Prescient

High-Yield Canadian Royalty Trusts vs. Dividend Growth Stocks

I appreciate the insight given by all.

The ALPHA writer is correct in recommending that retires not spend more than 4% of their portfolio or to assume CANROYS will always payout at present or historical rates. However when it comes to evaluating them as "investments", he seems to drive with a rear view mirror -- he says that Canroys are hares and MCD, PEP, JNJ are tortoises and therefore better investments because they have not been beaten down. What's there to to prevent them from get beaten down in the FUTURE? Is he recommending a Buy high Sell low philosophy? Many Corporations doctor their books to smooth out their profit/dividend growth and to hide their fundamental performance from investors. IBM did it for years in the 90s b4 it crashed. Overpaid and overrated Wall Street stiffs thought it had to do with a year or two of bad management. Not!

Dividend Growth Investor mentions how the tax law changes will affect payouts -- very useful information indeed. But even with those changes, the dividend is still very, very good. As a matter of fact, the low stock prices ALREADY reflect the tax law impact. What makes the CANROYS good or bad investments , is the projection of whether oil prices will stay where it is, or whether it will go up. I do not have a crystal ball on oil prices, but if oil goes up, stock prices will certainly go up in tandem. So will dividends. Whether the CANROYS become corporations or not has no bearing on whether they make good investments. If they convert, they would just plow more of their profits back and grow their business. Their payout will be less, but their stock prices will increase, as their NAV increase.