Canadian Money Forum banner

1 - 13 of 13 Posts

·
Banned
Joined
·
3 Posts
Discussion Starter #1
Hi guys,
I want to create a dividend stock portfolio with a preference for Canadian stocks. I'm starting from scratch and have 100K to invest.

I'm struggling to figure out the right stocks and the right entry points. Have you guys come across any successful portfolios that I can follow and watch for buys and sells. I have been following http://www.dividendgrowthinvestor.com but this is predominantly US.

Looking for your guidance on:
1) links to any portfolios I can watch
2) suggestions on good canadian dividend stocks you would jump in today

Thanks.
 

·
Registered
Joined
·
128 Posts
Most of the good dividend paying stocks are a bit overpriced at the moment, IMO.
The usual suspects are the telecoms and banks but I would wait for a pullback on those.
The ones that are good value at this moment are:
Husky energy HSE
TMX group X
Imperial oil IMO
Transalta TA
Manitoba telecom MBT, only because they have a juicy .65 cent dividend,which
is coming up next week btw.
Your best bet is to buy a basket of stocks or even a dividend fund.
 

·
Registered
Joined
·
15,839 Posts
from my point of view the telcos are still decent value as dividend plays. Believe i saw a report yesterday of new insider buying in BCE.

certainly there was an early marker report of new insider buying in TD. Insiders have been hemorrhaging out of bank shares for 9 months now, so this early marker report might be a harbinger of a new cycle to come, if it is true (marker reports are subject to correction.)

in energy, i'd take crescent point with its 7% div yield over husky energy in the 5% dividend range any day. The gallant mid-sized canadian is also 100% local, transparent, and not subject to foreign sovereign interests. Furthermore, unlike husky, CPG does not suffer from downstream refinery problems.

i'm sitting on the fence over the TMX. I'd sold it in late 2009 w plan to rebuy, it's now nearly 3 dollars lower but still find myself on the sidelines.
 

·
Banned
Joined
·
419 Posts
Personally I will only look at stocks with a recent dividend increase. A dividend increase is a sign of health. ALthough I hold a few Cdn banks I would not purchase any more banks until I see an increase.
I also do not buy a stock that has a below 5 year average dividend yield.
Most of the stocks I track tend to fluctuate in a small range and *should fall back in price so that they are trading above its 5 year average yield.

I agree that many dividend stocks are more than fairly priced. This is because of the financial melt down and people have flocked to dividend stocks for safety. (another reason to buy them). Some day dividend stocks will not be "cool" anymore and will fall a bit in price.

Check out this link:

http://www.dividendgrowth.ca/dividendgrowth/

Tons of free info, and I think you can send a 10 dollar bill and still get a back issue to read.
 

·
Registered
Joined
·
15,839 Posts
hmmmn not trying to be ornery but enbridge div on the common is only in the 3% range (unless you mean the unit trust) (but that's not really a classic dividend, rather it's a distribution composed of a mixture of payouts, not adding up to the dividend tax credit punch that's packed into a true dividend.)

pipelines are appealing because of the long-term transmission contracts. What would be wrong with fort chicago, now yielding around 10%. Although it's still a unit trust, it has stated that it will maintain a $1.00 dividend, for a yield of just under 10%, after it converts to corporation later this year. Because those long-term contracts sending gas to the US midwest will go on and on and on ... longer than energizer batteries.

.
 

·
Banned
Joined
·
419 Posts
But let's not forget ENB tends to raise the dividend 8-10% per year.
After 20 years of 10% income growth, the "only" 3% range becomes significant. Add a synthetic drip to the mix, and I think anyone holding ENB for the long term would be quite happy.
 

·
Registered
Joined
·
15,839 Posts
i for one would not be happy with a div yield of 3% that made it up to 3.30% after 12 excruciating months; and then struggled on to a whopping payout of 3.63 in the 3rd year; and so on.
 

·
Registered
Joined
·
12,905 Posts
Humble, if the dividend consistently rises by 8-10% per year, the stock price would tend to as well. Stock prices are theoretically the present value of all future dividends, usually discounted at a high interest rate to account for risk.

Thus, you get 3% dividend + ~8-10% capital appreciation. Not a bad total return.
 

·
Banned
Joined
·
2,508 Posts
Try to buy it on sale.

When I search my dividend stocks, I look at the companies that have a dividend pay out ratio under 50-60% (This means they have a very good ability to pay the dividend). This can change with profits and losses, so check up on it every so often. Also look, at what else the company may be paying, such as bonds. Check the bond rating. Make sure it's investment grade and they are not defaulting on it. This is a liability that can affect dividends.


Look at some REIT's. Things that people shop frequently, such as grocery, drugstores, etc. I'll keep REIT's around 10-15% of my dividend portfolio.
 

·
Banned
Joined
·
419 Posts
Humble, if the dividend consistently rises by 8-10% per year, the stock price would tend to as well. Stock prices are theoretically the present value of all future dividends, usually discounted at a high interest rate to account for risk.

Thus, you get 3% dividend + ~8-10% capital appreciation. Not a bad total return.
Agreed. To me return = dividend + dividend growth.

Short term prices do what they want, but long term the price *generally goes up almost in lockstep with the dividend increase.

It has to. If the dividend grows for ten years and the price stays, the yield would be high, causing people to buy the stock.
 
1 - 13 of 13 Posts
Top