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Canadian Dividend Growth Investor

 
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  • Setting Up The Young Person's Portfolio [View article]
    Hi,

    I'm also Canadian, 28 this year, and I still consider myself "young". For my dividend growth portfolio, I like a mix of:
    - higher yielders with some growth: BCE (in non-registered/taxable account since Canadian eligible dividends are favorably taxed there), KMI (in RRSP, tax-deferred account)
    - moderate yielders with moderate dividend growth (KO, CVX, MCD, GE, CSCO, etc. - some of these in RRSP and some in taxable)
    - low yielders with high growth (V, SBUX, IBM, ROST, QCOM)

    The fact with low yielders and high growth is that, it takes time for the dividend to grow from $0.20 to $0.80 as per your example.

    For example, I can get BCE at 5% yield now, and let's say it grows its dividend 6%. Compared to buying V, at current yield of 0.9% and assuming it grows its dividend 20% annually. It'll take ___ years for V to catch up to BCE's yield. Of course then, the young investor would argue that he/she would get substantially higher capital appreciation holding V. But in the meantime, with a high yielder, one could reinvest those dividends manually (mixed in with other income) to buy the best value at the time when funds are available.

    So in essence, with a higher yielder, you can use it to buy more shares (as soon as you receive the dividends, which from my experience are usually sooner than the dividend growth and capital gains of low yielder). With a low yielder, you're expecting higher dividend growth and higher capital appreciation (farther into the future).

    Being a Canadian, I can only reinvest dividends via my bank if the dividend is able to purchase a full share. That's why I mostly reinvest dividends manually mixed in with other sources of income.
    Jul 11 04:57 PM | 1 Like Like |Link to Comment
  • How To Better Use Capital To Get Higher Income And Higher Total Return [View article]
    BoomBoom,

    Maybe I'm using the wrong wording here, but buying at long-term MA has worked well for me so far. Particularly so when I picked up some SLW when it was bouncing off of the 400-day MA (described in this article: http://seekingalpha.co...)

    Again, fundamental comes first before technicals. The technicals just might help me get in at a better entry point.

    Thanks for the link. I will have a closer look. Looks like there's a neat set of related articles at the bottom where it lists the Table of Contents. I will bookmark this.

    Cheers,
    CDGI
    Jul 9 02:45 AM | Likes Like |Link to Comment
  • The Numbers Are In! [View article]
    Faye,

    "Instead of just selling and then buying, I waited for a dip then bought the shares lower, then sold the original shares at a higher price, meanwhile getting an extra dividend payment with double the shares, kinda sweet and paid for more than the transaction." -- This is an interesting way of doing things that I didn't think of. Food for thought.

    IPL does look quite overvalued on FAST, but if you view the "Cash Flow" graph, at the end of 2015, P/CFL orange line is at $35.4. However, according to normal blue line, it's way overvalued. The historical cash flow growth in the 15 year period is 7.9%, while the estimated for next 5 is 20%. If that estimation is legit, then, it explains the current higher P/CFL. Now, that's only a very high level view, as I don't know anything else about this company. (Sorry I'm of no help) But if the oversized position is causing you to have sleepless nights, then maybe you should trim the position.

    I hold ENB and KMI right now.
    Jul 8 02:39 AM | Likes Like |Link to Comment
  • The Numbers Are In! [View article]
    Faye, thanks for the link. I do keep track of how much dividends I receive with a spreadsheet.

    What's confusing for me is that I contribute to the US non-registered account, and buy US companies in TFSA, while having Canadian securities in both the TFSA and non-registered account as well. Maybe I just need to learn to track inflow and outflow of cash. That should be easy to do, but it's cumbersome because I got over 2 years of trading, and I traded a tad too much the 1st year. :p

    I only recorded how much the portfolio was at at the end of 2013. And I planned to record it at the end of each year. Do you record this quarterly?
    Jul 8 02:29 AM | Likes Like |Link to Comment
  • The Numbers Are In! [View article]
    Faye,

    No wonder you haven’t been writing for awhile! Courses and work can keep you busy, but also sharpens the mind ;)

    I like your example of MCD being originally 15% of the portfolio and that it has shrunk down to 6% as you add other shares to your portfolio. (As I once sold some shares of a winner to more balance things out, only to have that winner keep runner — so I would have been better off not selling its shares.)

    “I have tried to buy on a dip in the new location, wait for the recovery and sell the holding in the old location, often double-dipping on dividends. Though from a macro-portfolio view it looks like trading, it really has a higher purpose and has opened my eyes to other applications and possibilities.”

    I don’t quite understand why you are doing this. What is the higher purpose? Are you moving one stock from one account to another in a more tax-efficient way doing this rather than transferring shares from one account to another account?

    In terms of possibly adding to ENB, Morningstar is giving it 4-stars for undervaluation. In FAST graphs, if you plot the graph using Cash Flow instead of Adjusted Operating Earnings, you'll see that it's fairly valued. Well, believe what you might and decide what's comfortable for you.

    Cheers,
    Canadian
    Jul 7 03:31 AM | Likes Like |Link to Comment
  • The Numbers Are In! [View article]
    Faye, how do you keep track of the sources of your portfolio growth (capital gain, dividend, and contributions)?

    Is your capital gain unrealized or realized?

    I have mostly long-term holdings, but there are several which are meant for trades, and some for short-term trading.

    Most of my portfolio gains are from contributions, but I don't keep track of how much as of now. I just try to buy companies at a value.

    Would love to hear if you could share how you keep track of your sources of portfolio growth.

    Thanks,
    Canadian
    Jul 7 02:44 AM | Likes Like |Link to Comment
  • You Are Responsible For Your Investing Decisions [View article]
    maybenot, and when they say that stocks are risky, then, I can bring out the story of DGI ;) The financial crisis in 2008 - 2009 was the first big one I sat through. I bought a good back on its way down. It went down 48% more before coming back up. I ended up selling a little over break-even. I was doing internship during that time, and instead of buying at low prices, I was sitting on the sidelines with whatever I earned after the purchase of the bank. Anyway, at least I didn't sell at the lows... Hopefully, I'll act calmly and rationally in the next big one
    Jul 5 02:44 AM | Likes Like |Link to Comment
  • Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation [View article]
    I look through my watch list when I have funds to see which ones are down (5%-10%) or one could look at the 1-month or whatever period heat map on finviz (http://bit.ly/1eORhZr) to look for possible companies to research on. Then, if the fundamentals are still intact, and the company fits into your portfolio, maybe time to buy. Sometimes when news come out, the price may go up/down overboard due to emotion (fear/greed).
    Jul 5 02:27 AM | Likes Like |Link to Comment
  • You Are Responsible For Your Investing Decisions [View article]
    DVK, thanks for writing this article which this vibrant comment stream spurred from.

    Some main points which are good reminders for me:
    - Create a plan, execute it, and refine it.
    - Learn from mistakes and don't make the same ones again.
    - Know what role each holding plays in a portfolio (i.e. for dividend growth, for current income, for short-term capital gain or longer term capital gain)...I write short notes to remind myself why I bought something. I have a document for each long-term holding of why I continue to hold it.

    In particular, to avoid buying with emotion, I determine buy ranges for companies on my watch list ahead of time. This is documented in my recent article, How To Better Use Capital To Get Higher Income And Higher Total Return. The link: http://seekingalpha.co...

    For long-term holdings, I do not set sell points. I just review them quarterly to see if they're excessively overvalued. For capital gain plays, especially short-term ones (6 - 9 months), I set the expected gains range (e.g. 20 - 30%). Once that is hit, I can sell to purchase something else. I use a small portion of my money for the short-term plays with intention to generate more cash for long-term purchases.

    Most of my friends do not buy stocks. A few have dabbled into mutual funds. They simply do not have the interest to learn. When I told them I bought stocks, usually the first reaction is "That's so risky!" I guess I thought buying stocks was ok because my parents bought some too. When I started, I had no idea what made the stock price move up or down, I didn't know about valuation or earnings growth, though I knew I like dividends. But it even took me awhile to learn about "yield" and the "dividend". I didn't understand why they needed to show the yield since back then I only cared about the amount in dividends that I'd receive lol

    Fast forward to today after having found SA in 2012, I learned so much from authors and commenters. I've even bought some books that were recommended by others on here:(not in any particular order)

    - Lowell Miller's The Single Best Investment (Dividend Growth Investing)
    - Benjamin Graham's The Intelligent Investor (Value Investing)
    - Peter Lynch's One Up on Wall Street
    - Lichtenfeld's Get Rich with Dividends
    - Jason Kelly's The Neatest Little Guide to Stock Market Investing
    - Philip Fisher's Common Stocks and Uncommon Profits

    All I can say is, I'm thankful I stumbled upon SA and took responsibility of investments (even though I made quite a number of mistakes along the way). It can only get better from here as I continually learn, track, and reflect what I'm doing.
    Jul 4 03:37 AM | 5 Likes Like |Link to Comment
  • Raytheon: Underpriced, Long-Term Value [View article]
    Nice, informative article. I also like Raytheon right now.
    Jul 4 03:02 AM | 1 Like Like |Link to Comment
  • Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation [View article]
    NV_GARY,

    Thanks for your comment.

    I'll quote Graham: the owner of equity stocks should regard them first and foremost as conferring part ownership of a business. With that perspective in mind, the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine (i.e. its true value will in the long run be reflected in its stock price).

    Perhaps the decline is partially due to 6 insiders selling their shares, described in this article published in mid June: http://seekingalpha.co...
    Jul 4 02:59 AM | Likes Like |Link to Comment
  • Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation [View article]
    Claire,

    Thank you for sharing your real life example. Kudos for holding a great company for 3 decades (that's a CAGR of 13% + dividends), well in excess of the average market return of 10%.

    I was reading Lowell Miller's The Single Best Investment. Between the period for 1989 to 2006, there was a time when JNJ's earnings continue to rise, the the price was falling. At that time, the yield growth was 15%+. Now, JNJ's dividend growth is more like 7%. I suspect RTN (and other companies) are heading in that direction as well since no company can grow at a high rate forever. That said, I think buying RTN at today's valuation is still a good investment.

    Cheers,
    PIE (I love pie)
    Jul 3 03:21 AM | Likes Like |Link to Comment
  • Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation [View article]
    wdjax0n, agreed. Earnings growth will lead to dividend growth and steady price appreciation.
    Jul 3 03:07 AM | 1 Like Like |Link to Comment
  • Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation [View article]
    MoneyMadam, March 2013 was about when I bought some shares as well. Too bad I sold out in end of June 2013...too much capital gain too fast. I was too inexperienced. Now, I stick to fundamentals first and technicals second.
    Jul 3 03:07 AM | 1 Like Like |Link to Comment
  • Bought Raytheon At 10% Discount For Dividend Growth And Steady Price Appreciation [View article]
    domveit, unfortunately for investors who want to get in now, most of the P/E expansion has already occurred. Forward looking a couple years though, looks like it's fairly valued to slightly undervalued for RTN, LMT, and NOC.
    Jul 3 03:03 AM | Likes Like |Link to Comment
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