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The Best Canadian Dividend Stocks 2014 – Dividend Achievers List





Top Canadian Dividend Stocks

After reading Derek Fosters book, my interest in researching strong Canadian dividend paying stocks has increased. I already own quite a few dividend payers in my portfolio, but I thought I would share with you some of the stronger dividend paying stocks around Canada.

One great source of strong dividend companies is Mergent’s Canadian Dividend & Income Achievers List. The Claymore Dividend & Income Achievers ETF (CDZ) replicates the Mergent list. Here is an excerpt from the Claymore site that describes CDZ:

The Claymore CDN Dividend & Income Achievers ETF has been designed to replicate the performance of the Mergent’s Canadian Dividend & Income Achievers Index. Mergent’s Canadian Dividend & Income Achievers Index consists of some of the issuers in Mergent’s Canadian Dividend Achievers (70%) and a group of Income Trusts and real estate investment trust (REITs) (30%). The weighting methodology is modified yield weighted.

Since 1979, Mergent has identified, on a yearly basis, companies with a stream of dividend payment increases, the “Dividend Achievers.” The index seeks to identify and select a diversified group of dividend and distribution paying companies which have consistently increased their annual dividends and payments to shareholders. The index represents a diversified portfolio of leading high yield equity securities in Canada weighted based on yield and quality and selected by Mergent using a rules-based methodology including consistent growth of dividend and distribution payments.

I always find it helpful to take a look at ETF lists to get some stock ideas. If you are not comfortable buying individual stocks, why not buy the ETF itself and own ALL of the strong Canadian dividend paying stocks for a management fee (0.60%)?

Personally, I’m not completely comfortable with income trusts as most of them pay out more in dividends than they earn. Even if they increase their dividends every year, I’m still cautious over them.

If you’re too busy to check out the iShares site for yourself, here is a list of their top holdings (Feb 2014):

Company Symbol
Exchange Income Corp EIF
Bird Construction BDT
AGF Management AGF.B
Enbridge Income Fund ENF
Northern Property REIT NPR.U
Emera EMA
Bell BCE
Wi-LAN WIN
Laurentian Bank LB
Shaw Communications SJR.B
Corus Entertainment CJR.B
Transcanada Corporation TRP
Keyera Corp KEY
Rogers Communications RCI.B
Telus T
IGM Financial IGM
Fortis FTS
Canadian Real Estate Investment Trust REF.U
Gluskin Sheff GS
Genworth MI Canada MIC
Evertz Technologies ET
Bank of Nova Scotia BNS
Toronto Dominion Bank TD
Thompson Reuters TRI
Transcontinental Inc TCL.A
Dorel Industries DII.B
Rogers Communications RCI.B
Major Drilling Group MDI
Ensign Energy Services ESI
Enbridge Inc ENB
Computer Modelling Group CMG
Cineplex CGX
Pason Systems PSI
Canadian Utilities CU

There are quite a few dividend payers in Canada, but the ones listed above have increased their payouts at least once / year for the past 10 years 5 years (thanks Edwin). What I regularly do is keep a watching the dividend payers for dips in their stock price. If you take a look at the list above, it is apparent that a lot of banks seem to currently have lower yields historically speaking.

Also note that it’s best to keep your costs as low as possible when buying stocks, check out my review of Canadian Discount Brokers and a review of Million Dollar Journey Reader Favorite, Questrade.

Interested in doing a little technical analysis on dividend stocks that you are interested in?  Here’s the free trend analysis tool that I use.  Simply enter the stock symbol and they will email you a printed report.

Stay tuned for tomorrows article with a list of strong American dividend paying stocks.

More Canadian Dividend Stocks Investing Info:

Disclaimer: I own some of the stocks listed in this article. The stocks listed in this article are not stock recommendations, buy at your own risk.





99 Comments, Comment or Ping

  1. 1. Investoid

    Good post – I’m a big fan of the financials in particular (especially National and Scotia). A lot of the ‘retire early’ books I’ve perused seem to have used a dividend stock strategy to build a sizable nest egg relatively quickly.

  2. just a caveat about american dividends or international dividends for that matter. They are taxes the same as interest income is in this country. It might be prudent to leave high dividend yielding american stocks in an RRSP :) Just food for thought.

  3. This is a very useful post and one that I plan to come back to when I am ready to make some investment decisions. I find your blog is often very helpful because of its level of detail and research. Keep up the good work!

    money diva

  4. CAD$: Already covered in the next post, thanks.

    Diva: Thanks for stopping by! I visited your blog the other day, and I must say congrats on building your net worth to a high level @ a young age.

  5. 6. Marc

    how do you purchase individual stocks or etf’s when you’re using the SM and your princ is around 500 bucks….. is that feasable to pay the trading fee once a month? maybe a dividend mutual fund with low mer would do the same trick without the high commissions

  6. love this blog! it’s a great tool for a new inverstor as myself. I will be visiting this site daily when possible. I’m just learing all about stokcs and am excited to get into this field of finances. although I am really excited to “jump in” I will not do so without properly educating myself first. I feel ths blog site will do just that for me aside from having read David Fosters books and recomendations of books.

    question… why would an inverstor want to purchase “common” stock or shares if the “perferred” stoks or shares give more of a guarntee with dividends and/or optios of attining assets if the compnay liquidates or goes bankrupt?

    I understand that common stock will yeild more profit IF the compnay shres do well in trading, but what other factors are in favour of attaining a common stock?

    I would like to thak you in advance for yourtime and help with my question. again, keep up the outstanding work with this blog. I see many, many persons are using this site as a tool and educating themselves.

  7. FBBI, you could trade preferred shares, but generally speaking, people trade preferred shares for income. Common stock gives the investor the potential for capital gain which is also cheaper from a tax standpoint.

  8. 10. Chamilton

    Hi there – I’m new to investing after reading Derek Foster’s book. I was wondering if there is a good website to purchase Canadian dividend paying stocks? I would like to do my best to avoid unnecessary fees and not be the middle man.

    Thnx.

  9. Chamilton, check out this review that I wrote on Canadian discount brokerages:
    http://www.milliondollarjourney.com/review-canadian-discount-brokerages.htm

    Let me know if you have any questions.

    FT

  10. 12. Chamilton

    Thank you FT!

  11. 15. Eva

    I started trading after reading Derek Foster’ s book as well. I checked the stocks the above and I have to say in my eyes that it is extremely expensive stock and paying small dividends compare to price. Just for comparison FRO (Frontline tanker) cost up/down $43 and paying $8.00 in dividends compare to any of the above similar price but just tenth of dividends. Further Strongco I cost $5.60 and paying dividends $1.20 or Transforce cost $7.53 and dividends are $1.59 per stock? I will appreciate all your opinion or discussion
    Eva

  12. 16. Mr.T.

    Consider some other dividend paying stocks, at today’s prices, yields are:

    COS.UN 7.2%
    CCI 5.1%
    PPL 9.7%
    MBT 6.7%
    NAE.UN 14.4%
    CIX.UN 8.4%
    XRE 5.8%
    PBI.UN 8.5%

    Disclaimer: All of the above been featured on BNN TV, with favourable ratings and comments. I do have small holdings in each.

  13. 17. Eva-novice

    So far the best I find out the FRO
    As well Mackenzie but they are not selling every day, but per stock is $1.91 or up and dividends are $0.81
    I like stocks you can buy for +-$10.00 paying over a dollar in dividends, compare to banks where the stocks cost over $40 paying the same in dividends as the stock for $10.00
    Active Energy cost 9.49 div. $1.32
    Bear Stearns – did you buy some stocks when it came on the market for $4.00 paying $1.28 in div.
    Direct Cash cost $10.50 div. $1.38
    PDM Royal cost $9.24 div $1.44
    I appreciate any comment or your point of view from all of you

  14. 18. sue

    Eva-novice,

    Can you advise ticker symbol for Mackenzie? I cannot locate a Mackenzie stock for $1.91 – was that a typo? Thanks in advance!

  15. 19. Eva-novice

    Hello Sue
    Mackenzie Master Limited Partnership(symbol MKZ.UN). This partnership pays out a distribution annually, usually in January for the previous year. The amount that was paid out for the year 2007 was $.81 per unit and investors would have received this in the first couple of weeks in January 2008.
    Cost per share is $1.91 or up
    Eva-Novice

  16. 20. JR

    If I may, I have personal investing experience with FRO, currently dividends $8.00

    This one is volatile, so how do you protect on the swings?

    Last spring when the stock was around $30, I optioned it long & deep in the money at $20. the option money paid me $10.50, I collected 2 dividends totalling I believe it was $3. I also took the $10 from the option (since it was a covered call) & bought more stock, optioning it again.

    Nice ROI is FRO when played right.

    On MKZ … careful since its a partnership unit, they are simply paying you back what you put in.

    My idea on MKZ would be mid way between the dispursement when the stock is low, to purchase the stock, and right at the time they announce the call date and pay out of the next dispursement … sell the stock and take the .10-15% profit. That ain’t bad for 6-weeks work

    another example and there are many, is good old GM. Stock finished today 4/14/2008 at $19.00. The January 09 $10 call contract is paying $10. That would give you $1.00 in pocket, $9 protection on the downside and it also pays a dividend …. even if you got only $0.50 on the dividend… or if you were called on the $10 contract, your up 10 points anyhow,

    ABK is another example … there are sooooo many

  17. 21. JR

    PGF.UN, why not go to the big boards and do the US listing PGH, at least they’re optionable, giving yourself protection on the swings… Do I sound like I’m blowing hot air!

    Has anyone ever wondered about the banks and the crappy 3-5% dividends?

    I can only imagine if one of us on here was in charge of one of the big banks, if it would be possible to easily (smooth as silk) maipulate the stock, the dividends and the price.Simply have the market maker do it for you lol

    I’m not saying they do it (but), suppose the bank buys 5% of its own stock, pays itself a dividend (thanks to its customers) or would (never say never) option its own stock deep in the money … my conspiracy theory on this makes me wonder if those stocks that pay dividends, whether those companies inside or outside do just a little manipulation ermmm!

  18. 22. Eva-novice

    Hello JR
    Thank you, I as a novice need more explanation. ABK is Ambac Financial and GM General Motors, I checked total return for last xxx period and all is in minus. Does it mean something in your decision to invest? And I am not sure if I understand what you saying about GM in January 2008 their stock cost $10 and today $19 and what do you mean by “That would give you $1.00 in pocket, $9 protection on the downside and it also…” My understanding is that you trying to buy when the price is cheap and sells if price is up? Thank you in advance for further explanation P.S.yes as to FRO, buy it when the price is low
    Eva-Novice

  19. 23. Eva-novice

    JR, as to MKZ.UN do I understand correctly, if to buy MKZ than buy it a few month before the year end, received the dividends and sell the stocks? if the price is favorable?
    Eva-Novice

  20. 24. JR

    eva, no thats not what I said.

    Simply if you look at the performance of the partnership units MKZ in this case, when it pays its dividend the stocks drops.

    Doesn’t MKZ dividend every calendar quarter?

    Also you will notice between didvidend dates the stock has a tendancy to hit a low point, then picks up just before or when the dividend amount and call date is announced.

    My way would be to buy it between the dividend dates, and sell it when the call date is announced. I would not hang around for the dividened, because traditionally (look at the charts) the stock drops rapidly after the dividend.

    BTW, I have not looked at the Mackenzie funds to closely sincee MKA expired to zero just like MKZ will soon

    Funny when you look at stocks that dividend they generally pick up close to the dividend call date, so could this be an opportunity to buy the stock and sell it for 10% or whatever profit at the call date

  21. 25. Eva-novice

    JR, yes PGH I bought some stocks a while ago. Did somebody buy Opel international, Garneau and Petrowest PRW.UN all 3 stock no dividends (except Petrowest, but they stoped until further decision) going finally up and up….perhaps good investment with option to sell it when the price 3 pled or so?
    Eva-Novice

  22. 26. Eva-novice

    No, they pay annually only. And I am not sure if than you have to have the stock for the whole year to get the dividends? Or is sit enough to keep them for a few month?
    Eva-Novice

  23. 27. JR

    eva, the point that I made on GM, ABK and FRO was to get a dividend, protect on the downside (downslide) and take some premium on the option money.

    If you were to take a financial advisors advice and go with stocks or mutual funds that pay dispursements or dividends, I would almost … putting my neck on the line here, that they would have no answer for when one of their suggestions started to fall.

    I was just trying to make a simple point about protecting an investment using options, sounds complicated, but those around the boards that have stock & do covered deep in the money calls will understand.

    Honestly, I’m not being a smart arse or trying to confuse you

    Playing straight options is not for the faint of heart, big money to be made and lost. The pro’s can and do do it with OPM, not a red cent of their own money.

  24. 28. JR

    eva MKZ is yearly .. well, all the better.

    Look 1-3 months before dividend call date, and if you think the thing will blip around dividend time, why not profit from the upswing, after all (needs qualification here) doesn’t the darn thing drop by the same amount as the dividend pay out right after the shareholder of record date?

  25. 29. JR

    stock trading is a crap shoot, no different than betting on a horse or casino tables… just legalized gambling

    Are there any experts here in stock trading?

    If you’re on the inside, thats as close as you will get to it

    Books and books on the subject, bollinger bands, stochastic modelling, Fibonacci, RSI, MACD, candles, delta, gamma, vega … its all greek .. right.

    The markets are as predictable as the weather and its anyones guess what the S&P or DJI will be nine months from now.

    Should the US elections go one way or the other, the world will still continue to turn.

    Venting a little tonight, sorry

  26. 30. Eva-novice

    Hello JR, how do you feel today after yesterday spleen?
    I am not sure if you will spend more time with me as a novice but can you explain what you mean by…

    take some premium on the option money.

    Eva-Novice

  27. 31. JR

    I have only been on here about one week and was not planning on posting much. .

    Eva, I am not too good at chat or blogs or even giving anyone any advice.. My way is my way, not someone elses.

    I also do not know if somewhere on MDJ whether stock and option trading has been covered.

    thanks for considering me to give you some info on options, but sorry, I cant explain anything, I can only suggest that you consult others, or google optioning terminology and option strategies, maybe even read a book or take a seminar or course on the topic

    Longs, shorts, calls, puts, covered, uncovered, naked, spreads, straggles, strangles, condors, butterflys, calendars, credit spreads, debit spreads, in-the-money, out-of-the money, at-the-money… like I said, its all greek to me and best left to the pro’s and those that can sleep at night.

    Last point eva, did you check and see what happens to the underlying stock price of those partnership units after the dividend is paid. And what about the option money that could have been made in day trading on ABK today.

  28. 32. Eva-novice

    JR, Thank you even dough you trying to be a humorous. English is my second or 4th? Language, I am from Europe. No I am not planning to take any course, as Derek Foster said in his latest book, I am learning myself. Thank you
    Eva-Novice

  29. 33. JR

    Eva, you top me in English any day.

    Wealth strategies are personal, and kinda like having having a sixth sense.

    Its like having only one handful of investments, stocks whatever (in the left hand of course, since I’m right handed), that leaves the right hand to manouvre, drink coffee, cig, drive a car, turn the pages of a book, even type a keyboard. If everything is tied up with no hands free … you’re in big trouble

    Eva, would you care to share your investment strategies and money making ideas with us

  30. 34. Eva-novice

    JR, No I would not, but I think that you teasing me, or making fun of me? Saying “sharing ideas WITH US”

  31. 35. JR

    eva, no I’m being real serious.

    I posted several long post on the “Retiring early conclusions” part 3 thread. That was my MDJ

    In case you haven’t read it, take a look. I call a spade a spade, I dont play mind games, and when I ask a question, its because I’m interested or dont know the answer.

    I said last night, I dont play smart arse

  32. 36. Eva-novice

    JR
    It is difficult to communicate through this site, (time consuming, you know what I mean, it is not like a regular e-mail) anyway, my day is over today for me (as to work) but I will read your comments and will be back tomorrow.
    Eva-Novice

  33. 37. WarMedia

    YLO.UN.TO is paying more than 10% and its not on your list!!

  34. 38. JR

    Yellow pages on the TSX … not a bad choice. Well done WarMedia

  35. War, in order to make the dividends achievers list, the company must have increased their div at least once/year over the past 5 yrs.

  36. 40. Eva-novice

    I believe in solar energy. After half day research I find 4 stocks which might take your attention?
    AKNS
    Xsunx
    SOPW
    CSKH
    What do you think of those companies?
    Thank you in advance for any opinion
    Eva-Novice

  37. 41. JR

    Eva, where have you been, I have missed you posting.

    Let me look at the present offerings

    AKNS
    Xsunx
    SOPW
    CSKH

    and get back to you

  38. 42. Eva-novice

    I am still here JR, sitting on my chair and hopping to make a fortune?
    Eva-Novice

  39. 43. JR

    Renewable resources and alternative energy solutions … a good choice, with the cost of fuel and energy these days, it has possibilites to go with the type of selections you have noted.

    However, penny stocks on the OTC, BB, Pink sheets, non of these are my kind of stocks.

    AKNS on Nasdaq is way off its high, has no earnings nor any dividends.

    I thought that this was suppose to be a Canadian dividend achievers thread, not a penny stock, or ‘what about this stock’ thread.

    Eva, if you are interested in green energy, take alook at stocks in that sector that have low P/E, some positive EPS, liquidity (good volume-or at least over 0ne-million per day traded) and most definitely must have options & dividends.

    Big boards for me, not Canada, but to each their own pickings

  40. 44. Eva-novice

    JR, I do have 2 portfolios, one is my RRSP, where I have combination of reputable US and Canadians companies paying dividends and good potential for future. Combined with DRIPS and Optional purchase plan. I am not gambling there. Than I have my second account where I am trying to pick some potential penny stock company and sell it when it’s doubling. Those mentioned above belongs to here. What do you thing now?

  41. 45. Eva-novice

    for example, I bought Opel international 0.88 per stock. Selling now arround 1.56 no dividends, but I am detting double back. I mentioned already I know that Garneau has a good future as well, all I have to do is to wait. But they just signed a good contract. I will go up, as PRW.UN I bought for 0.95…etc
    Eva-Novice

  42. 46. Eva-novice

    I meant what do you think???
    Eva-novice

  43. 47. Eva-novice

    sorry for some typos
    I meant what do you think???
    Eva-novice

  44. 48. JR

    Eva, I have no problems with play money, thats money you can afford to lose.

    Old hat thinking on penny stocks … is be prepard to lose it all, and to pick a percentage gain that meets your objectives, then cash in

    For example Opel at $0.88 now a double. Was your intention to wait for $2, or let it move around until it dropped and say … I should have sold when it was $xxxx?

    Alternate approach on a double is to sell half & leave the rest at zero cost to you until it doubles again (repeat), and move on & invest in something else.

    Then there is the 10% or whatever percent gain and out

    Then you have penny traders that will buy a bit every day to cost average

    At some point the name of the game is to take profits

  45. 49. WarMedia

    sry frugal didnt read this part :D but still a good investment… dividend each 30-31 of the month (0.094) for now

  46. 50. Eva-novice

    Hello JR
    BioShaft Water Technology (BSHF) announced a stunning $56 million contract stating “…its patented technology…has been selected as the sole provider of 13 domestic wastewater treatment plants in the municipality of Baghdad in Iraq.”

    did you buy the stock already? I did. As to OPEL, not I am not waiting to get 2.00, would be nice, but to wait for it? Than the time is not paid, right away reinvest in some other potencial stock. In my list yesterday I forget to mentioned EQS stock – by the way paying dividends goes up, as well, they are involved in new contract.
    best regards
    from Eva-Novice

  47. 51. JR

    Eva:

    Equus (EQS) stock, ermm, 9% ($0.60 dividend) based on current price. low volume, nice EPS, with a dividend policy in place of 10%

    Bioshaft (BHSF) like I said previously, I’m not a penny stock person, nor do I like stocks with low volume, no EPS or OTC, BB or pink sheets. No comment on either of these, all I can say is good luck and trust you know when to take profits

    Opel. did you cash out?

  48. 52. Eva-novice

    JR
    OPEL, I am in possetion of it yet, but soon I am selling
    Eva-Novice

  49. 53. Eva Bell

    Hello JR.
    Although you said you are not advising anybody, how ever would you share your opinion on Petrowest Energy? I can not decide if sell it or keep it.
    Bye the way, Bioshaft and Kodiak are doing well, I know pennies stock, but I bought it to make some money for some other valuable stock.
    Thank you
    Eva-Novice

  50. 54. JR

    PRW-UN.TO, quite a tumble

    No opinion, except it has low volume and appears to have some financial difficulties.

    I do hope that you bought it at its low of $0.70 and sold at $1.50?

  51. 55. Eva Bell

    close, I bought for 0.95, a few days after they decided not to pay dividends until further decision, I am having it for a few months now made extra over $600.00, so therefore I can say I got my dividends already and more…I thinking to sell it and buy stock paying regular dividends. I need a logical hint???
    Eva-Novice

  52. 56. JR

    my take as I have said before, is to pick a % profit number and exit.

    Or take out your initial investment and let the profit ride

    All the same Eva, you have good paper profit on this equity, that does not become real profit till you cash it in

  53. 57. Robert Hof

    What has this become? A stock tip board?

  54. 58. Dreos

    HTE.UN
    Harvest energy trust $20-$30per share. $0.30 cents dividend per share monthly. The best I’ve found so far.

  55. 59. Chinstrap

    HTE.UN is a levered play on crack spreads. Crack spreads are starting to widen again after getting squeezed initially by high crude oil, low refined spreads..

    My 2 cents for what I believe is the typical MDJ reader is SDT.UN, which is a closed end income trust fund run by Sentry Select. It has a diversified portflio run by a reputable manager and owns a lot of the solid trusts. Moreover, it is trading at a discount to its NAV as many closed end trusts do and yielding 12% (paid monthly).

    For those doing SM or don’t have a mortgage, one could put in $100,000 and get paid $1000 a month. Say you borrow at 6%, that costs $500 a month for a net $500 a month payout…

  56. 60. Eva Bell

    to Dreos
    Are you kidding?
    Eva-Novice

  57. 61. Dreos

    Eva, why would I be kidding? Do you have a better pick for a long term security with dividends better than HTE.UN? If so, please tell.

  58. 62. Eva Bell

    Dreos
    for example

    Penwest PWT.UN.TO monthly div $1.31
    Pengrow 0.73
    Active energy AEU.UN.TO 0.36
    Pembina 0.36

    etc and cost less than HTE but I have HTE as well in my portfolio
    Eva_novice

  59. 63. Eva Bell

    Hi Dreos,
    and how about all REITS just a few for instance
    SRQ.UN
    MRT.UN
    INN.UN
    REI.UN etc….find complete list with them on web site
    http://www.sitefind.com/links/Public_companies/REITs/index.html

    let me know….
    Eva_novice

  60. 64. Dreos

    Hi Eva. I own some REI.UN. I also recently bought SDT.UN. Seems like a good diversified basket of income funds, many are energy and real estate style. Thank you for additional tickers.

  61. 65. Cannon_fodder

    I’m looking to put together a basket of 10-12 Canadian dividend achievers for a position of about $25k each.

    Is there a free website that will show me their current yield, dividend paying history (in terms of consecutive quarters with no decreases), rate of dividend paying increases and sector?

  62. Hey Cannon, check out the yahoo finance “historical prices”. It will give you the dividend payouts over the past 5-10 years by month. It won’t technically show the yield, but they will show the dividend in addition to the price. Since you are Mr. Calculator, you can pull that info into a spreadsheet to find the yield.
    http://finance.yahoo.com/q/hp?s=RY.TO

  63. 67. Cannon_fodder

    FT,

    If I’m going to be a lazy investor there has to be an easier way! I know you can the yield from yahoo if you do the detailed quote but I was looking for a one stop shop of all of the above info.

    I think I’ll just start with the dividend achiever’s info and then go find the yields individually. If it is relatively painless, I’ll probably create a spreadsheet that links to the yahoo site for realtime updates.

  64. 68. Chinstrap

    Sorry to nose into you discussion people but being pure yield gluttons at the expense of not knowing the underlying business is crazy in my opinion.

    Why not go for SXP.UN as it is yielding almost 18%.. That said, it is an envelope manufacturing company that is in secular decline with slow growth. I am comfortable with the risk b/c I believe it dominates the market and has synergies from an acquisition.

    Why not ask your broker for research on REITs, Royalty trusts or whatever instead of using Yahoo! At least you’ll also get P/NAV, payout ratios and not just yields.. If a company is paying out 100%+ payout it’s divvy is not likely sustainable.

  65. 70. CAD_Newbie_Investor

    Is there any specific advantage of investing in Canadian dividend paying stocks rather than any dividend paying stock?

  66. Cad_newbie_investor, Canadian dividends are preferred due to the tax advantage.

    http://www.milliondollarjourney.com/how-investing-taxes-work-part-2-dividends-and-interest.htm

  67. 73. Foster Follower

    Following Derek Fosters approach, I invest only in companies with a long, long history of paying and regularly increasing dividends. Unless the company is newly created, a five or even ten year history of paying an increasing dividends is, in my opinion, not a very long record. The longer the better as my interest is in building a portfolio that will equire little to none of my time to manage. That is, I do not wish to buy and sell stock, but instead, only buy and hold while collecting dividends. Also, I look for companies with DRIP and SPP in order to reinvest my dividends and buy addtional shares without paying broker fees which only serve to decrease value. And, I look to buy when prices are low …. usually once a yield is in the 4-5% range, I consider this a good buying opportunity. Usually, I never buy when yield is above 7% as this may indicate a problem with the ability of the company to continue paying dividends. Major banks, excluding National Bank of Canada, are the exception …. the banks are the economc foundation of this nation having paid dividends without interruption since before confederation in some cases. Even in these uncertain times, the banks will continue with dividends because it is in their and the country’s best interest to do so … cut or stop dividends and there would be a run on the banks, and a complete loss in confidence of Canada. Canada, unlike the US, has only 6 major lending institutions, and so, these will be protected no mattter what happens. So, I would buy bank stock at any yield, especially yields above 7%, because this is a bargain. Buy TD, CIBC, Nova Scotia, Royal … regardlessof their respective exposure to the car makers & paryts suppliers, regardlessof their ecxposure to comercial & personal real estate markets, etc. … they are good buys rights now …but buy and hold …do not buy with intention to sell sooner rather than much, much later … buy and then forget about them unless it is to buy more.
    Never hold dividend paying stck in an RRSP because when withdrawn dividends are taxed as employmnt income, whereas ouside an RRSP the tax rate is much, much lower. The exception is foreign dividends which are always taxed the same as regular income, and therefore, it may be beneficial to keep foreign stock in RRSP account.
    Also, look for buying opportunitiesfor dividend stock …. put cash in your non-RRSP account and then wait for the right opportunity … the right opportunity is when the price is down but the fundamentals are still good. Also, only buy into essentials such as banks, food suppliers, utilities / pipelines, etc. However, tryng to time the market is impossible so don’t regret your decision if stock drops after you purchase …. remember that you are in this for the dividends and not the capital gains.
    Also, regarding dividends, stay away from companies with dividends of above 7% as tis indicates that company will likely soon suspend or cut dividends. If you instead buy into a company at good company that has a long, long history of paying dividends as well as increasing dividends over tie, then if you buy at a time when yield is 5%, then it won’t be too many years bfore the yield is up to 10% or more.
    Currently, I hold stock in Enbridge, Algonquin Power, Bank of Nova Scotia, TransCanada Corp., Corby Distillery, Encana, National Bank and Fortis. In the new year, I plan to convert all my GICs to more Canadian dividend paying stock. My goal is a portfolio that will yield an annual income of $30,000 in dividends by the time I am 55….. I am 45 now … at the current Canadian dividend tax rates, this would be the same as earning an employment income of $50,000 per annum. Combined with my employment pension of 10,000, and later Canada Pension, and I will be earning more in retirement than I do now as a work slave… as well, my expenses will be less leaving more disposable income for travel, art, courses, etc. …the things in life that are more rewarding and fun. Derek Foster has it right …. dividends are the way to go … that is, buy and hold stock in companies with a long,long history of paying and regularly increasing dividendsand that are also the makers /suppliers of essentials / staplesin ost everyone’s homes …food, cash, booze, oil, gas, etc…. all those things that we can’t /won’t do without no matter how tough times may get.

  68. 74. Foster Advocate

    Hey Foster Follower and Others,

    I too, want to follow Foster’s lead.

    To you and others in this blog, some questions for you:

    1) What financial institution do you suggest I go with to start purchasing my Canadian dividend-paying stocks that have DRIPs and SPPs? I have a TD Waterhouse CDN WebBroker account – should I use that? Will that account allow me to use DRIPs and SPPs?

    My Plan:

    I am considering making my first dividend purchase with Enbridge, BMO, Royal Bank or Fortis.

    I currently have $20K+ in RRSPs and wish to continue those contributions to reduce my taxable income. However, the tax refunds I get, I plan on using to buy dividend-paying stocks in my non-RRSP WebBroker account.
    Slowly, I will transition away from RRSP contributions and into dividend-paying stocks.

    My goal (also) is a dividend-paying stock portfolio that will yield an annual income of >$30,000 when I am 55. I am 35 now.

    Thanks everyone for your input in advance!!!!!!!

  69. 78. Maverick

    Hi

    Foster Advocate try http://www.shareowner.com. free dividend reinvestment up to 0.0001 of a share.

    good luck

  70. 79. DRIPtileyeDROP

    I, too, follow the Foster regime, however, I wonder how he is holding up presently. Some of the transactions he put in place in his most recent book (e.g. BAC put options) have not faired well. I am assuming he takes it all in stride.

    The important thing with DRIP and SPP is to keep meticulous records. I have been doing this, intermittently, for nearly twenty years and when you wish to sell some of these positions you will be glad that you kept meticulous records.

    Also, if you do not understand Trust Unit organization do not invest in them. 2011 is sooner than you think and, although I am cautiously hopeful that this investment vehicle will not portend disaster for its holders, I would prefer to be invested in going-concern corporations. I will allow that REIT’s will be untouched by the new legislation.

    DRIPtileyeDROP.

  71. DRIPtileyeDROP,

    I don’t think he’s doing too well. Canadian Capitalist wrote about this recently…

    http://www.canadiancapitalist.com/what-went-wrong-with-the-derek-foster-strategy/

  72. 83. Newbie Investor

    Similar to Foster Advocate, looking to execute DRIPs and SPPs. Which institution should be used for accomplishing this goal. Presently have a BMO InvestorLine account. Don’t think this can be done there or should be due to the brokerage fees

  73. 85. Eva-Novice

    Bell Aliant Regional Comm. Income Fund BA.UN.TO does somebody know if this is some close funds etc? is it good idea to buy it?
    thank you
    Eva-and still Novice

  74. 86. Chris

    My favourite high-yielding Canadian trust units right now are REI.UN and PWT.UN. I see a good amount of discussion of REITs here but how do people about energy trusts?

  75. 87. Chinstrap

    I like Calloway REIT better than Riocan. Riocan just disappointed on Q1 FFO numbers.. If it comes back enough it might be a buy. It’s just toobig IMO and lower yielding. Calloway is similar but smaller and its assets are anchored 75% by Walmarts and Canadian Tire under LT leases: solid. I started buying at $10 with a 15.5% yield. Now it’s at $14 yielding 11%…

    For a riskier play I also own Chartwell Retirement Res. REIT. Started buing at $4.50 with a 16% yield. now at 5.70 and yielding 12.6%.. still pretty good. but risk on debt refinancing but not until next year..

  76. 88. Eva -Novice

    it would be nice if everybody reffering to some stock would list the stock TSX symbol.
    Thanks
    Eva-Novice

  77. Thanks @Chris, I looking into Canadian energy trusts after you mentioned it above. More info http://www.canadianenergytrusts.ca/.

  78. 91. Muneer

    Foster Follower, the companies you are talking about are the S&P 500 dividend aristocrats. What are dividend aristocrats? They are

    The S&P 500′s Dividend Aristocrats is the most prestigious list of dividend paying stocks in the world that are tracked by S&P 500 Index. The Dividend Aristocrats Index is a list of companies that have consistently grown their dividends for at least 25 consecutive years. The index is so strict that if a company misses even 1 year of growing its dividend, it is eliminated from the Dividend Aristocrats Index.

    * Exxon (XOM) – 27 years
    * Clorox Co (CLX) – 32 years
    * McDonald’s Corp (MCD) – 33 years
    * Wal-Mart Stores (WMT) -35 years
    * Coca-Cola Co (KO) – 47 years
    * Johnson & Johnson (JNJ) – 47 years
    * Procter & Gamble (PG) – 53 years

    When you think about multinational companies, Canada probably isn’t the first country that comes to mind. Instead, we think of McDonald’s, Wal-Mart, Altria (Philip Morris) – the usual suspects riding the scapegoat of globalization. But in fact Canada has its multinationals, too – you might not see them on the average “most wanted” list, but these companies have added incredible value around the world and are among not only Canada’s best, but the best in their respective industries. Even better, they all pay dividends.

  79. 93. Aaron

    I was wondering what would be a good plan for my tax free savings account. I am interested in dividend income mostly and was thinking of CDZ and XRE for sure. I will have $15,000 room available next year. Would it be a bad idea to put 50/50 CDZ and XRE? Would that be diversified enough? What do you think would be a better plan? Also I have over $50,000 in streetwise funds with ING Direct and was wondering if it was a bad idea now to keep adding to it. Should I sell and start buying ETF funds instead with the money? I have read some suggestions that the streetwise funds are really for people just starting out with small amounts.

  80. 94. Hugh Johnson

    High,

    I’m new to your site, like it very much, very informative.

    Question: Is there a list that shows just Canadian companies that pay dividends and every 2,3 or 5 years pay a special dividend. Trying to locate or
    find if such a list exist.

    Best Regards,

    Hugh Johnson
    Ottawa, ON

  81. 95. Steven Zuckerborg

    You have indicated some really high dividend yields however, be careful the companies are not forced to cut their dividends in the near future. Also when a company’s stock price drops a lot, the dividend yield automatically goes higher, so watch for a problem with the underlying operations of the company.

    You should also inspect the dividend payout ratio of most companies, and anything in excess of 80% signals trouble ahead & potential dividend cuts.

    Also have a read at 5 tricks to successful dividend investing at http://www.high-yield-dividend-stocks.com/successful-dividend-investing.html

    These are not really tricks but essential must-dos for any income investor. For example, a sample trick from the article that I like the most is:

    Don’t Chase High Yield Dividend Stocks without Understanding the Business

  82. 96. John

    I own Riocan , Innvest and Enbridge all are dividend paying trusts. These trust have gone up and down buy my average dividend has been over 7%.

  83. 97. Pabs

    I started trading penny stocks in 2002 looking to make what I had lost in the market after the dot.com bubble burst in 2001.Your article is a very smart approach to gaining long term profits. Quality companies which sustain their increase in shareholder value.

  84. 98. Brett Lockerbie

    Hellooooooo??? Why isn’t BCE even mentioned here? They clearly are one of the best dividend paying stocks out there, much better than Shaw and others that are mentioned in this article. I think the author missed the boat on this one.

  85. 99. stono

    not sure if its a good one , you will see that the dividend has gone down over the years..which is not what you want..

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