Tuesday, September 19, 2017

Money Show 2017 - Jaime Purvis

Jaime Purvis spoke in the opening ceremonies on "The Canadian ETF Outlook: What's in Store for ETFs in the New Year". Jaime Purvis is Executive Vice President of Horizons ETFs. Their site is Horizonsetfs.com.

Currently Horizon has Benchmark ETFs, Active ETFs and Beta Pro ETFs. There are new classes of ETFs coming on the market such as new Tech ETFs as well as Marijuana ETFs, Robotics ETFs and Cyber Securities ETFs. ETF companies have a tendency to grow and then consolidate, then grow then consolidate. The Mutual Fund companies will probably also grow and then consolidate. Also US companies are moving into Canada.

Mutual Fund companies are now moving into ETFs. There was the Client Relationship Model 2 (CRM2) where investments firms are required to report all fees that their clients are paying. ETFs are noted for their low fees.

The Mutual Fund companies are still growing but their growth is slower than for ETF companies. ETFs funds have grown by 21% since 2016. The growth in actively managed funds is about 30% of ETFs.

Mutual Fund companies going into ETFs include Mackenzie, CI Investments, Franklin Templeton, AGF, Desjardins and Manulife Investments. They all are known for actively management but they do track the indexes. Funds that track an index are quasi ETFs.

It is interesting that in Colorado when they legalized marijuana, beer sales fell.

There are a lot of indexes in the US. In fact there are more indexes in the US than stocks. A lot of the indexes are flawed. What is working for stocks does not necessarily work for fixed income. The innovation in Canada is the growth of actively managed ETFs. There are some 157 of these ETFs in Canada.

People are now doing covered calls and options using ETFs.

On my other blog I wrote yesterday about Accord Financial Corp (TSX-ACD, OTC- ACCFF)... learn more. Tomorrow, I will write about Telus Corp. (TSX-T, NYSE-TU)... learn more on Wednesday, September 20, 2017around 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, September 14, 2017

Money Show 2017 - Gordon Pape

Gordon Pape spoke in the opening ceremonies on "Where Next? The Outlook for Canada in 2018". He said that for the economy we had
  • 1.1% Growth in GDP in the second quarter of 2017
  • 0.9% First quarter of 2017
  • 1.9% Increase in Household spending
  • 2.3% increase in exports of goods and services
  • 65,700 increase in manufacturing jobs, and
  • 6.3% unemployment, which is the lowest since 2008
Most stock markets have done well so far in 2017 with
  • Hong Kong up by 27.1%
  • India up by 21.2%
  • France up by 14.16%
  • NASDAQ up by 19.4%
  • Dow Jones up by 11.1%
  • S&P500 up by 10.4%, but
  • TSX is down by 0.5%.
The thing is that the US has companies that we do not like Health Care which is up over 17% this year. Canada just does not have the range the US market has. The only strong area in Canada is gold.

There is trouble ahead as strong growth is wanted. In Canada, energy is still in trouble. Our housing market will slow. The NAFTA renegotiation creates uncertainty. Our higher interest rates will hit the Loonie. The overvaluation of the NY market will trigger a sell off.

He thinks that there will be more interest rates rises in Canada this year. He worries about the NY market being really over valued with a P/E Ratio of 24. There is a 10 to 15% correction coming and the TSX will follow.

He says that we should not overweight our portfolio with Canadian stock. We need to diversity internationally. He thinks we should take profits as appropriate and have some cash on hand. It might be good to invest in the EU as their stock markets are undervalues. We could also invest in the Far East. He would stay out of the US market for now.

He would not advise us to bail out of the market entirely. This is never a good idea. No one knows where the markets will go. He has a web site of www.buildingwealth.ca.

On my other blog I wrote yesterday about Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more. Tomorrow, I will write about Just Energy Group Inc. (TSX-JE, NYSE-JE)... learn more on Friday, September 15, 2017 befor 8 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, September 12, 2017

Money Show 2017

I want to start blogging about this show with my overall impression. As usual, they had some very good speakers in the opening ceremonies. Also the speaker line up for Canadian Money Saver magazine was again very good. This series of talks on Saturday is aimed at a general audience and would be fine for investors at all levels.

What I like is that Canadian Banks are returning to this conference. They all left a few years ago. This year CIBC and BMO were there. I miss the TD bank and especially their economic talks. One surprise was the difference in the CIBC speakers. In the opening Benjamin Tal was very, very good. This contrasted with the very boring talk by Si Mokhtari. I would normally found Sid's subject of interest, but the presentation left much to be desired.

Another surprise was the Friday evening talk put on my Keystone Financial Publishing Corp and Ryan Irvine. This was great talk and very informative. Because of this I went to the Saturday talk by Ryan Irvine but this was a mistake. It was just a repeat of the part of the Friday night talk and so I left.

On my other blog I wrote yesterday about High Liner Foods (TSX-HLF, OTC-HLNFF)... learn more. Tomorrow, I will write about Smart REIT (TSX-SRU.UN, OTC-CWYUF)... learn more on Wednesday, September 13, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, September 7, 2017

Something to Buy September 2017

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.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying 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 2017 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.

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 22 stocks in the Consumer Discretionary category. One of these stocks is showing as cheap by the historically high dividend yield and that is Newfoundland Capital Corp (TSX-NCC.A). Nine (or 41%) are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A). Newfoundland Capital Corp (TSX-NCC.A) being cheap by historically high dividend is new.

I follow 12 Consumer Staples stocks. One company is showing as cheap by the historically high dividend yield and that company is Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). Five stocks (or 42%) are showing cheap by historical median dividend yield. These are Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). There is no change from last month.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. 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. None of these stocks are 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); Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. H & R Real Estate Inv. Trust (TSX-HR.UN, OTC-HRUFF) has been deleted from the list.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Five stocks (or 63%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM), National Bank of Canada (TSX-NA, OTC-NTIOF), Royal Bank of Canada (TSX-RY, NYSE-RY) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Royal Bank of Canada (TSX-RY, NYSE-RY) has been added to this list as cheap by historical median dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW). This is the same as last month.

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, NYSE-SLF). There is no change from last month.

I follow 31 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.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are and SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.

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). There is no change from last month.

I have 7 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 57% are showing as cheap by historical median dividend yield. They are 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). Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) is new to this list.

I have 15 Services stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 20% 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). There is no change from last month.

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 14% is showing as cheap by historical median dividend yield and that stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). This is the same as for last month.

I follow 10 Energy stocks. One Stock or (10%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF). There are five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). This is the same as for last month.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). 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. Two stocks (or 25%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF) and Enbridge Inc. (TSX-ENB, NYSE-ENB). This is the same as last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Three stock (or 25%) are showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Emera Inc. (TSX-EMA, OTC-EMRAF). There is no change from last month.

I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Four stocks (or 100%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Quarterhaill Inc. (TSX-QTRH, NASDAQ-QTRH), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change from last month.

The last stock I wrote about was about was Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more. The next stock I will write about will be ATCO Ltd. (TSX-ACO.X, OTC- ACLLF)... learn more on Friday, September 8, 2017 before 8:30 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, September 5, 2017

Dividend Stocks September 2017

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 2017.

On this list,
  • I have 3 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 38 stocks with a dividend yield higher than the historical average dividend yield
  • I have 67 stocks with a dividend yield higher than the historical median dividend yield and
  • 63 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January,
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 36 stocks with a dividend yield higher than the historical average dividend yield
  • I have 66 stocks with a dividend yield higher than the historical median dividend yield and
  • 64 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 $157.56. This month dividends would be $157.04. However this is being reset because of Canam stock being delisted this month. Of the stock that I follow 10 stocks has raised their dividends since last month. Dividends raises are denoted in green.

Badger Daylighting Ltd (TSX-BAD, OTC-BADFF)
Bank of Nova Scotia (TSX-BNS, NYSE-BNS)
Canadian Imperial Bank of Commerce (TSX-CM, NYSE-CM)
Equitable Group Inc. (TSX-EQB, OTC-EQGPF)
Finning International Inc. (TSX-FTT, OTC-FINGF)

Hardwoods Distribution Inc. (TSX-HWD, OTC-HDIUF)
Newfoundland Capital Corp (TSX-NCC.A, TSX-NCC.B)
Royal Bank of Canada (TSX-RY, NYSE-RY)
Saputo Inc. (TSX-SAP; OTC-SAPIF)
Valener Inc. (TSX-VNR, OTC-VNRCF)

Also, of the stocks that I follow, xx stocks decreased or suspended their dividends.

Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 10.3% of the stocks that I follow. Three of these stocks never had dividends, so 8.39% 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 Trigon Metals Inc. (TSX-TM, 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. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

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.

The last stock I wrote about was about was Alimentation Couche-Tard Inc. (TSX-ATD.B, OTC-ANCUF)... learn more. The next stock I will write about will be Exchange Income Corp. (TSX-EIF, OTC-EIFZF)... learn more on Wednesday, September 06, 2017 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. I am on Instagram with #walktoronto.

Thursday, August 31, 2017

Dividend Growth Stocks 2

The thing is that stocks may not be currently growing their dividends now as they did in the past. Times change and the economic conditions for certain stocks can change. So I thought it would be interesting to see for the stocks I talked about Tuesday what the current growth is compared to the growth I had.

In looking at Royal Bank of Canada (TSX-RY, NYSE-RY) I noticed that my dividend growth over the past 22 was at 11.60% per year. However, the dividend growth on this stock over the past 5 and 10 years is lower at 9.00% and 8.93% per year.

For Bank stocks the slowdown has happened since banks had trouble in 2008. There were no increases in 2009 and 2010. There is only one year of 2014 with an increase of 12.20% where the increase was at or above my growth rate of 11.60%.

For SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF) the current dividend growth rates are lower also and the slowdown occurred after 2011. For this stock, the problem was the scandal that occurred in 2012. You can read about this with an article at CBC News.

For SNC-Lavalin Group Inc. my dividends grew at 17.64% per year over the 19 year period I held them. Currently the dividends have growth at 4.36% and 13.24% per year over the past 5 and 10 years. As the sandal was handled by the company, they are doing better and you can see that in the current higher growth in dividends. The last increase was in 2017 and it was for 5%.

For Metro Inc. (TSX-MRU, OTC-MTRAF) the dividend growth is slightly lower. For the 13 years I held this stock I have had a growth rate of 18.63% per year. The current growth rates over the past 5 and 10 years are at 17.30% and 14.52% per year. The last increase was in 2017 and it was for 16.1%

For the Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF) stock that I have held for 17 years, I have an average growth of 13.39% per year. Currently the dividend growth is stronger with the 5 and 10 year growth at 15.90% and 13.30% per year. The last increase was in 2017 and it was for 13%.

For Emera Inc. (TSX-EMA, OTC-EMRAF) during the 12 years I held this stock my dividend growth rate was 9.35% per year. On this stock the current growth rate is slightly lower with 5 and 10 year growth rates at 8.73% and 8.41% per year. The last increase was in 2016 and it was for 10%.

For Canadian Real Estate Investment Trust (TSX-REF.UN, OTC-CRXIF), for the 11 years I held this stock, I have a distribution growth rate of 4.50% per year. Currently, the 10 year growth in distribution is lower and the 5 year growth rate is higher. Currently the 5 and 10 year distribution growth rate is 4.95% and 3.49% per year. The last increase was in 2017 and it was for 2.2%.

For the stock that I follow, when look at 5 and 10 year dividend growth rates, I find that 50% of the stock have 5 year growth higher than the 10 year growth. Some 47% of my stocks have a 5 year growth rate lower than the 10 year rate. Some 3% have the same growth over the past 5 and 10 years.

On my other blog I wrote yesterday about Badger Daylighting Ltd. (TSX-BAD, OTC- BADFF)... learn more. Tomorrow, I will write about Chemtrade Logistics Income Fund (TSX-CHE.UN, OTC-CGIFF)... learn more on Friday, September 1, 2017 before 11am. I have another Friday road trip.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 29, 2017

Dividend Growth Stocks

Why you buy dividend growth stocks is because you can get some really good dividend yields when you hold the stocks for some year. The longer you hold a stock the higher the dividend yield on your stock's purchase price. This is how you win in the stock market.

I bought Royal Bank of Canada (TSX-RY, NYSE-RY) in 1995. On my original purchase, I am making a 47.9% dividend yield. Say I spent $10,000 on this stock on 1995. That means that in the current year I will make $4,790 in dividends after holding this stock for some 22 years. When I bought this stock, I got a 4.27% dividend yield. Of course Canadian Banks are some of the best dividend payer on the TSX.

Another example is Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF). I bought this stock in 2000 so I have had this stock for some 17 years. When I bought this stock it had a 1.79% dividend yield. This year I will earn 11.7% on my original purchase price. So if I paid 10,000 for this stock in 2000, I will get $1.170 in dividends this year. This is a Consumer Discretionary stock.

The next one is a Consumer Staple stock. They tend to have low yields, but good growth. I bought Metro Inc. (TSX-MRU, OTC-MTRAF) in 2004 some 13 years ago. When I bought this stock the dividend yield was 1.87%. This year I am earning 11.04% on my original purchase price. So that means I will get $1,104 in dividends this year.

Another example is SNC-Lavalin Group Inc. (TSX-SNC, OTC-SNCAF) which I bought in 1998 some 19 years ago. When I purchased this stock it had a 2.35% dividend yield. On my original purchase price I am making a yield this year at 32.12%. This means if I had paid $10,000 for this stock, this year I would get $3,212 in dividends.

An example I have of a utility is Emera Inc. (TSX-EMA, OTC-EMRAF). I bought this stock in 2005. They have a good dividend, currently at 4.36% and low growth. When I bought this stock it had a 4.70% dividend yield. The 5 and 10 year dividend growth is at 8.7% and 8.4% per year over the past 5 and 10 years. This year I am earning 11.03% in dividends. So if I invested $10,000 initially, I would get $1,103 in dividends this year after some 12 years.

The examples would not be complete without a REIT. REITS tend to have moderate to good distributions with low distribution growth. I bought Canadian Real Estate Investment Trust (TSX-REF.UN, OTC-CRXIF) in 2006 some 11 years ago. When I bought this stock it had a 4.50% distribution yield. This year I am earning 7.09% on my original investment. This means if I have paid $10,000 for my initial investment I would be earnings $709.00 in distributions this year.

For REITs, do not forget that distributions are not dividends and there are different taxes. In 2016, 1.90% was capital gains, 4.44% was Foreign Business Income, 84.29% was other income (Taxed like interest income) and 9.38% was Return of Capital. You pay no tax on return of capital until your total return of capital equals your stock's purchase price.

Making money in the stock market can take time. You want to start early and get some dividend growth stocks and just let them grow their dividends.

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 August 30, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, August 24, 2017

Stable Economies

As much as everyone seems to like to have a stable economy, there is no such thing unless you want an authoritarian government that will suppress the economic activities of the people. Problem is that economies exist because people do things. So to get a stable economy you cannot let people do things. You limit what they can buy and sell. You limit where and how they live. You limit what they can do and say.

Of course if you suppress people or stop them from doing any economic activity you end up with no economic activity and no economy. This is why communism does not work. Socialism does not work because of the suppression of people, but since they do not suppress everything, it takes longer to fail.

The failure of both communism and socialism is that people will not work hard if they see no benefit for themselves and/or their families. Under both these systems, leaders expected people to work hard to the benefit the whole country. What actually happened is that people did whatever they had to do to survive and that is all they did. (By the way, slaves act the same way.)

The problem with allowing economic activity is that people are unpredictable. The other problem is that they can act like a herd. Think about bear markets. We have them because everyone all of a sudden gets worried about something. A problem could have existed for some time, even for years. However, at one time everyone now worries about it. For the stock market this herd thinking often happens in October or November.

So if you want economic activity you have to allow people the freedom to act. You have to allow them to a great deal of freedom to buy and sell and live as they please. This is what produced the rich Western world.

You, of course, cannot provide total freedom because you would have chaos. There needs to be rules and regulations, but not too many rules and regulations. Capitalism is the same, for it to function properly it needs some rules and regulations. However, if you have too many rules and regulations, you just strangle the economy and capitalism.

On my other blog I wrote yesterday about Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF)... learn more. Tomorrow, I will write about Superior Plus Corp. (TSX-SPB, OTC-SUUIF)... learn more on Friday, August 25, 2017 around 9am.

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 22, 2017

Credit Card Debt is Deadly

And repeat after me: credit card debt is deadly, credit card debt is deadly. There is good debt and bad debt and credit card debt is bad debt. Credit card debt can be disastrous to your financial health. Never make the mistake that you are not spending money when you use your credit card.

I used my credit card all the time. It helps me know how I am spending my money. I find that spending cash, I never know where it goes. However, without fail, I pay off my credit card every month. If you have a big expenditure, get a line of credit. Do not leave big expenditures on your credit card.

I also like the points I get. I have a PC Credit Card and I get points to spend on groceries. However, if you do not pay your credit card off each month, points for anything do you no good. You will pay far more in interest on your credit card than you ever use in points.

On my other blog I wrote yesterday about Evertz Technologies (TSX-ET, OTC-EVTZF)... learn more. Tomorrow, I will write about Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF)... learn more on Wednesday, August 23, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Suzanne's Upcoming Art Exhibit



Opening Reception:
Sunday September 10th. 12 PM - 2 PM

Exhibition Dates:
August 30 - September 26 2017

Place:
Rosedale United Church
159 Roxborough Drive

Suzanne's web site is here

Thursday, August 17, 2017

Liquidity Ratio

A big thing that would bother me about a dividend stock would be very low Liquidity Ratios. If the Liquidity Ratio is lower than 1.00, it means that current assets cannot cover current liabilities. This can cause trouble in the best of times; however it can be devastating if we suddenly go into a bear market then recession.

The Liquidity Ratio is a very easy figure to ascertain. Look for a company's Balance Sheet and divide the current assets by the current liabilities to get this ratio. It is best if this ratio is 1.50 or higher. I generally do not like mucking about with this ratio to get it to a decent number, but sometimes that may be unavoidable. With the best companies this is usually not a problem.

Unfortunately the Liquidity Ratio can get more complex. Some companies, especially utilities rely on cash flow to cover current liabilities. In order the calculate the effect of using cash flow, add to the assets Cash Flow from Operations, less dividends paid. You can find dividends paid are in the Financing Activities section.

Sometimes the Liquidity Ratio is low because debt has come due and there is a large amount of Long Term Debt due in current year under Current Liabilities. First look into the notes on Financial Statements and ensure that the debt is being handled. If this is true, you can subtract the Long Term Debt due in the current year from the current liabilities before you calculate the Liquidity Ratio.

I remember the problem that Teck Resources Ltd (TSX-TECK.B, NYSE-TECK) had when they bought Fording Coal. Their Liquidity Ratio plummeted to 0.44 just as the 2008 recession hit. The stock also plummeted and they had to cut the dividend.

It is not easy to find articles on their problems. However, Gordon Pitts in the Globe and Mail in June 2010 talks about problems that Teck had from this 2008 purchase. Andy Clark on Reuters talks about the problems Teck was having in 2009. There is a discussion on Liquidity Ratios on Investopedia

On my other blog I wrote yesterday about BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY)... learn more. Tomorrow, I will write about ONEX Corp. (TSX-OCX, OTC-ONEXF)... learn more on Friday, August 18, 2017 around 9 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 15, 2017

The West

Western culture seems at this point to be dying. The most important way is that we are not having enough children. This is how cultures and civilizations die. If you stop having children you have no future. In the Western culture we are all about helping the old. We are heavily in debt due to pensions and health care. The most expensive people are old people for both these expenditures.

It was not the baby boomers who started these programs, but the parents of the boomers who did. They got their health care and pensions because there were a lot more boomers. The generations after the boomers are smaller and this is causing a problem.

We are not supporting the youth that we have. Our youth are heavily in debt due to education cost. This is a big problem for our future. Baby boomers protest that we cannot afford to help with higher education costs. Most baby boomers attitude is leave my pension and health care alone at all costs.

And we have some stupid results. I meet at a meetup a young person who had a concession. She was not working because of the effects of this concussion. She was told to get physiotherapy, but she could not afford it. She also could not work because of the concussion. I also know of a 93 year old man who had a brain aneurism and after he did some recovery in the hospital was sent to physiotherapy in a specialized hospital on University. The 93 year old man had everything covered under OHIP.

No, I do not think that OHIP should cover everything. I paid for physiotherapy in the past, but I could also afford to do so. But if you need something like physiotherapy to go back to work, but cannot do that because you cannot afford it we have a system that is dysfunctional.

We also need to do more with funding day care. It may be counter-intuitive, but there is a positive co-relation between the percentage of adult women in the workforce and the birth rate. The higher the proportion of adult women that work the higher the birth rate.

My child is in his thirties. When I was working and he was going to day care, I paid more for day care that I did in rent. It was nothing fancy. It was run by Social Services of Toronto. It did not have to be as expensive as it was. When my child was school age, he was in school most of the day, but the day care had two shifts of full time workers as they covered the children from 8 am to 6 pm. The workers were also covered by a union.

When I asked what the day care workers were doing when children were in school, I was told this was planning time. So from 9 am to 12 am and from 1 pm to 4:30 pm was needed each day for planning? And, the school was complaining that they did not have enough teacher assistant?

The western culture maybe dying, but they are into interesting things. I read Ben Hunt, one of the most interesting writers I have come across. His latest missive is here. In his covering email he talked about a recent post on AI BS Detectors & the Origins of Life by Neville Crawley. This lead me to an article in Quanta Magazine byNatalie Wolchover for an article called "First Support for a Physics Theory of Life".

One problem we have in the West is that a lot of the people having babies do not believe in evolution. So will the best in Western thought die with the Western culture?

On my other blog I wrote yesterday about EnerCare Inc. (TSX-ECI, OTC-CSUWF)... learn more. Tomorrow, I will write about BlackBerry Ltd. (TSX-BB, NASDAQ-BBRY)... learn more on Wednesday, August 16, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, August 10, 2017

Volatility

If you are a conservative investor and you are worried about volatility, you may be looking at the wrong information. You should only be in stocks that pay dividends and in little or no resource stock. You should not be looking at the value of your portfolio, but only the income it produces. Your income should, at all times be stable or increasing.

Most of the volatility of stock price has nothing to do with your dividend stock's company value and everything to do with the general feeling towards stocks. Most dividend paying stocks are relatively stable over time if you view them from dividend paying point of view. Most dividend paying stocks produce stable and growing dividends over time.

In every bear market there are stocks that cut or suspend their dividends. There are also ones that keep them stable and others that increase their dividends. If you have a diversified portfolio of dividend paying stocks bear markets should not affect the ability of your portfolio to produce dividends. In bear markets my portfolio has lower dividend increases and that is all.

If a stock cuts or suspense the dividend it is time to take a look at that stock to decide if it is one you want to continue to hold. If you are holding stocks for the very long term as I do, it is not surprising that there will be difficulties every once in a while. The question to ask is: Is the company behaving responsibly? Cutting or suspending a dividend maybe the responsible thing to do for the company for the long term future.

On my other blog I wrote yesterday about Loblaw Companies Ltd. (TSX-L, OTC-LBLCF)... learn more. Tomorrow, I will write about Newfoundland Capital Corp. (TSX-NCC, OTC-none)... learn more on Friday, August 11, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 8, 2017

Dividend Changes

Since I started to publish dividend increase and decreased in 2014, The month of August 2017 is the first month to have no activity.

# Mths 2017 2017 2016 2016 2015 2015 2014 2014 Med Med
Incr Decr Incr Decr Incr Decr Incr Decr Incr Decr
1 Jan 5 1 4 0 4 0 4.0 0.0
2 Feb 10 0 5 2 8 0 14 0 9.0 0.0
3 Mar 23 0 18 6 19 3 15 1 18.5 2.0
4 Apr 10 2 8 4 9 3 14 0 9.5 2.5
5 May 5 0 3 2 6 1 7 1 5.5 1.0
6 Jun 13 0 18 0 14 1 14 1 14.0 0.5
7 Jul 4 1 3 1 6 1 3 0 3.5 1.0
8 Aug 0 0 4 0 4 2 9 0 4.0 0.0
9 Sep 7 1 7 3 9 0 7.0 1.0
10 Oct 1 1 1 1 1.0 1.0
11 Nov 6 0 4 1 5.0 0.5
12 Dec 12 0 13 2 13 0 13.0 0.0
Tot 70 4 88 16 95 18 99 4 94.0 9.5
154 45% 3% 57% 10% 62% 12% 64% 3% 61% 6%


So far this year, we have more increases and less decreases than at this point last year. In 2016 at this point we have 63 stocks with increases and 15 with decreases. So far this year we have 70 stocks with increases and only 4 with decreases.

# Mths 2017 2017 2016 2016 2015 2015 2014 2014 Med Med
Incr Decr Incr Decr Incr Decr Incr Decr Incr Decr
1 Jan 5 1 4 0 4 0 4.0 0.0
2 Feb 10 0 5 2 8 0 14 0 9.0 0.0
3 Mar 23 0 18 6 19 3 15 1 18.5 2.0
4 Apr 10 2 8 4 9 3 14 0 9.5 2.5
5 May 5 0 3 2 6 1 7 1 5.5 1.0
6 Jun 13 0 18 0 14 1 14 1 14.0 0.5
7 Jul 4 1 3 1 6 1 3 0 3.5 1.0
8 Aug 0 0 4 0 4 2 9 0 4.0 0.0
Tot 70 4 63 15 70 11 76 3 68.0 7.0
154 45% 3% 41% 10% 45% 7% 49% 2% 44% 5%


I must admit that in the past when I have updated my spreadsheets on my own stock portfolio there were months with no activity. My updates for my stocks are when dividends are paid. The above tables are based on when dividends are declared.

On my other blog I wrote today about Ballard Power Systems Inc. (TSX-BLDP, NASDAQ-BLDP)... learn more. Tomorrow, I will write about Loblaw Companies Ltd. (TSX-L, OTC-LBLCF)... learn more on Wednesday, August 9, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Friday, August 4, 2017

Something to Buy August 2017

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.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying 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 August 2017 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.

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 22 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Nine (or 41%) are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A). There is no change from last month

I follow 12 Consumer Staples stocks. One company is showing as cheap by the historically high dividend yield and that company is Empire Company Ltd (TSX-EMP.A, OTC-EMLAF). Five stocks (or 42%) are showing cheap by historical median dividend yield. These are Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). Empire Company Ltd (TSX-EMP.A, OTC-EMLAF) is now cheap by historically high dividend yield and Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF) and Metro Inc. (TSX-MRU, OTC-MTRAF) are now cheap by historical median dividend yield.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. 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. None of these stocks are 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); Granite Real Estate (TSX-GRT.UN) H & R Real Estate Inv. Trust (TSX-HR.UN, OTC-HRUFF) and Melcor Developments Inc. (TSX-MRD. H & R Real Estate Inv. Trust (TSX-HR.UN, OTC-HRUFF) has been added to the list.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 50%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM), National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) is back on this list as cheap by historical median dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW). This is the same as last month.

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, NYSE-SLF). There is no change from last month.

I follow 31 Industrial stocks. Canam Group Inc. (TSX-CAM, OTC-CNMGA) has gone private and has been removed from the TSX. 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.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are and SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.

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). There is no change from last month.

I have 7 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 42% are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF) and PFB Corp (TSX-PFB, OTC-PFBOF). Canam Group Inc. (TSX-CAM, OTC-CNMGA) has been removed from this list.

I have 15 Services stocks. None are showing as cheap by the historically high dividend yield. Three stocks or 20% 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). There is no change from last month.

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 14% is showing as cheap by historical median dividend yield and that stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). This is the same as for last month.

I follow 10 Energy stocks. One Stock or (10%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF). There are five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). Last month it was Suncor Energy (TSX-SU, NYSE-SU) showing as cheap by the historical high dividend yield.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). 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. Two stocks (or 25%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF) and Enbridge Inc. (TSX-ENB, NYSE-ENB). This is the same as last month.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Three stock (or 25%) are showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF) and Emera Inc. (TSX-EMA, OTC-EMRAF). There is no change from last month.

I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Four stocks (or 100%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Quarterhaill Inc. (TSX-QTRH, NASDAQ-QTRH), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change from last month.

On my other blog I wrote yesterday about TECSYS Inc. (TSX-TCS, OTC-TCYSF)... learn more. Tomorrow, I will write about Savaria Corporation (TSX-SIS, OTC-SISXF)... learn more on Friday, August 4, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, August 1, 2017

Dividend Stocks August 2017

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 August 2017.

On this list,
  • I have 2 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 36 stocks with a dividend yield higher than the historical average dividend yield
  • I have 66 stocks with a dividend yield higher than the historical median dividend yield and
  • 64 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January,
  • I have 1 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 36 stocks with a dividend yield higher than the historical average dividend yield
  • I have 64 stocks with a dividend yield higher than the historical median dividend yield and
  • 61 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 $157.56. This month dividends would be $157.04. However this is being reset because of Canam stock being delisted this month. Of the stock that I follow 0 stocks has raised their dividends since last month. Dividends raises are denoted in green.

Also, of the stocks that I follow, 0 stocks decreased or suspended their dividends.

Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN). This stock started to trade on the NYSE as AQN on November 24, 2016. I have updated my records. It used to have an OTC symbol of AQINF. I should have brought this fact up last month.

Canam Group Inc. (TSX-CAM, OTC-CNMGA) which was an industrial in manufacturing has been taken private and delisted from the TSX. The press release on this is here. There is a new release on Cision. Nicolas Van Praet talks about this in a Globe and Mail article. It is interesting that the company switch from a listing on the TSX to go with a private equity firm American Industrial Partners.

Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 10.3% of the stocks that I follow. Three of these stocks never had dividends, so 8.39% 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 Trigon Metals Inc. (TSX-TM, OTC-PNTZF) (that used to be 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. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.

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 yesterday about Pulse Seismic Inc. (TSX-PSD, OTC- PLSDF)... learn more. Tomorrow, I will write about TECSYS Inc. (TSX-TCS, OTC-TCYSF)... learn more on Wednesday, August 2, 2017 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. I am on Instagram with #walktoronto.

Thursday, July 27, 2017

Diversification

The question is how much diversification do you need? If you are just starting out and have a few thousand dollars, one stock is enough. When you have at least $10,000 you should have 3 stocks in difference sectors, like Financial, Utility and REIT. When you build your portfolio to another $10,000 you should be looking to diversify into another stock.

It is important to have stocks in different sectors. The TSX divides the TSX stocks into sectors of:

Sector Example 1 Example 2
Consumer Discretionary Dollarama Inc. EnerCare Inc.
Consumer Staples Jean Coutu Group Inc. Loblaw Companies Ltd
Energy ARC Resources Ltd. Imperial Oil Limited
Financial Bank of Montreal Manulife Financial Corp
Health Care Chartwell Retirement Res. Valeant Pharmaceuticals
Industrials Canadian National Railway Finning International Inc.
Information Technology BlackBerry Ltd Computer Modelling Group Ltd.
Materials Barrick Gold Corp Franco-Nevada Corp
Real Estate Brookfield Property Partners L.P. First Capital Realty Inc.
Telecommunications BCE Inc. Rogers Communications Inc.
Utilities Fortis Inc. Superior Plus Corp.


The Investment report divides their stocks into the following sectors:

Sector Example 1 Example 2
Manufacturing PPG Industries Magna International Inc
Resources Teck Resources Ltd Imperial Oil Ltd
Consumer Jean Coutu Group Inc Shaw Communications
Financial Bank of Montreal Manulife Financial Corp
Utility TransCanada Corp BCE Inc


There are theories about maximum diversification that you should do. Some hold a portfolio does not need more than 15 stocks and some say 20. But it is important to cover different sorts of companies because in different economic climates, sectors can act differently. You want to limit your exposure to any one type of asset or risk.

The sectors act differently in different parts of the economic cycle. An illustration can be seen on Bay Street. For today, some sectors are going up and some are going down. There is a good article on the Business Cycle or Economic Cycle and Investing at Wall Street Survivor.

When you are starting off and if you are a conservative investor use the Beta Ratio to help in picking stocks. Pick stocks that have a Beta Ratio of around or below 1.00. Basically this measures volatility against the TSX, so if the Beta Ratio is 1.00 it is just a volatile as the TSX. Your first stocks should have a low Beta. Also, I would not buy any in the Resources or Materials sectors as they are higher risk.

On my other blog I wrote yesterday about Obsidian Energy Ltd TSX-OBE, NYSE-OBE)... learn more. Tomorrow, I will write about Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF)... learn more on Friday, July 28, 2017 around 9 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Tuesday, July 25, 2017

Home Capital Group

Because I had bought some TD stock in 2009 and have made a lot of money on it, I sold some and bought some Home Capital Group on 6 March 2017 at $25.96 per share. The company had wobbled a bit when the company announced in February 2017 that it received an enforcement notice from staff of the Ontario Securities Commission.

It basically fell off a cliff in mid-March after the company reported several of its current and former executives have been served with enforcement notices from the Ontario Securities Commission over the company’s disclosure of its investigation into fraudulent mortgage documents. It hit a low of $5.85 in May 2017. This notice basically set up a run on this bank. On its way down I bought some more shares at $6.85 each and that would give me an ACB of $22.14.

The stock hit a high of $19 when Warren Buffet rode to its rescue in June 2017. It headed south again after the announcement and now resides at $14.00 plus.

At its lowest point I would have lost some 73.6% of my investment. At $19.00, my loss would have been around 14%. With today’s prices I am down some 36%. Currently analysts’ 12 month stock price ranges from $23.00 (gain of 3.9%) or a low of $12.13 (a loss of 45%) to an average of $17.69 (a loss of 20%).

I need to decide what to do with this. I will take my time and think about it. If I had panicked in May, I would have loss considerable more than I will currently lose. The thing with financials is that you can earn a lot of money investing in them but they are subject to runs. People can panic and pull out money. Banks and Financials are really confidence plays.

On my other blog I wrote yesterday about Lassonde Industries Inc. (TSX-LAS.A, OTC-LSDAF)... learn more. Tomorrow, I will write about Obsidian Energy Ltd TSX-OBE, NYSE-OBE)... learn more on Wednesday, July 26, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

Thursday, July 20, 2017

Canadian Banks

This is a great article on Canadian Banks by 5iResearch. It gives lots of great reasons why Canadian bank stocks should be part of every Canadian stock portfolio.

The Canadian banks would not make the US dividend achievers list because they have not grown their dividends for the past 10 years because they all stopped increases because of the 2008 crisis. However, they do have a very long history of dividends and dividend growth.

The banks are now on back on the Canadian Dividend Aristocrats because in Canada we have lower standards for our lists. For the Canadian Dividend Aristocrats list a company need only increase the dividends for the past 5 years.

The reason we have lower standards on dividend achievers is that there are far fewer stocks in Canada than in the US. We do have companies that have increased their dividends for the past 10 or even 25 years, but our lists are very short.

On my other blog I wrote yesterday about Atlantic Power Corp (TSX-ATP, NYSE-AT)... learn more. Tomorrow, I will write about Alaris Royalty Corp (TSX-AD, OTC-ALARF)... learn more on Friday, July 21, 2017 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.