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Hello all and thank you for your help!
I have $2000 left to contribute to my TFSA this year and would like to try investing on my own (the other $8000 is with PH&N in balanced and equity funds and questtrade ishare etfs). I am very interested in buying dividend stocks, but don't know anything about evaluating stocks value. Also, is it wise to buy dividend stocks in my TFSA or are they better seperate or in my RRSP?
I am thinking about buying BMO stocks this time. The globe and mail suggested it is a good investment right now. Any thoughts on this or does anyone have any better ideas?
Thanks!
 

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Hello all and thank you for your help!
I have $2000 left to contribute to my TFSA this year and would like to try investing on my own (the other $8000 is with PH&N in balanced and equity funds and questtrade ishare etfs). I am very interested in buying dividend stocks, but don't know anything about evaluating stocks value. Also, is it wise to buy dividend stocks in my TFSA or are they better seperate or in my RRSP?
I am thinking about buying BMO stocks this time. The globe and mail suggested it is a good investment right now. Any thoughts on this or does anyone have any better ideas?
Thanks!
I think you're pretty safe buying stock in any of the major 6 Canadian banks (BMO, CIBC, TD, RBC, BNS and National). I personally own TD in my portfolio. If I were to buy today, I would be buying CIBC, as they have a low PE ratio (12.2) and a high dividend yield (4.55%). Their dividend payments represent 56% of net income, therefore they have sufficient capability to pay (and potentially grow) their dividend.
 

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I would not start by buying dividend stocks on their own until you are comfortable in evaluating them. The best place to start is in a dividend ETF like an XDV or something like that to get you started.
 

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Ethan says you are pretty safe buying the 6 Canadian banks. While I think Canadian banks should do fine, saying things so confidently makes me wonder if they are ready to drop. There is still a ton of risk out there oozing out from all over the world so nothing is safe.
 

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I don't think $2,000 is enough to buy the dividend stock directly. 100 shares of BMO will set you back about $6,000. Start with an ETF then once you have maybe $20,000 buy 2-3 solid div payers. Banks, BCE, and other telco's, and pipelines and utilities are basically the best choice in Canada. May want some oil and gas but yields are generally low. Canadian companies are treated better for tax. Don't just go for yield as this usually reflects lower growth prospects or a risk of div cut. Right now yields in the 3-5% range are probably the sweet spot.
 

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Nothing wrong with buying bank stocks, they're hoarding cash right now and some are due for a divided increase next year. However it comes down to what price you can get it at. Right now I think they are too expensive. There was some recent opportunity with CM and RY but they have shot up with 2nd q results and market rally.
 

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It should be pointed out that if you are buying dividend stocks inside a TFSA,
you will not be able to take advantage of the favourable tax treatment of dividends.
Dividend payers (canadian), should be held in taxable accounts where possible.....interest and other income should be in tax deferred accounts,,,TFSA, RRSP, RRIF etc.

That being said with $ 2K to invest perhaps you would be better, as others have said here with a dividend ETF.....or perhaps buy Interpipe....IPL.UN

You might also think about getting that other $8K out of the funds you bought, and buy ETF's yourself and save the fees...although PH&N are known to be pretty good and with reasonable,( but still higher than etf's) fees.

Good luck
 

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I'm still a newb at this. Trying to learn before I commit.

We won't be investing in oil or gas extraction. Hard to not do when you are wanting to chose the dividend strategy as a Canadian. Our portfolio will be "green" with only 1 oil/gas holding (TRP) which is a pipeline, not an extractor.

I wish I could find a great tool that would help me evaluate companies for my particular strategy. Free is preferred!
 

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We won't be investing in oil or gas extraction. Hard to not do when you are wanting to chose the dividend strategy as a Canadian. Our portfolio will be "green" with only 1 oil/gas holding (TRP) which is a pipeline, not an extractor.

I wish I could find a great tool that would help me evaluate companies for my particular strategy. Free is preferred!
There are ETFs and mutual funds for this type of thing.
Look at their list of holdings and then research those independently.
Or just buy the ETF

http://seekingalpha.com/article/36094-the-green-investor-choosing-an-alternative-energy-etf
 

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My point was more that I wish I had a stock evaluation tool that I could rely on as part of my analysis.
There are many stock evaluation tools - what specifically are you looking for?
Once you have the names of the companies it is not hard to find information for evaluating them.
Their website, the financial reports, SEDAR, Yahoo Finance, MSN Finance, Google Finance, etc.
How is evaluating "green" companies any different than evaluating "brown" companies?
 

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It should be pointed out that if you are buying dividend stocks inside a TFSA,
you will not be able to take advantage of the favourable tax treatment of dividends.
Dividend payers (canadian), should be held in taxable accounts where possible.....interest and other income should be in tax deferred accounts,,,TFSA, RRSP, RRIF etc.
<snip>
People say this constantly, but unless your maxing out your TFSA and RRSP AND forcing other savings to be held in a normal account that pays in a form that is not tax preferred, the TFSA / RRSP is the way to go. The OP has $2000 to invest at this time, which makes me think he's better off AT THIS TIME using his TFSA or RRSP.
 

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I'm not interested in buying the ETF. There is an ETF for everything.

My point was more that I wish I had a stock evaluation tool that I could rely on as part of my analysis.
Why not start with the Jantzi Social Index. It's not a tool per se, but it will provide guidelines and examining qualifying constituents for possible ideas provided these companies meet your own criteria.

In January 2000, Jantzi Research launched the Jantzi Social Index®, partnered with Dow Jones Indexes. The JSI, a socially screened, market capitalization-weighted common stock index modelled on the S&P/TSX 60 consists of 60 Canadian companies that pass a set of broadly based environmental, social, and governance rating criteria. The JSI has begun to generate the first definitive data on the effects of social screening on financial performance in Canada.
The corresponding Canadian ETF is XEN from which you can glean candidates for further study.
 

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warp i beg to differ on the tfsa.

it's true one loses the benefit of the dividend tax credit if stock is held in tfsa. But the final effect is quite unlike the rrsp, which is going to convert those dividends to fully-taxable income some year in the future & will then tax the taxpayer at the highest rate. In the rrsp, investor would be migrating tax-favoured income into heaviest-taxed income.

the final effect in the tfsa is that dividends will compound tax-free forever. Investor would be migrating tax-favoured income into tax-free income. Gains in tfsa will be tax-free as well.

traditionally, when there were decent interest-bearing instruments around, we used to throw these into registered accounts & keep the eligible dividends in non-registered accounts. But times are screwy now, and interest is zip except for the scariest of paper. This is why it can make some sense to keep a high-dividend payor in tfsa right now, because, quite simply, there's no bond like it.
 

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Why not start with the Jantzi Social Index. It's not a tool per se, but it will provide guidelines and examining qualifying constituents for possible ideas provided these companies meet your own criteria.



The corresponding Canadian ETF is XEN from which you can glean candidates for further study.
thanks - i've been through those ETFs.

What i'm trying to figure out is the best way to evaluate dividend paying stocks (green or not). Frugal Trader told to do something like: dividend payout / desired yield = stock price, the thing is, when I do this sort of calculation all the stocks I am interested in (BMO, TRP, TA etc) never seem to meet the buying price I should be looking for. I'm not sure i'll ever make a buy!
 

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There are many stock evaluation tools - what specifically are you looking for?
Once you have the names of the companies it is not hard to find information for evaluating them.
Their website, the financial reports, SEDAR, Yahoo Finance, MSN Finance, Google Finance, etc.
How is evaluating "green" companies any different than evaluating "brown" companies?
two seperate things here. I brought up green as an interest of ours. We are also interested in non-alternative energy stocks. There is no difference in evaluating them - you have merged the two points due to my lack of clear writing last night. So forget the "green" (that was a comment) - what i'd like is a tool that analyzes dividend stocks and when I should buy the stock.

I've been through all of those online data tools (save SEDAR) - what I am looking for is a way to properly evaluate the information - ideally automated, and free. Please see my last post regarding how i've been looking @ stocks and the difficulty finding ones I should be buying (right now none of them!).
 

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I've been through all of those online data tools (save SEDAR) - what I am looking for is a way to properly evaluate the information - ideally automated, and free. Please see my last post regarding how i've been looking @ stocks and the difficulty finding ones I should be buying (right now none of them!).
OK, so if I understand correctly what you are asking for, such an objective tool does not exist.
No tool can tell you what to buy.
There are stock screens all over the Internet (some free, some not) that will identify stocks based on your criteria (such as P/E, dividend yield, payout ratio, etc.)
There are Finance sites that present a summarized view into a company's financial state that you can use to evaluate a company.
There are sites that provide analyst report on specific companies.
However, at the end of the day, you have to decide whether a company is worth buying for you.
Your buy decision can be based simply on a company's current price vis-a-vis the 52-week range, or its current P/E ration, or it's current dividend yield.
Or your buy decision can be based on a variety of factors such as its business model, future prospects, management, etc.
It's all subjective.

Use the tools to get a view into things that are important for you and then make your decision.

There are many tools that give you a summarized view into the company's financials.

That said, in my personal opinion, the stocks that you listed above (TA, TRP, BMO) are very overvalued right now.
But that's just my opinion.
 
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