Wednesday, December 17, 2014

Dividend Yields

There have been a number of studies that show the higher the dividend yield when you buy a stock, the better the long term gain is. This article from MPL Communications tells the same story along with a lot more information on Dividend paying stocks.

It is interesting that a number of studies show the same sort of results, which is that the higher the yield at the start, the better the stock did in the longer term. I have stocks with low dividend yields and high dividend increases and high dividend yield with low dividend increases and ones in between. What I am going for is a relatively good dividend income increase each year. This is a slightly different thing.

I suspect that the high yields on the stock in Professor Jeremy Siegel study were high because the stock prices were low. This sort of fits into my looking at buying stocks when the relative dividend yield on a stock is more than historical averages or median values.

I do go on about this sort of thing when generally once a month I look at a stock's current dividend yield against its historical and 5 year median dividend yield.

On my other blog I am today writing about Mullen Group Ltd. (TSX-MTL, OTC- MLLGF)) ... 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, December 15, 2014

Warrants

A recent Daily Advisor email talks about warrants. This article is a through review of warrants and if you ever wanted to know what warrants are this is a good, readable explanation.

On my other blog I am today writing about H & R Real Estate Trust (TSX-HR.UN, OTC- HRUFF) ... 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, December 10, 2014

Buy Backs

This is an interesting article on Buy Backs from MPL Communications. It talks about the pros and cons to share Buy Backs. This is a subject all shareholders should be interested in.

I am not sure I like stock buy backs. I would rather see a company pay special dividends instead. Buy Backs can hide the fact that outstanding shares have increased due to stock options. They can make it appear than things like EPS is increasing when it is not or not increasing as much as it appears to be increasing.

I certainly do not like it when a company borrows money to do share Buy Backs. This is as bad as borrowing money to pay dividends or distributions.

On my other blog I am today writing about Finning International Inc. (TSX-FTT, OTC-FINGF) ... 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.

Tuesday, December 9, 2014

Globe & Mail Investors Site

I just noticed that the Globe and Mail has again downsized what they are showing on their site. I do not have a problem with this as I am looking at their investors' site less and less these days. If they think I will subscribe to their site, they probably do not realize how much I can replace all they used to provide with other sites.

I wrote an article in May 2014 pointing out other sites I was also using. See Research Information Sites

On my other blog I am today writing about Finning International Inc. (TSX-FTT, OTC-FINGF) ... 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, December 8, 2014

My computer is in a repair shop

My computer is in a repair shop today, so I do not think I will be doing any post today.

Wednesday, December 3, 2014

Something to Buy December 2014

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.

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. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In this spreadsheet I am saying stocks are relatively cheap by comparing the current dividend yield to the historically high dividend yield, the historically average dividend yield and the median dividend yield over the past 5 years. Note that my historical data varies by company.

When I say a stock is showing as relatively cheap historically I mean that the current dividend yield is higher than the historically high dividend yield. When I say that a stock is relatively cheap by the historical average, I mean that the current dividend yield is higher than the historical average dividend yield. When I say a stock is showing as relatively cheap by the 5 year median, I mean that the current dividend yield is higher than the 5 year median dividend yield.

Of the consumer discretionary stocks, Dorel Industries (TSX-DII.B A) is showing as relatively cheap historically. Other consumer discretionary stocks are relatively cheap by the historical average such as Goodfellow Inc. (TSX-GDL), Leon's Furniture (TSX-LNF) and Newfoundland Capital Corp (TYSX-NCC.A).

One Consumer Staple stocks is relatively cheap by the historical average and that is Saputo Inc. (TSX-SAP). Rogers' Sugar (TSX-RSI) is showing as relatively cheap by the 5 year median.

Both the US Health Care stocks I follow, that is Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT) are relatively cheap by the historical average.

Of the Real Estate Stocks, Granite Real Estate (TSX-GRT.UN) is relatively cheap by the historical average and H & R Real Estate Investment Trust (TSX-HR.UN) is showing as relatively cheap by the 5 year median.

Some of the banks still seem to be cheap. These would be Bank of Nova Scotia (TSX-BNS) and Royal Bank (TSX-RY) which are showing as relatively cheap by the historical average.

Of the Financial Services stocks, AGF Management (TSX-AGF) is still showing as cheap historically. CI Financial (TSX-CIX), Home Capital Group (TSX-HCG), IGM Financial (TSX-IGM) and Power Corp (TSX-POW) are showing as relatively cheap by the historical average. None of the Insurance group is show as cheap.

Of the industrials Hammond Power Solutions Inc. (TSX-HPS), PFB Corp (TSX-PFB) and Transcontinental Inc. (TSX-TCL) showing as relatively cheap historically. Also, Bombardier Inc. (TSX-BBD.B), Canam Group Inc. (TSX-CAM), Finning International Inc. (TSX-FTT), Pason Systems Inc. (TSX-PSI), Pulse Seismic Inc. (TSX-PSD) and SNC-Lavalin (TSX-SNC) are showing as relatively cheap by the historical average.

Other industrials are showing as relatively cheap by the 5 year median. They are Canexus Corporation (TSX-CUS), Canyon Services Group (TSX-FRC), Exchange Income Corp (TSX-EIF) and Wajax Corp (TSX-WJX)

There are not many companies in the Tech sector, but Calian Technologies Ltd (TSX-CTY) is showing as relatively cheap historically and Evertz Technologies (TSX-ET) is showing as relatively cheap by the historical average.

A number of energy stocks also seem cheap. Examples are Canadian Natural Resources (TSX-CNQ); Canadian Oil Sands Ltd (TSX-COS), Cenovus Energy Inc. (TSX-CVE), Ensign Energy Services (TSX-ESI) and Suncor Energy (TSX-SU) are showing as relatively cheap historically. Penn West Petroleum (TSX-PWT) is showing as relatively cheap by the 5 year median.

I have two materials stocks and both are showing up cheap. Teck Resources Ltd (TSX-TCK.B) is showing as relatively cheap historically. Barrick Gold Corp. (TSX-ABX) is showing as relatively cheap by the historical average.

The infrastructure type utility companies are not cheap. The only utility companies that is showing as cheap, is TransAlta Corp (TSX-TA) which is showing as relatively cheap by the historical average.

Of the Telecom Stocks Shaw Communications Inc. (TSX-SJR.B) and Manitoba Telecom (TSX-MBT) are showing as relatively cheap by the historical average. WiLan Inc. (TSX-WIN) is showing as relatively cheap historically.

On my other blog I am today writing about Crescent Point Energy Corp. (TSX-CPG, OTC-CSCTF)...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, December 1, 2014

Dividend Stocks December 2014

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. See my spreadsheet at dividend growth stocks that I just updated for December 2014.

On this list,
  • I have 13 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 and
  • 39 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list two months ago,
  • I had 10 stocks with a dividend yield higher than the historical high dividend yield,
  • I had 46 stocks with a dividend yield higher than the historical average dividend yield and
  • 41 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 13 have raised their dividends since last month. Dividends raises are denoted in green. They are

Canadian Tire (TSX-CTC.A)
CI Financial (TSX-CIX)
Enbridge Income Fund Holdings Inc. (TSX-ENF)
Equitable Group Inc. (TSX-EQB)
Exchange Income Corp (TSX-EIF)

Gluskin Sheff + Associates Inc. (TSX-GS)
Goodfellow Inc. (TSX-GDL)
Home Capital Group (TSX-HCG)
IGM Financial (TSX-IGM)
Inter Pipeline Fund (TSX-IPL)

Savaria Corporation (TSX-SIS)
Superior Plus Corp. (YTSX-SPB)
Telus (TSX-T)

Also, Stantec Inc. (TSX-STN) has a two for one split occurring since I last updated my spreadsheet.

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) 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 average 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.

However, 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 Stocks . 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 PFB Corp. (TSX-PFB, OTC-PFBOF) ...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.