d_teller

Dividend Stocks: The Good, The Bad and the Ugly

To: AmishRakeFighter & Whisperonthe Wind...

The CanRoys, but not any xLP or Holdr or GrantorTrust are suitable for U.S. Tax-Sheltered accts.: IRA's SEP, S' and Roth's. The 15 % Cdn tax on dividends cannot be reclaimed from a tax-shelter.

But , since most are "qualified divs' for current IRS (U.S.) tax purposes, (even the Cdn REIT's divs are, although U.S. REIT divs aren't qualified) the net of the Cdn tax is an offset ...it's a tax credit on the U.S. 1040, so the current 'qualified" dividend tax has been paid at the source, because of the U.S.- Cdn. tax treaty.

After 2011, some of the CanRoys may change, some have sufficient Cdn expenses that their dividend stream will be unchanged for 2-3 additional years. Others, such as Atlantic Power Income Trust (ATP.Un/TO) have income from U.S. operations, and won't be subject to the Cdn. 2011 taxes on income produced in Canada. Some, e.g., Pembina, Enerplus, Provident, may reduce dividends, as oil/gas revenues decline, but others such as Bonterra and Boralex may increase them as the weather looks colder/longer.

There's a listing of the trusts from the TSX site that's in Xce (xls) format; and one column has the "type" of Trust...Commercial, Oil/Gas, etc.

When you go to the listing on the TSX, you can see if it's a "Stapled" unit (the combination of bond and equity, such as TimberWest Forest Products; whether it's interlisted on major U.S. exchanges, or has a Nasdaq "Pink-sheet" listing; what its business is, in some detail, etc.

There's also a note for U.S. investors, that about 1/3 of the CanRoys are not for "Foreign" investors, and you get this, and their dividend history from the link to the investor-relations section at the company's home page.

Black Swans, Real Estate and Financial Stocks

I really appreciate G.Considine's essays. Sometime late last spring, there was an article/posting on SA about the unreasonably low yield of REITS (their prices having risen, and their dividends remaining, not 200 bp above Treasuries, but 200 bp BELOW!) Fair value was estimated at 40 -60 % below their market pricing of that time. At that time I sold off a fewer of the weaker ones. I had no idea of SIVs, had not purchased any CDO's, etc. I think the clue to the turn in the market's fundaamentals (in the U.S.) lay in that peak or bubble ... after the physical real estate bubble had been identified in late 2006.