.

I find this idea rather intriguing. It is great if you can get the miracle of compounding working for you rather than against you. I invested over a number of years but I was not very consistent in investing. I did get compounding working for me by buying dividend growth stocks. However, if I had been more consistent in investing, I probably would have been able to retire earlier than I did. However, I did stop working at a formal job at 54, so that was not bad.

On my other blog I wrote today about Equitable Group Inc (TSX-EQB, OTC-EQGPF) ... learn more. Next, I will write Pason Systems Inc (TSX-PSI, OTC-PSYTF) ... learn more on Wednesday, October 13, 2021 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.

Something to Buy October 2021

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 dividend yield test in this note is a quick way of finding possible stock buys. See my Spreadsheet .

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. However, this is just a place to start. It is a good idea to check the stock price with other tests, especially the P/S Ratio test. For other testing, like P/E Ratios, P/S Ratios, P/CF Ratios, P/BV Ratios and Price/Graham Price Ratios, you use estimates or data from the last reported financial quarter.

If a stock is showing as a buy using the dividend yield test, I usually like to verify it is a buy by doing a P/S Ratio test. Here you compare the current P/S Ratio to the 10 year median P/S Ratio. If the current P/S Ratio is lower than the 10 year median, then the stock is a buy. I note that Morningstar gives a current P/S Ratio. The 10 year median ratio is shown in my review of a stock. The 10 year median ratio in a review is good for one year from the date of review.

This historical dividend yield test does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So, I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If it is not a valid test, I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 10 year median dividend yield.

However, no system is perfect. But if you are interested in buying 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 October 2021 Spreadsheet above 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 22 stocks in the Consumer Discretionary category. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Six (23%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), Goodfellow Inc (TSX-GDL, OTC-GFELF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP) and Stingray Digital Group Inc (TSX-RAY.A). There is no change from last month.

I follow 10 Consumer Staples stocks. No stocks are showing as cheap by the historically high dividend yield. There is no change from last month.

Six stocks (60%) are showing cheap by historical median dividend yield. These are Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Lassonde Industries (TSX-LAS.A, OTC-LSDAF), Loblaw Companies (TSX-L, OTC-LBLCF), Metro Inc (TSX-MRU, OTC-MTRAF), and Saputo Inc. (TSX-SAP, OTC-SAPIF). There is no change from last month.

I follow Five Health Care stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Four stocks (80%) are cheap by the historical median dividend yield. The stocks are HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF), Johnson and Johnson (NYSE-JNJ), Medtronic Inc. (NYSE-MDT), and Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF). HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF) and Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) have been added to this list.

I follow 9 Energy stocks. No stock (0%) is showing as cheap by the historical high dividend yield. There is no change from last month.

There are three stocks (33%) showing as cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), and Suncor Energy (TSX-SU, NYSE-SU). Ovintiv Inc (TSX-OVV, OTC-OVV) has been removed from this list.

I follow 26 Financial stocks under the categories of Banks, Financial Services, and Insurance.

I follow 8 Bank stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Two stocks (25%) are showing as cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), and Toronto Dominion Bank (TSX-TD, NYSE-TD). There is no change from last month.

I follow 13 Financial Service stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Four stocks (31%) are showing as cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B, OTC-AGFMF), Alaris Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF), IGM Financial (TSX-IGM, OTC-IGIFF), and Power Corp (TSX-POW, OTC-PWCDF). Alaris Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF) has been added to this list.

I follow 5 Insurance stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Three stocks (60%) are showing as cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), IA Financial Corp (TSX-IAG, OTC-IDLLF), and Manulife Financial Corp (TSX-MFC, NYSE-MFC). There is no change from last month.

I follow 32 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.

I have 7 Construction stocks. No stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Two stock (29%) are showing as cheap by historical median dividend yield. They are Aecon Group Inc (TSX-ARE, OTC-AEGXF), and Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF). There is no change from last month.

I have 3 stocks I have left with the sub-index of Industrial. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

One stock (33%) is showing as cheap by historical median dividend yield. It is Finning International Inc. (TSX-FTT, OTC-FINGF). There is no change from last month.

I have 7 Manufacturing stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Two stocks (29%) are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF) and Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF). Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF) has been added back to this list.

I follow 15 Services stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Two stock (13%) is showing as cheap by historical median dividend yield. They are Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) and Canadian National Railway (TSX-CNR, NYSE-CNI). Canadian National Railway (TSX-CNR, NYSE-CNI) has been added to this list.

I follow 10 Material stocks. One stock (10%) is showing as cheap by the historically high dividend yield. It is Kirkland Lake Gold (TSX-KL, NYSE-KL). There is no change from last month.

Three stock (30%) are showing as cheap by historical median dividend yield. The stocks are Barrick Gold Corp (TSX-ABX, NYSE-ABX), Kirkland Lake Gold (TSX-KL, NYSE-KL), and Stella-Jones (TSX-SJ, OTC-STLJF). Chemtrade Logistics Inc. Fund (TSX-CHE.UN, OTC-CGIFF) has been removed from this list.

I follow 10 Real Estate stocks. No stocks (0%) are showing as cheap by historically high dividend yield. There is no change from last month.

Two stocks (20%) are showing as cheap by historical median dividend yield. They are Melcor Developments Inc. (TSX-MRD, OTC-MODVF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). There is no change from last month.

I follow 3 of the Telecom Service stocks. None of the stocks (0%) are showing as cheap by historically high dividend yield. There is no change from last month.

Three stocks (100%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Shaw Communications Inc (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change from last month.

I follow 10 Tech stocks. No stocks (0%) are showing as cheap by historical high dividend yield. There is no change from last month.

Three stock (33%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). There is no change from last month.

I follow 8 of the Infrastructure Type utility companies. None of the stocks (0%) are showing as cheap by historical high dividend yield. There is no change from last month.

Three stocks (38%) are showing cheap by historical median dividend yield. They are Enbridge Inc. (TSX-ENB, NYSE-ENB), Keyera Corp (TSX-KEY, OTC-KEYUF), and TC Energy Corp (TSX-TRP, NYSE-TRP). There is no change from last month.

I follow 9 of the Power Type utility companies. One stock (10%) is showing as cheap by historical high dividend yield. It is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no change from last month.

Two stocks (20%) are showing as cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). There is no change from last month.

On my other blog I wrote yesterday about North West Company (TSX-NWC, OTC-NWTUF) ... learn more. Next, I will write about Medtronic PLC (NYSE-MDT) ... learn more on Friday, October 08, 2021 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.