Thursday, September 22, 2016

Bear Market Income

When I wrote Going to ETFs I looked to compare how I did against the TSX and a comparable ETF of CDZ that tracks the Dividend Aristocrat Index of the TSX. I thought this last index might be more comparable to my stocks. In the next post of Going to ETFs 2 I looked to compare how I did against the US indexes of S&P 500 and NASDAQ.

Also in the past I wrote about Recovery from Bears where I looked to see how well my portfolio recovered from bear markets. I also wrote about Me and CDZ on how my portfolio compared to the Dividend Aristocrat Index ETF of CDZ.

In this post I thought the next step was to see if income kept pace with my stock portfolio. So now I am looking at income from my accounts and how it grew over this same period. I use Quicken, so this is where I got my information from. My income comparison shows that growth was not even, but income does keep pace with portfolio values. My chart is below.

Date Time YoY Y to Beg Trad Accts YoY Y to Beg. Income YoY Y to Beg.
30-May-08
27-Feb-09 0.75 0.75 -27.63% -27.63% -3.09% -3.09%
31-Aug-10 1.51 2.25 40.28% 1.52% 13.61% 10.10%
28-Feb-11 0.50 2.75 13.96% 15.69% 1.02% 11.22%
31-May-12 1.25 4.00 -0.91% 14.64% 33.41% 48.39%
30-May-14 3.25 6.00 34.48% 54.17% 3.88% 54.15%
31-Aug-16 4.25 8.25 10.36% 70.15% 14.71% 76.82%

What is interesting to me is that income appeared to grow before the stock market. That is the income seemed to recover first and then waited for the market. My portfolio had recovered by August 2010 but the TSX had not. My portfolio was up just 1.5%, but income was up by 10% since May 2008. When the index was at the highest in February 2011 before a pullback, my income had grown just a bit at 1% between August 2010 and February 2011.

The same thing happened with the pullback, my income seem to have the biggest growth with the pullback at May 2012 with growth of 33% since Feb 2011and total growth of 48.4% since May 2008. At the recovery of the pullback in May 2014, my income grew just 3.9% between May 2012 and May 2014 with total growth since May 2008 at 54%. So my income did keep pace with the recovery, but it was the first to grow.

Below is the chart of TSX and the ETF CDZ so you can see the recovery of February 2011, pullback of May 2012 and final recovery of May 2014.

Date Time YoY Y to Beg TSX YoY Y to Beg. CDZ YoY Y to Beg.
30-May-08 14,715 $21.47
27-Feb-09 0.75 0.75 8,845 -39.89% -39.89% $12.16 -43.36% -43.36%
31-Aug-10 1.51 2.25 11,914 34.70% -19.03% $18.90 55.43% -11.97%
28-Feb-11 0.50 2.75 14,137 18.66% -3.93% $21.35 12.96% -0.56%
31-May-12 1.25 4.00 11,513 -18.56% -21.76% $21.56 0.98% 0.42%
30-May-14 3.25 6.00 14,604 26.85% -0.75% $26.01 20.64% 21.15%
31-Aug-16 4.25 8.25 14,598 -0.04% -0.80% $25.00 -3.88% 16.44%

On my other blog I wrote yesterday about Telus Corp. (TSX-T, NYSE-TU)... learn more. Tomorrow, I will write about Wajax Corp. (TSX-WJX, OTC- WJXFF)... learn more on Friday, September 23, 2016 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.

Tuesday, September 20, 2016

Going to ETFs 2

When I wrote Going to ETFs on Thursday, September 15, 2016 I thought it might be a good idea to see how US indexes have done compared to what I had.

I looked at the S&P 500 (SPX) on Market Watch and the comparison is below. The values can be obtained here. This did better than the TSX but is not up much from 2008.

Date Time YoY Y to Beg S&P 500 YoY Y to Beg. Trad Accts YoY Y to Beg.
30-May-08 1,400
27-Feb-09 0.75 0.75 735 -47.51% -4.52% -27.63% -27.63%
31-Aug-10 1.51 2.25 1,059 44.11% -2.32% 40.28% 1.52%
28-Feb-11 0.50 2.75 1,327 25.29% -0.50% 13.96% 15.69%
31-May-12 1.25 4.00 1,310 -1.27% -0.61% -0.91% 14.64%
30-May-14 2.00 6.00 1,924 46.80% 3.56% 34.48% 54.17%
31-Aug-16 2.26 8.25 2,171 12.86% 5.24% 10.36% 70.15%

I also looked at the NASDAQ (Comp) and the comparison is below. The values can be obtained here. The NASDAQ did better than the S&P 500.

Date Time YoY Y to Beg NASDAQ YoY Y to Beg. Trad Accts YoY Y to Beg.
30-May-08 2,523
27-Feb-09 0.75 0.75 1,378 -45.38% -7.78% -27.63% -27.63%
31-Aug-10 1.51 2.25 2,114 53.43% -2.78% 40.28% 1.52%
28-Feb-11 0.50 2.75 2,782 31.61% 1.76% 13.96% 15.69%
31-May-12 1.25 4.00 2,827 1.62% 2.07% -0.91% 14.64%
30-May-14 2.00 6.00 4,243 50.06% 11.69% 34.48% 54.17%
31-Aug-16 2.26 8.25 5,213 22.88% 18.28% 10.36% 70.15%

Next, I think it would be a good idea to see how the income on my portfolio did compare to my portfolio. The question is, did my income increase in line with the increase in my portfolio?

On my other blog I wrote yesterday about Energy Group Inc. (TSX-JE, NYSE-JE)... learn more. Tomorrow, I will write about Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 21, 2016 around 5 pm.

Today on my other blog I will write also about Accord Financial Corp (TSX-ACD, OTC-ACCFF)... learn more.

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.

Thursday, September 15, 2016

Going to ETFs

A blogger, Boomer and Echo talks in a recent blog entry about selling a portfolio of 24 Canadian dividend-paying stocks and REITs and buying Vanguard ETFs VCN (Canadian stocks) and VXC (U.S. and International stocks).

ETFs are fine if you want a portfolio with no work and no thought and are willing to pay because of this. There are several ways of paying. First there are fees although some ETFs have very low fees. The blogger mentions a MER of 0.05%. However, the site for Vanguard says there are management fees of 0.05% and MER of 0.06% which will total 0.11%. Still it is low. A lot of ETFs can be gotten for MERs of 0.50%. You also pay the cost of associated with any purchase and sale of stocks within the ETF.

A way I personally would pay is that I think ETFs would be more volatile than my portfolio and would have an overall lower return. They would also take longer to recover from bear markets. Later on in this post I use the bear market of 2008 to compare my portfolio with the TSX and ETF of CDZ. In the past I also compared my portfolio with the TSX and the bear market of 2000.

However, this is only my stock portfolio that I use for comparison so who knows what others would do. Also for the ETFs I used only CDZ for one bear market. I really cannot go further as ETFs have not been around that long and CDZ was not around for the 2000 bear market. I hope in the future to compare my portfolio with the TSX Index in other bear markets and look at US S&P 500 in comparison to my portfolio during the last bear market.

All ETFs tend to try to match an index. The Vanguard ETFs VCN says that it follows FTSE Canada All Cap Index. This ETF has not been around that long, just from the middle of 2013, so I cannot see how well it did coming out of the last bear market. This Index is described here. It currently has 271 large, median and small Canadian Stocks.

The problem with all indexes is that you get the good with the bad. Generally indexes are set up by filters. If you have ever used filters to find good stocks with some good characteristics, you will know that they can throw up some really awful stocks. It is not that I have not had some stocks that did not turn out well. For example my investment in TransAlta Corp (TSX-TA, NYSE-TAC) comes immediately to mind.

My son has a 20 stock portfolio worth a few hundred thousand and has both TransAlta Corp (TSX-TA, NYSE-TAC) and Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF). His portfolio was momentarily depressed as was his dividend income because of these stocks. But it recovered quite well. You are going to make mistakes in buying stocks. This is something that needs to be accepted.

Indexes that I have checked do not do as well in bear markets that my portfolio does. I never do as well in a bull market, but I also never do as poorly in a bear market. I think that I am better off with less volatility.

This first chart shows that the CDZ did better than the TSX Index in recovering from the last bear market. From May 30, 2008 to 30 May 2014 the TSX was still down by 0.75% and the CDZ was up by 21.2%.

Date Time YoY Y to Beg TSX YoY Y to Beg. CDZ YoY Y to Beg.
30-May-08 14,715 $21.47
27-Feb-09 0.75 0.75 8,845 -39.89% -39.89% $12.16 -43.36% -43.36%
31-Aug-10 1.51 2.25 11,914 34.70% -19.03% $18.90 55.43% -11.97%
28-Feb-11 0.50 2.75 14,137 18.66% -3.93% $21.35 12.96% -0.56%
31-May-12 1.25 4.00 11,513 -18.56% -21.76% $21.56 0.98% 0.42%
30-May-14 3.25 6.00 14,604 26.85% -0.75% $26.01 20.64% 21.15%
31-Aug-16 4.25 8.25 14,598 -0.04% -0.80% $25.00 -3.88% 16.44%

The next chart shows that I did even better with my portfolio up by 54% compared to the CDZ up by 21.2% between May 30, 2008 and 30 May 2014. I have added present values and I have done even better with CDZ up by 16% but mine up 70%. I can only guess at the reason I have done so much better and that is probably because I have very little in the way of resource stocks.

Date Time YoY Y to Beg Trad. Accts YoY Y to Beg. CDZ YoY Y to Beg.
30-May-08 $21.47
27-Feb-09 0.75 0.75 -27.63% -27.63% $12.16 -43.36% -43.36%
31-Aug-10 1.51 2.25 40.28% 1.52% $18.90 55.43% -11.97%
28-Feb-11 0.50 2.75 13.96% 15.69% $21.35 12.96% -0.56%
31-May-12 1.25 4.00 -0.91% 14.64% $21.56 0.98% 0.42%
30-May-14 3.25 6.00 34.48% 54.17% $26.01 20.64% 21.15%
31-Aug-16 4.25 8.25 10.36% 70.15% $25.00 -3.88% 16.44%

Note that the CDZ stock prices have changed since I looked at them last. I picked up the new values recently. It seems that CDZ has mini splits.

The last point to make is that it is not as easy or no work with ETFs as you might image. There are more Canadian ETFs than there are Canadian Stocks. This is the same with mutual funds. You still have to sort through a lot of information to pick ETFs for your portfolio. I would think a good blogger to look at is Canadian Couch Potato and his information on model portfolios. An alternative blogger is Million Dollar Journey.

If you are going to invest in the market, you have to be prepared for bear markets. With dividend stocks you might be more reassured because you dividends are still coming in.

What I exclude from my values is my emergency fund (as I have no health insurance benefit and might have other expenses during the year), my line of credit, my US trading account (because Quicken does not handle exchange rates well) and my insurance policy. Quick always uses the current exchange rate for all values. I believe that you need to use the exchange rate appropriate to the date of a value to properly assess an account's growth. The cash value of my insurance policy only grows. In any event, all these items comprise only 1.7% of my assets.

On my other blog I wrote yesterday High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more. Tomorrow, I will write about Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more on Friday, September 16, 2016 date 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.

Tuesday, September 13, 2016

Defined Contribution Pensions

If I was starting out working I would want a Defined Contribution Pension plan rather than a Defined Benefit Pension plan. If you are young and are not working in an organization that you will stay in to retirement, you are much better off with the Defined Contribution Pension plan. This is because when you stop working for an organization and you are young you get very little from a Defined Benefit plan.

If you are young you get more money from a Defined Contribution Pension plan when you stop working for an organization. This is because with the Defined Contribution Pension plan everyone gets the same amount of money each year. If you are young under the Defined Benefit plan little is paid into the pension for you and you get little when you leave. Any benefit you earn is discounted back to the present day.

If you say that you do not know how to invest, you are young and you can learn by doing. Or you can cop out and use ETFs for Mutual Funds. Most Defined Contribution Pension plans provide options for investing your money. When you leave you get to take it all with you and can put it into a locked-in RRSP which you can completely control.

If you do not want to manage your money yourself you will have to pay someone to do so. No one works for nothing, so do not expect to have others do your investing for free. If you think that your organization would be better qualified to make the decisions for you, you could be very wrong. There are currently a lot of pension plans in trouble. The ones with the most problems seems to be those run by governments.

Chile has had an interesting experience in pension funding. An article by Orazio Attanasio , Costas Meghir, and Olivia S. Mitchell in Fortune Magazine talks about some proposed changes and makes the point that Pay-as-you-go (PAYG) retirement programs in the U.S. and many European countries are struggling. There have been mass protests by Chilean's about the low pensions people are getting. See an article by Laura Millan Lombrana in Bloomberg. .

There is quite a good article about Chilean's pension funding by Nicholas Vardy at Stock Investor. Certainly since the pension is government mandated, the government should have set rules about fees. Also, it is not a bad idea to get companies to contribute the employee's pension plans. There is very balance article on Chile's Pension problems by Andres Velasco at Project Syndicate.

Assuming that the government would have done better is foolish as shown by the many pension plans that are problems today. Mostly government liked to run pension plans because of all the money they can control. All the government plans were PAYG and they provided government with lots of money in the past. The problem now is that because of demographics, there are going to be more retirees than payers for these plans and something will have to be done.

Governments do not necessarily invest for the welfare of the pensioners. Look at Quebec where the government controls the pension plans of government employees. They invest money of this plan for political reasons. That is why the Teacher's Union in Ontario fought to control their pension money rather than have the Ontario Government do it. CPP seems better where they raised the rates in 2000 to try to move the Pension Plan from a strictly PAYG. The extra money is being invested by an independent board. However, a future government could change this.

Every system has its faults. In Canada we have RRSP accounts. I had one because I changed companies so I would not be retiring with a company pension. If you do a poor job of handling this account you suffer in retirement for lack of money. You also suffer if you do well as I did. A big percentage of my withdrawals go for taxes. The RRSP money increases my taxable income and puts me in a higher tax bracket. So I am not benefiting from managing my RRSP well.

On my other blog I wrote yesterday about ATCO Ltd. (TSX-ACO.X, OTC- ACLLF)... learn more. Tomorrow, I will write about High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more on Wednesday, September 14, 2016 date 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.

Thursday, September 8, 2016

Something to Buy September 2016

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 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.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

However, no system is perfect. But if you are interested in buy 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 September 2016 Spreadsheet 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.

Note that I am separating out Real Estate and REITs as they have been taken from Financials and put into their own category.

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 21 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Eight (or 38%) are showing cheap by historical median dividend yield. They are Canadian Tire Corporation (TSX-CTC.A, OTC-CDNAF), Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A), Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI). Canadian Tire Corporation (TSX-CTC.A, OTC-CDNAF) is added to this list and High Liner Foods (TSX-HLF) has been deleted.

I follow 12 Consumer Staples stocks. There are no companies showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by historical median dividend yield. These are Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L, OTC-LBLCF). Empire Company Ltd. TSX-EMP.A, OTC-EMLAF) is no longer showing as cheap by the historically high dividend yield.

I only follow two Health Care stocks and both are US stocks. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.

I follow 12 Real Estate stocks. No stock is showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. There is no change from last month.

I follow 7 Bank stocks. None are showing as cheap by the historically high dividend yield. Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD).

I follow 13 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Seven (or 54%) stocks are showing cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B); Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX); DirectCash Payments Inc. (TSX-DCI); Gluskin Sheff + Associates Inc. (TSX-GS); IGM Financial (TSX-IGM) and Power Corp (TSX-POW) Equitable Group Inc. (TSX-EQB, OTC-EQGPF) is no longer on this list.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change from last month.

I follow 34 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. There is one less because I have reclassified some stocks in the Material section because TSX is classifying them this way.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Bird Construction Inc. (TSX-BDT, OTC-BIRDF), SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). Bird Construction Inc. (TSX-BDT, OTC-BIRDF) is new to this list.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). This is the same as last month.

I have 9 Manufacturing stocks. No stock is showing as cheap by the historically high dividend yield. Five stocks or 56% are showing as cheap by historical median dividend yield. They are Canam Group Inc. (TSX-CAM, OTC-CNMGA), Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF). This is the same as last month.

I have 16 Services stocks. Pason Systems Inc. (TSX-PSI, OTC-PSYTF) is showing as cheap by the historically high dividend yield. Three stocks or 19% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI); Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF) Wajax Corp (TSX-WJX, OTC-WJXFF) is off this list.

I follow 7 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 16% are showing as cheap by historical median dividend yield. That stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). There is no change from last month.

I follow 9 Energy stocks. One Stock or (11%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF) There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ); Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). Suncor Energy (TSX-SU, NYSE-SU) is no longer cheap by historical high dividend yield.

I follow 7 Tech stocks. None are showing as cheap by historical high dividend yield. Four stocks (or 57%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF); Calian Technologies Ltd (TSX-CTY, OTC-CLNFF), Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF) and Evertz Technologies (TSX-ET, OTC-EVTZF). There is no change from last month.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF); and Enbridge Inc. (TSX-ENB, NYSE-ENB). Veresen Inc. (TSX-VSN, OTC-FCGYF) is no longer cheap by historical median dividend yield.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. One stock (or 8%) is showing cheap by historical median dividend yield. That stock is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no change from last month.

I follow 5 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). There is no change from last month.

On my other blog I wrote yesterday about Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more. Tomorrow, I will write about Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more on Friday, September 9, 2016 around 10 am.

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.

Tuesday, September 6, 2016

Dividend Stocks September 2016

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 September 2016.
  • I have 1 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 35 stocks with a dividend yield higher than the historical average dividend yield
  • I have 61 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.
When I did my list last month,
  • I have 4 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 63 stocks with a dividend yield higher than the historical median dividend yield and
  • 52 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list in January 2014,
  • 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.
If you had one share of each stock, total dividends last month would be $150.10. This month dividends would be $150.45. Of the stock that I follow 7 stocks has raised their dividends since last month. Dividends raises are denoted in green. Those stocks are shown below.

Royal Bank (TSX-RY, NYSE-RY)
Saputo Inc. TSX-SAP, OTC-SAPIF)
Bank of Nova Scotia (TSX-BNS, NYSE-BNS)
Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF)
Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF)

Keyera Corp (TSX-KEY, OTC-KEYUF)
Newfoundland Capital Corp (TSX-NCC.A)

Of the stocks that I follow no company has decreased their dividends.

Of the stocks that I follow 1 company has suspended their dividends. Those stocks are shown below.

Canexus Corporation (TSX-CUS, OTC-CXUSF)

Most of my stocks started out as Dividend Payers. Currently 15 stocks are not paying any dividends and this would be some 10.14% of the stocks that I follow. Three of these stocks never had dividends, so 8.11% 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.

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 about Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more. Tomorrow, I will write about Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more on Wednesday, September 7, 2016 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.

Thursday, September 1, 2016

TTC Budget

Yes, the TTC needs proper funding. An editorial in the Toronto Star has sympathy for the TTC. Unfortunately this sympathy and any budget cuts may not get us a TTC that operates better. Government Agencies are not noted for competencies.

However, the TTC also waste money. Take the second exit for the Donlands station. They decided to use the properties of two houses at the end of Strathmore Blvd for the second exit. They then bought these two houses. The houses have been empty for some time now.

The thing is that the TTC now perhaps want to move the second exit to the north side of Strathmore Blvd. near Donlands Avenue. This would require the buying to new houses and the selling of the ones already owned. Problem is that the TTC has yet to make up its mind on where to put the second exit. All this monkeying around have cost TTC lots of money. There is a need to make decisions and then go with them.

I go past the Bay Subway Station every day. It has been months since the new turnstiles have been put into place, but every day I see that some are not working. Also it would seem that the TTC has not been able to implement a solution to cover the spaces between the walls and the new turnstiles. (Actually I went pass there today and they are all working. There is still not solution for the spaces between walls and new turnstiles through.)

The Spadina subway extension has been plagued by problems, delays and cost overruns. There is a CBC news item on this. Here is another CBC news item on this.

The Eglinton Crosstown is being delayed by a year. Tess Kalinowski wrote an article in the Toronto Star on this last year. Mark McAllister also talks about this in a Global News article.

To my mind, I have no sympathy for the TTC. Just what I have point out above have costs lots of money. How about this, if the people at the TTC cannot do their jobs competently, they should be fired and people who can do the job hired.

On my other blog I wrote yesterday about Andrew Peller Ltd. (TSX-ADW.A, OTC-ADWPF)... learn more. Tomorrow, I will write about Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF)... learn more on Friday, September 2, 2016 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.