Both have Rothman’s but CDZ has more percentage of it than XDV according to the above link.

CDZ has income trusts, so with the changes in trust rules, will that be an issue?

CDZ has low volume than XDV. But of course, it’s criteria to hold stocks is better than XDV as it only adds stocks that have a history of increasing their dividends rather just the ones that pay more. It has almost double the amount of stocks than XDV.

Also, another difference is due to Questrade. QT buys whole shares automatically as a part of their automatic Dividend Reinvestment Plan (DRIP) and my goal is long-term investment so I like this DRIP option. However, CDZ has monthly dividends while XDV has quarterly dividends.

At 100 shares:
XDV pays out approx. 21 cents a share as dividend every quarter, and QT will buy 1 whole shares for me at it`s current price (say, $14.40), while for the same price of CDZ and 7 cents dividends every month, QT will not buy anything.

At 1000 shares each:
QT will automatically buy 14 shares of XDV while it will only be able to buy me 4 shares every month (12 shares every quarter) for CDZ. Not a big difference and you probably get better cost averaging with CDZ but in the end less shares get bought in the long-run and you pay more MER (0.60 vs XDV`s 0.50MER).

I am leaning more towards XDV though. Question for everyone? For tax-purposes since these are all in non-RRSP accounts, what’s the benefit of keeping either of these two ETFs vs the individual dividend-paying stocks if you are only adding the positions, say, twice a year? Is all income from these ETFs considered dividend income? This december I received the dividends on 31st December for all my iShares ETFs (XIU, XMD, XRE, etc.) and each one was marked as “Trust Income”. Is that treated as Interest income/capital gains/ or is that considered as Dividend Income?

How would one choose between CDZ and XDV or even individual stocks?
CDZ pays out monthly with 0.60% in fees
ZDV pays out quaterly with 0.50% in fees

You should carefully consider whether or not this will increase or decrease your yearly transaction + management costs as well as the impact to your yearly capital gains planning. I keep all my XDV shares in my RRSP and my wife’s RRSP to mitigate the capital gains impacts.

Your growth stock diversification will have to be handled elsewhere however. You might consider SSW as one stock that meets the dual need for sector diversification as well as growth.

That said, I do agree that you need to consider diversification across all your investments rather than one single account. The caveat here being your need to meet the requirements for the CRA tax rules. Which I must point out is near impossible due to how ambiguous they are.

http://www.theglobeandmail.com/servlet/story/RTGAM.20080701.wcarrick0702/BNStory/SpecialEvents2/

http://www.investments.shareowner.com/home/v1/index.html

Personally, I don’t worryabout diversifying one particular account. Like you, we hold mostly Canadian financials in our non-registered accounts. It makes the most sense due to the fact that dividends are more advantegeous for tax purposes in a non-reg. account. I think it’s a mistake to create separate allocations for each individual account. Look at your portfolio as a whole (including real estate and your wife’s accounts), for both diversification and asset allocation. As long as financials aren’t running the show overall (which I’m sure they’re not, given the amount of real estate you have), it’s best not to get caught up in trying to diversify every account. At leat that’s my 2 cents.

1. P/E is 12 or below. The average p/e for the last 50 years has been or about 12 (meaning that our stocks are way over-valued).

2. Price to book is 1.5 or below (I believe this is Graham’s ratio). For real estate companies, look at NAV rather than price to book as a better indicator of value.

3. What is the industry p/e and price to book? Is there a reason why it is above or below?

4. Cash flow and cash or cash equivalents on hand. If there is a large amount of cash on hand and the stock price is low, on a liquidated valuation, the company is worth something (not to mention it can acquire growth or become a take-over candidate).

I agree with Andrew- Husky is a good play. They just raised their dividend and they have an interesting growth play in the South China Sea. I have been eying it as a growth stock/dividend payer as well.

Nobleea, that is interesting. I’m looking into diversifying into the telecom industry, but I don’t trust them. :) I think the contenders are RCI, SJR, T, and MBT.

Chris, I do have “some” ethics, and is part of the reason why I wouldn’t purchase Rothmans. The other reason is that I believe that cigarettes have very limited upside left in them.

I don’t know how long Shaw has been paying out dividends. Since at least 2004 as far as I can tell. And slowly increasing them too.

Shaw and Rogers are similar in that they have the same offerings and are the Davids to the Goliaths of Telus and Bell. We also have Rogers out here. Both companies have outspoken leaders. Shaw is smaller and it’s primary strength is cable TV and internet. Their customer service is top notch – you can get a hold of someone very easily, and if their lines are busy, you leave them a message and they get back to you in a few minutes.

These are very much on the aggressive end of the dividend stock spectrum. Having said that, you may want to consolidate some of your positions and average down on some stocks before looking at these (especially Manulife which is getting to value stock territory).

DG, typically income trusts pay a combination of dividends, interest and return of capital. Corporate dividends are usually dividends only. To find the composition of the distribution from an income trust, you’ll have to go to the company site and do some digging.

nobleea, I haven’t looked into shaw. But after a quick search, it looks fairly appealing, and looks to have some upside. Any idea what their dividend history is like? We don’t have Shaw here in NL, only Rogers, how do they compare as a company?

MikeG, yes you can hold American stock within the SM portfolio. The reason why I limit those holdings is because US dividends are taxed as income. I am looking at purchasing more index based ETF’s like PRFZ and VTI.

Can you hold any American stock you choose in a smith maneouvre portfolio?
-MikeG

It occured to me recently that for families with young children, the SM mortgage has an added advantage: the amount of your Canada Child Tax Benefit is based on your household *net* (i.e. after-tax) income. If your household net income is more than about 37,000 the CCTB starts getting reduced. Therefore by deducting interest payments, which in turn reduces net income, in addition to the tax refund you may also get higher monthly CCTB payments (which by the way is not taxable).

Obviously contributing to an RRSP has the same potential to increase the CCTB, whether or not one has an SM mortgage.