Monday, July 27, 2015

Dividend Income Growth 2

Last week I talked about Dividend Income Growth using possible samples. What I want to talk about today is what actually happened on my stock of Royal Bank and RioCan. I am comparing what my spreadsheet would calculate compared with what really occurred. Increases in dividends are never smooth.

For RioCan, my first dividend increase was one of the highest for this stock. This increase for RioCan occurred between when I bought the stock and the first dividend payment.

Stock Ori Yield Div Growth Income
RY SS 4.13% 11.56% $528.00
RY Actual 4.13% 11.56% $528.00
RIO SS 7.67% 2.92% $860.00
RIO Actual 7.67% 2.92% $950.00


In year 5 the following chart shows what the spreadsheet calculation is compared to what I was actually receiving. What I was actually receiving was higher in both cases. For these stocks the dividend increases were better to begin with that what occurred later.

Stock Ori Yield Div Growth Income
RY SS 4.13% 11.56% $816.00
RY Actual 4.13% 11.56% $912.00
RIO SS 7.67% 2.92% $980.00
RIO Actual 7.67% 2.92% $1,105.00


In year 10 the following chart shows what the spreadsheet calculation is compared to what I was actually receiving. Here again I was actually receiving more for my actual stocks than what the spreadsheet calculation would show.

Stock Ori Yield Div Growth Income
RY SS 4.13% 11.56% $1,408.00
RY Actual 4.13% 11.56% $1,888.00
RIO SS 7.67% 2.92% $1,130.00
RIO Actual 7.67% 2.92% $1,327.50


In year 15 the following chart shows what the spreadsheet calculation is compared to what I was actually receiving. In this year I am still receiving more than what the spreadsheet calculation was, but spreadsheet calculations are catching up what I was actually receiving.
Stock Ori Yield Div Growth Income
RY SS 4.13% 11.56% $2,432.00
RY Actual 4.13% 11.56% $3,200.00
RIO SS 7.67% 2.92% $1,300.00
RIO Actual 7.67% 2.92% $1,380.00


In year 20 the following chart shows what the spreadsheet calculation is compared to what I was actually receiving. For the Royal Bank the spreadsheet calculations almost meet what I was receiving. For RioCan, the spreadsheet shows a higher income that what I actually got. For RioCan, dividends have been flat lately.

Stock Ori Yield Div Growth Income
RY SS 4.13% 11.56% $4,240.00
RY Actual 4.13% 11.56% $4,344.00
RIO SS 7.67% 2.92% $1,500.00
RIO Actual 7.67% 2.92% $1,450.00


See the full spreadsheet here.

On my other blog I am today writing about Atlantic Power Corp. (TSX-ATP, NYSE-AT) ... continue...

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. Follow me on Twitter.

Wednesday, July 22, 2015

Dividend Income Growth

Today I want to talk samples of what dividend growth can do for you. The problem with doing straight calculations is that life is messier than such calculations, but in another post I will talk about my actual experience.

What I will illustrate is 6 different scenarios, 3 with higher dividends and 3 with lower dividends and all with different dividend growth rates. I am basing these scenarios on some actual performance of stocks I own. The scenarios are as shown below with the names of stocks which matched in the past these sorts of original dividends and dividend growth rates.

In all these scenarios, you have invested $10,000 at $10 a share for a 1,000 shares of each stock. In the first table I am showing what dividends you would receive in the first year of holding these stocks. I have highlighted the stocks with the highest initial yearly dividend payment.

# Similar Ori Yield Div Growth Income
1 RY 4.70% 11.00% $520.00
2 BMO 6.70% 6.30% $710.00
3 RIO.UN 7.60% 3.10% $780.00
4 ATD.B 0.80% 15.30% $90.00
5 SAP 2.20% 11.80% $250.00
6 SNC 1.90% 22.00% $230.00


In year 5 the following chart shows what you would be receiving from each stock. I have highlighted what stocks would be producing the most and the least in dividend income.

# Similar Ori Yield Div Growth Income
1 RY 4.70% 11.00% $790.00
2 BMO 6.70% 6.30% $900.00
3 RIO.UN 7.60% 3.10% $880.00
4 ATD.B 0.80% 15.30% $160.00
5 SAP 2.20% 11.80% $390.00
6 SNC 1.90% 22.00% $500.00


In year 10 the following chart shows what you would be receiving from each stock. I have highlighted what stocks would be producing the most and the least in dividend income.

# Similar Ori Yield Div Growth Income
1 RY 4.70% 11.00% $1,340.00
2 BMO 6.70% 6.30% $1,220.00
3 RIO.UN 7.60% 3.10% $1,030.00
4 ATD.B 0.80% 15.30% $320.00
5 SAP 2.20% 11.80% $680.00
6 SNC 1.90% 22.00% $1,340.00


In year 15 the following chart shows what you would be receiving from each stock. I have highlighted what stocks would be producing the most and the least in dividend income.

# Similar Ori Yield Div Growth Income
1 RY 4.70% 11.00% $2,250.00
2 BMO 6.70% 6.30% $1,660.00
3 RIO.UN 7.60% 3.10% $1,030.00
4 ATD.B 0.80% 15.30% $670.00
5 SAP 2.20% 11.80% $1,190.00
6 SNC 1.90% 22.00% $3,610.00


In year 20 the following chart shows what you would be receiving from each stock. I have highlighted what stocks would be producing the most and the least in dividend income.

# Similar Ori Yield Div Growth Income
1 RY 4.70% 11.00% $3,810.00
2 BMO 6.70% 6.30% $2,250.00
3 RIO.UN 7.60% 3.10% $1,390.00
4 ATD.B 0.80% 15.30% $1,370.00
5 SAP 2.20% 11.80% $2,090.00
6 SNC 1.90% 22.00% $9,750.00


See the full spreadsheet here.

On my other blog I am today writing about Inter Pipeline Ltd. (TSX-IPL, OTC-IPPLF) ... continue...

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. Follow me on Twitter.

Monday, July 20, 2015

Dividend Growth Calculation 3

Last week I talked about comparing actual dividend growth calculations on Royal Bank (TSX-RY) and RioCan REIT (TSX-REI.UN) to what my spreadsheet predicted. In this blog entry my actual stock did better than my spreadsheet predicted for both stocks. The reason for this is probably both stocks had strong dividend growth early and weak dividend growth or none later on.

In this post, I relooked at my spreadsheet and did more calculations for these stocks. What I changed was to reverse the timing of the dividend increases so the good ones were at the end and the weak ones were near the beginning. So I used year 20 increases for year 1, year 19 increase for year 2, year 18 increase for year 3 and down to year 1 increase for year 20.

As you can see in the charts below after 5 years, when I reversed the order of the dividend increases, the new spreadsheets show the reversed order with the lowest dividend yield on original stock price and lowest percentage of the stock price coverage.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 7.14% 29.04%
RY Actual 4.13% 11.56% 7.85% 30.20%
Reversed 4.13% 11.56% 5.62% 24.53%
RIO SS 7.67% 2.92% 8.86% 41.85%
RIO Actual 7.67% 2.92% 10.09% 47.87%
Reversed 7.67% 2.92% 8.25% 40.35%


After 10 years the chart with the dividend order reversed is still giving the lowest dividend yield on original stock price and the lowest percentage of the stock price coverage.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 12.34% 79.21%
RY Actual 4.13% 11.56% 16.25% 92.18%
Reversed 4.13% 11.56% 9.53% 59.28%
RIO SS 7.67% 2.92% 10.23% 90.17%
RIO Actual 7.67% 2.92% 12.12% 105.08%
Reversed 7.67% 2.92% 8.58% 82.06%


After 15 years the chart with the dividend order reversed is still giving the lowest dividend yield on original stock price and the lowest percentage of the stock price coverage.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 21.32% 165.91%
RY Actual 4.13% 11.56% 27.55% 219.73%
Reversed 4.13% 11.56% 19.72% 134.28%
RIO SS 7.67% 2.92% 11.81% 145.97%
RIO Actual 7.67% 2.92% 12.60% 167.92%
Reversed 7.67% 2.92% 10.31% 129.37%


After 20 years the chart with the dividend order reversed has a dividend yield on original stock price close to the actual, but it still has the lowest percentage of the stock price coverage.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 36.85% 315.72%
RY Actual 4.13% 11.56% 37.47% 389.57%
Reversed 4.13% 11.56% 37.47% 284.59%
RIO SS 7.67% 2.92% 13.64% 210.41%
RIO Actual 7.67% 2.92% 13.61% 233.37%
Reversed 7.67% 2.92% 13.56% 187.09%


See the full spreadsheet here.

On my other blog I am today writing about TMX Group Ltd. (TSX-X, OTC-TMXXF) ... continue...

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. Follow me on Twitter.

Wednesday, July 15, 2015

Dividend Growth Calculations 2

What I want to talk about today is the difference between my spreadsheet calculations and what actually happened on a stock. I am comparing the results of my spreadsheet calculations with actual results from Royal Bank (TSX-RY) and RioCan (TSX-REI). Spreadsheet calculations smooth year to year calculations out so actual results and spreadsheet results will vary.

I redid the spreadsheets using the actual original yields, actual growth and actual original stock price. One section shows calculations starting from actual original yields and actual growth, but I calculated yearly dividend yield on original amounts and percentage of the stock's cost covered. Another section shows not only actual original yield and percentage of stock covered, but uses actual dividends granted each year.

So this first chart shows what has occurred after 5 years. I am comparing RY Spreadsheet calculations to RY Actual (that is what actually occurred) and RIO Spreadsheet calculations to RIO Actual . Titles are Original Yield, Dividend Growth over 20 years, Dividend yield on original cost after 5 years and Percentage of stock's cost paid after 5 years.

As you can see after 5 years the actual stock did better. In both these stocks earlier years had better dividend growth than later years.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 7.02% 28.65%
RY Actual 4.13% 11.56% 7.85% 30.20%
RIO SS 7.67% 2.92% 8.86% 41.85%
RIO Actual 7.67% 2.92% 10.09% 47.87%


After 10 years this is where both stock stand against the spreadsheet calculations. In Both Dividend Yield on the original stock cost and percentage of stock's cost covered are better.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 12.12% 78.10%
RY Actual 4.13% 11.56% 16.25% 92.18%
RIO SS 7.67% 2.92% 10.23% 90.17%
RIO Actual 7.67% 2.92% 12.12% 105.08%


After 15 years this is where both stock stand against the spreadsheet calculations. In Both Dividend Yield on the original stock cost and percentage of stock's cost covered are better.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 20.94% 163.09%
RY Actual 4.13% 11.56% 27.55% 219.73%
RIO SS 7.67% 2.92% 11.81% 145.97%
RIO Actual 7.67% 2.92% 12.60% 167.92%


After 20 years this is where both stock stand against the spreadsheet calculations. In the percentage of stock's cost covered both the actuals are better. However, if you notice the dividend yield on original costs are getting close with RY Spreadsheet calculation at 36.36% and the actual at 37.47%. For RIO, the spreadsheet calculation of dividend yield on original cost is a bit higher at 13.61% compared to the Actual of 13.61%.

Stock Ori Yield Div Growth Div Yield % of stock
RY SS 4.13% 11.56% 36.36% 310.88%
RY Actual 4.13% 11.56% 37.47% 389.57%
RIO SS 7.67% 2.92% 13.64% 210.41%
RIO Actual 7.67% 2.92% 13.61% 233.37%


See the full spreadsheet here.

On my other blog I am today writing about Saputo Inc. (TSX-SAP, OTC-SAPIF) ... continue...

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. Follow me on Twitter.

Monday, July 13, 2015

Game of Chicken

I read Ben Hunt, writer of the Epsilon Theory on a regular basis. He is always interesting. Lately he wrote a post about how he thought the EU and Greece were playing a game of Chicken. See his post here.

To me it certainly seemed like the EU and Greece were playing games and it was hard to see how it would end and what the implications of a deal or no deal with Greece was. Certainly a number of people did not think that it would be a catastrophe if Greece did leave the Euro. However, no one seemed to know exactly how good or bad it would be. In the end it seems like Greece craved in.

On my other blog I am today writing about Suncor Energy Inc. (TSX-SU, NYSE-SU) ... continue...

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. Follow me on Twitter.

Wednesday, July 8, 2015

Something to Buy July 2015

There is always something to buy in the stock market. On Monday, 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 my spreadsheet at here 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.

I follow 19 stocks in the consumer discretionary category. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Five stocks (or 26%) are showing cheap by the historical average dividend yield, 6 (or 32%) are showing cheap by historical median dividend yield and 4 (or 21%) are showing cheap by 5 year median dividend yield.

I follow 10 Consumer Staples stocks. None are showing as cheap by the historically high dividend yield. Three stocks (or 30%) are showing cheap by the historical average dividend yield, 2 (or 20%) are showing cheap by historical median dividend yield and 1 (or 10%) is showing cheap by 5 year median dividend yield.

I only follow two Health Care stocks and both are US stocks. They are both only cheap by the historical average dividend yield and the historical median dividend yield.

I follow 12 Real Estate stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by the historical average dividend yield, 4 (or 33%) are showing cheap by historical median dividend yield and 5 (or 42%) are showing cheap by 5 year median dividend yield.

I follow 6 Bank stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 33%) are showing cheap by the historical average dividend yield, 4 (or 67%) are showing cheap by historical median dividend yield and 5 (or 83%) are showing cheap by 5 year median dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Three stocks (or 25%) are showing cheap by the historical average dividend yield, 7 (or 58%) are showing cheap by historical median dividend yield and 6 (or 50%) are showing cheap by 5 year median dividend yield.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. One stock (or 20%) is showing cheap by the historical average dividend yield, 4 (or 80%) are showing cheap by historical median dividend yield and none are showing cheap by 5 year median dividend yield.

I follow 34 Industrial stocks. None are showing as cheap by the historically high dividend yield. Eleven stocks (or 32%) are showing cheap by the historical average dividend yield, 12 (or 35%) are showing cheap by historical median dividend yield and 13 (or 38%) are showing cheap by 5 year median dividend yield.

I follow 7 Tech stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 57%) are showing cheap by the historical average dividend yield, 2 (or 28%) cheap by historical median dividend yield and cheap by 5 year median dividend yield.

I follow 10 Energy stocks. Four Stocks or (40%) are showing as cheap by the historical high dividend yield, 6 stocks (or 60%) are showing cheap by the historical average dividend yield, 7 (or 70%) are showing cheap by historical median dividend yield and 7 (or 70%) are showing cheap by 5 year median dividend yield.

I follow 2 Material stocks. None are showing as cheap by the historically high dividend yield. Both stocks are showing cheap by the historical average dividend yield, 1 is showing cheap by historical median dividend yield and 2 are showing cheap by 5 year median dividend yield.

I follow 8 of the infrastructure type utility companies. Only 4 stocks (or 50%) are showing cheap by 5 year median dividend yield and that is it.

I follow 12 of the power type utility companies. Two stocks (or 17%) are showing cheap by the historical average dividend yield, 3 (or 25%) are showing cheap by historical median dividend yield and 6 (or 50%) are showing cheap by 5 year median dividend yield.

I follow 5 of the Telecom Service type utility companies. One stocks (or 20%) is showing cheap by the historical high dividend yield, 3 stocks (or 60%) is showing cheap by the historical average dividend yield, 3 (or 60%) are showing cheap by historical median dividend yield and 2 (or 33%) are showing cheap by 5 year median dividend yield.

On my other blog I am today writing about AGT Food and Ingredients Inc. (TSX-AGT, OTC- AGXXF) ... continue...

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. Follow me on Twitter.

Monday, July 6, 2015

Dividend Stocks July 2015

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 July 2015.

On this list,
  • I have 6 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 47 stocks with a dividend yield higher than the historical average dividend yield
  • I have 57 stocks with a dividend yield higher than the historical median dividend yield and
  • 57 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last month,
  • I have 7 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 40 stocks with a dividend yield higher than the historical average dividend yield
  • I have 55 stocks with a dividend yield higher than the historical median dividend yield and
  • 50 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.
Of the stock that I follow 6 stocks have raised their dividends since last month. Dividends raises are denoted in green. The stocks that have increased their dividends are shown below.

Andrew Peller Ltd (TSX-ADW.A)
Canadian Real Estate (TSX-REF.UN)
Jean Coutu Group Inc. (TSX-PJC.A)
Keg Royalties Income Fund (TSX-KEG.UN)
Medtronic Inc. (NYSE-MDT)

Molson Coors Canada (TSX-TPX.B)

Of the stock that I follow 1 stock has decreased their dividends since last month. Dividends decreased are denoted in red. The company with the decreased dividend is Canyon Services Group (TSX-FRC).

Also FirstService Corp (TSX-FSV) became Colliers International Group Inc. (TSX-CIG) and the company spun off a new FirstService Corp (TSX-FSV). The old First Service Corp had a dividend of $0.50 per share. It would appear that holders of Subordinate Voting Shares of FirstService Corp will receive for each share held, 1 Subordinate Voting Share of Colliers International Group Inc. (TSX-CIG) and 1 Subordinate Voting Share new FirstService Corp (TSX-FSV).

The above split of FirstService Corp (TSX-FSV) is effective 1 June 2015. On June 1, 2015, the stock price was $81.94. On June 1, 2015 the stock price for each company was $33.51 for a total of $67.02. Since then the stock price of Colliers International Group Inc. (TSX-CIG) has been raising. Currently CIG is worth $48.99 and FSV is worth $35.99 for a total of $84.98. The dividend for each company is $0.40 per share, which is an increase in dividends paid.

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 am today writing about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF) ... continue...

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. Follow me on Twitter.