What's in your dividend portfolio?

[Sanyo]

Always interested to hear what people have in their portfolio and/or tips on some good high yielding names.

Mine are Td Bank, Scotiabank, Liquor Stores, Cineplex, BCE, Philip Morris (US), The Keg royalty fund, Enbridge,

[Stryker]

All Canadian dividend growth stocks diversified by sector in a taxable account. I prefer purchasing growth at a reasonable, rather than looking at just dividend yield alone. My minimum threshold for dividend yield seems to be around the 1.5% mark.

Been studying dividend growth investing for over thirty years, but only started building the portfolio in the past decade. A work in progress. I learn far more the errors of my ways from major market corrections than I ever did from bull markets.

AGF Management Ltd.-B NV AGF.B
Bank Of Nova Scotia - BNS
BCE Inc. - BCE
CCL Industries Inc. CL-B NV
CI Financial Corp. - CIX
Calian Technologies - CTY
Canadian Imperial Bank Of Commerce - CM
Canadian National Railway - CNR
Canadian Utilities CL-A - CU
Canadian Western Bank - CWB
Corus Entertainment-B NV - CJR.B
Emera Inc. - EMA
Empire Company - EMP.A
Enbridge - ENB
Ensign Energy Services - ESI
Fortis Inc. - FTS
Gluskin Sheff & Assoc. Inc. - GS
High Liner Foods Inc. - HLF
Home Capital Group Inc. - HCG
Leons Furniture Ltd. - LNF
MCAN Mortgage - MKP
Metro Inc. Cl-A SV - MRU.A
National Bank Of Canada - NA
Richelieu Hardware Ltd.- RCH
Rogers Communications-B NV - RCI.B
Royal Bank Of Canada - RY
Saputo Inc. - SAP
Shaw Communications-B NV - SJR.B
Shoppers Drug Mart Corp. - SC
Talisman Energy - TLM
Tim Horton's Inc. - THI
Telus - T
Toronto Dominion Bank - TD
TransCanada Corp. - TRP
WaterFurnace Renewable Energy - WFI

[tasamy]

So what do you think guys of XDV, CDZ, XEI, and ZDV? my heart tells me CDZ is better than the others but not sure!

[crunchyfrog]

i have CDZ and CPD. CDZ basically covers most of the stocks listed above. i looked at xdv and its financial weighting is higher and since i own some financial stocks directly i decided to pick CDZ to balance it out.

i like to keep it simple so i went with CDZ and CPD instead of buying and tracking individual stocks. I do pay slightly a bit more for these ETFs compared to buying/selling stocks.

i also enrolled into the DRIP program offered by CDZ and CPD which are paid monthly

[tasamy]

Thanks.

I have a question: Most of us are looking for a fixed growth rate like 6% per year (by another thread) to overcome low interest rates. For example, HXY returns around 7% per year dividends while the price of the stock has changed from $19-$21. Do you think these high dividend etfs are the optimal solution for a fixed return? Do you think it is a small risk in general if compared to other stocks/portfolio/coach potato..etc?

[canuck1]

Vig

[deal_with_singh]

I buy stocks more for growth over dividend payments. But here's my Canadian dividend paying stocks:

Canadian Oil Sands (COS)
Suncor Energy (SU)
IAMGold (IMG)
Kinross Gold (K)
Agnico-Eagle Mines (AEM)
Bombardier (BBD.B.TO)
Toronto Dominon Bank (TD)
Niko Resources (NKO)

And those are about it for the Canadian side of things.

US Stocks I own that pay dividends include:

Citigroup (C) - Next to nothing dividend
Bank of America (BAC) - Next to nothing
Ford Motors (F)

[FiNaL WaR]

only have 2k worth of BCE at the moment

[Jungle]

Cnr
bce
rci.b
agf.b
ry
bmo
cm
bns
cos
su
enb
trp
xic

[McClane]

MCD BCE T VZ PEP and NVS

[PhillipJFry]

RSI is a good company. It pays about 6%. Unfortunately, the price does not really go anywhere. Maybe thats a good thing.

[Cerenity]

top 5 holdings are

Intel
Bank of Nova Scotia
Johnson & Johnson
Exxon Mobil
Coca Cola

rest can be found on my blog, i update the status of the div growth portfolio once a month

[Jerico]

John Deere is a great investment. (DE) They are US traded, so right now is a decent time to get in on that. They have great dividends, and its probable that the stock itself will grow over time considering people need to eat.

I used to work there and know the fundamentals inside and out. To sum up: dividends are great, stock poised for growth, in downturns it always comes back.

[pchi]

SBUX- 17c/qtr
BPF.UN- 9.8c/mo
BMO- 70c/qtr
JE- 10c/mo
POT- 14c/qtr
KEG.UN- 8c/mo
MA- 30c/qtr
IPL.UN- 9c/mo
TRP- 44c/qtr
CHE.UN- 10c/mo

[Chigu]

All in TFSA at the moment

EGL.UN - Eagle Energy Trust yield when I bought: 10.56%
PLT.UN - Parallel Energy Trust yield when I bought: 12.00% , yield now because of increased distribution. 12.8%
BNS.TO - Bank of Nova Scotia
RY.TO - Royal Bank
SU.TO - Suncor
TBE.TO - Twin Butte Energy yield 7.2%

[Sniper001]

I buy stocks more for growth over dividend payments. But here's my Canadian dividend paying stocks:

Canadian Oil Sands (COS)
Suncor Energy (SU)
IAMGold (IMG)
Kinross Gold (K)
Agnico-Eagle Mines (AEM)
Bombardier (BBD.B.TO)
Toronto Dominon Bank (TD)
Niko Resources (NKO)

And those are about it for the Canadian side of things.

US Stocks I own that pay dividends include:

Citigroup (C) - Next to nothing dividend
Bank of America (BAC) - Next to nothing
Ford Motors (F)

Niko Resources? Really? :razz:

Mine: ABX, SLF, SU, TD.. and have cash for 1 position for a buying opportunity. Don't know how some of you guys have more than 5, no idea how I would manage keeping up with more than what I have.

[ryebread12]

Are these all in your mutual funds? Can you guys customize your mutual funds so that you can select whichever companies you can invest in?

[red_skittles]

Are these all in your mutual funds? Can you guys customize your mutual funds so that you can select whichever companies you can invest in?

they own the individual stocks and together those stocks make up a portfolio with a focus on dividend income and growth

[Jon Lai]

I'm surprised there's no MFC and only one SLF around here - I hold both. For dividends you can't go wrong with these :P

[ykshum]

Unlike some of you here, my portfolio is focused mainly on growth due to my age. But there's an interesting stock which I see as having great growth potential while paying a monthly dividend which equates to 8.2% a year (without compounding). The symbol is PSN.to. Relatively new concept in a field of its own.

http://poseidonconcepts.com/

My other play that pays a dividend is TBE.to.

[canehdianman]

debating some ERF (enerplus). It's been hammered down lately and is at risk of a dividend cut and nat gas prices, but it's hard to say no to 12% yield.

[ykshum]

debating some ERF (enerplus). It's been hammered down lately and is at risk of a dividend cut and nat gas prices, but it's hard to say no to 12% yield.

You would think otherwise if you take a look at a similar story in AVF. Their Nat. gas hedges came off recently and with the current low prices, they cut their dividend and SP went from $5.60 down to current sub $4 range.

http://www.google.ca/finance?q=avf.to

[Cerenity]

I'm surprised there's no MFC and only one SLF around here - I hold both. For dividends you can't go wrong with these :P

those two would be eliminated very early in a DGI strategy. the first step in the filter is removing companies that have frozen or cut dividends in the last 5-10 years.

pure yield chasers and more experienced yield seekers might buy those, but its not a particular strong strategy and is often misused by novices who just got introduced to dividend investing and mistakenly believe it is about yield chasing.

[Jon Lai]

those two would be eliminated very early in a DGI strategy. the first step in the filter is removing companies that have frozen or cut dividends in the last 5-10 years.

pure yield chasers and more experienced yield seekers might buy those, but its not a particular strong strategy and is often misused by novices who just got introduced to dividend investing and mistakenly believe it is about yield chasing.

That's true. I didn't buy them for the dividend (I aim for growth) but they were certainly a bonus while I wait them out to return to 2010 levels :P

[Sniper001]

I'm surprised there's no MFC and only one SLF around here - I hold both. For dividends you can't go wrong with these :P

Haha, agreed. SLF has a solid dividend. I too was surprised I didn't see anybody with it...


Are these all in your mutual funds? Can you guys customize your mutual funds so that you can select whichever companies you can invest in?
As for your question, all of these stocks are in my TFSA. :D Mutual funds are for squares. Invest in individual stocks, manage your own portfolio.

[ryebread12]

Haha, agreed. SLF has a solid dividend. I too was surprised I didn't see anybody with it...


As for your question, all of these stocks are in my TFSA. :D Mutual funds are for squares. Invest in individual stocks, manage your own portfolio.

Interesting. I would love to invest in individual stocks and manage my own portfolio but Im a newbie with investments... I just let someone esle manage my mutual funds just to see where it goes... Right now Im just trying to figure out if I have a choice to be selective of what companies I would like to invest in with the mutual funds I have..

[PhillipJFry]

Interesting. I would love to invest in individual stocks and manage my own portfolio but Im a newbie with investments... I just let someone esle manage my mutual funds just to see where it goes... Right now Im just trying to figure out if I have a choice to be selective of what companies I would like to invest in with the mutual funds I have..

Remember that with stocks, you run the risk of losing all your money if the company goes belly up. Take a look at Sino-Forest, http://business.financialpost.com/2012/04/09/sino-forest-receives-osc-enforcement-notices/, and SNC-Lavalin, http://www.cbc.ca/news/business/story/2012/02/29/f-snc-analysis.html. If you had your money in these companies, it is debatable if you will have any money left when the smoke clears.

Passively-managed ETF's are the safe version of buying individual stocks. You can have, generally, 10 to 500 companies inside one ETF. Therefore, if one company goes bankrupt, you did not lose all your money. If all the companies in that ETF goes bankrupt, well that is just WRONG!

[Gingercookie]

Some relatively obscure dividend names I own:

Northwest Company NWC operates grocery stores in remote rural areas, yielding 4.7%

MI Development MIM is the landlord of Magna, yielding 5.8%

Gibson Energy GEI is a midstream energy pipeline operator, yielding 4.7%

Evertz Technology ET sells A/V equipment for the TV industry,yielding 4%

[Cerenity]

Interesting. I would love to invest in individual stocks and manage my own portfolio but Im a newbie with investments... I just let someone esle manage my mutual funds just to see where it goes... Right now Im just trying to figure out if I have a choice to be selective of what companies I would like to invest in with the mutual funds I have..

stick with low cost funds like e-series until you have around 40-50k, then pick 5-6 core positions you'd like to anchor your portfolio and put 5-10k in each, and spread the rest out in lesser names you want to fill out your team with

for core positions, go with big mega cap companies
1. 2-3 that are in defensive industries, like health care, consumer products, food/beverage, utilities
- ie: Coke, Johnson & Johnson, Procter & Gamble, McDonalds

2. 1-2 in secular trends, like agriculture, mobile communications, global commerce and middle class emergence
- ie: Apple, Intel, Potash, Deere, CN Rail, UPS

3. 1-2 in products you use or know really well, like coffee shop or restaurant you visit, or product/service you buy/use often
- ie: Tim Hortons if you love their coffee/donuts/breakfast, Darden Restaurants if you goto Olive Garden/Red Lobster a lot, or Colgate because you just dont like the taste of Crest


there was a 2 part series written by a friend of mine that is on my blog regarding this exact topic of how to build your own portfolio from scratch, for a novice investor.

portfolio building is kind of like building a sports team. you need superstars, that you can count on day in day out, to form the core. you need to surround them with good role players who can do specific jobs very well. etc

[Jungle]

I had SLF and sold it at 24.99 during opening bell as they posted a profit LOSS. Next Q they posted another profit loss.. So be mindful when you say their dividend is "solid." And BTW the market did price in a dividend cut. Since Dec, rising equity and bond yields saved their bacon. That's why everyone bought back in. But don't expect steller earnings any time soon, they are injured and recovering from millions in profit losses.

MFC is their big brother.. look at their stock price and dividend over the last few years. It got SLASHED hard and share price dropped 3/4.

SLF is too risky for my tolerance and I don't suggest it for leveraged investing right now.

[Sauerkraut]

Remember that with stocks, you run the risk of losing all your money if the company goes belly up. Take a look at Sino-Forest, http://business.financialpost.com/2012/04/09/sino-forest-receives-osc-enforcement-notices/, and SNC-Lavalin, http://www.cbc.ca/news/business/story/2012/02/29/f-snc-analysis.html. If you had your money in these companies, it is debatable if you will have any money left when the smoke clears

There's bad news and then there's BAD news. It may take some time to regain investor confidence, but I hardly think SNC is going belly up!

....and although it's getting a bit expensive, no one has mentioned First Capital Realty. I've been waiting for a shareprice correction for a couple of years so I can add to my position, but no luck.

[Soda Popinski]

I'm surprised there's no MFC and only one SLF around here - I hold both. For dividends you can't go wrong with these :P

I know you said that that you've bought both of these stocks because you expect their value to go up, but for those who are investing primarily to earn dividends, isn't it risky to purchase stocks in companies in the same sector? If the insurance industry gets rocked again then both of these companies will be negatively impacted.

[Jon Lai]

I know you said that that you've bought both of these stocks because you expect their value to go up, but for those who are investing primarily to earn dividends, isn't it risky to purchase stocks in companies in the same sector? If the insurance industry gets rocked again then both of these companies will be negatively impacted.

I look at it differently - If you have $100, then split it up between the two companies, and you've mitigated risk, instead of adding risk. What you said only applies if I'm investing the same amount of money but in two companies of the same sector.

[FiNaL WaR]

I had SLF and sold it at 24.99 during opening bell as they posted a profit LOSS. Next Q they posted another profit loss.. So be mindful when you say their dividend is "solid." And BTW the market did price in a dividend cut. Since Dec, rising equity and bond yields saved their bacon. That's why everyone bought back in. But don't expect steller earnings any time soon, they are injured and recovering from millions in profit losses.

MFC is their big brother.. look at their stock price and dividend over the last few years. It got SLASHED hard and share price dropped 3/4.

SLF is too risky for my tolerance and I don't suggest it for leveraged investing right now.


imo if you want to own them do it trough power financial,

added some riocan today

[Sylvestre]

Sold everything in the last few weeks but at the start of the year I had.
BDT
MFC
BNE
BNS
FTS
TRP

Worst was FTS; best was BDT (by a mile!)
Avg. yield was >4%.

[Jungle]

imo if you want to own them do it trough power financial,

added some riocan today

Agree with you 100%

And I don't know how you can buy Riocan at these levels. lol

[Sanyo]

Great to see all the posts and looking forward to many more hopefully to come on this thread.

Cineplex has been my biggest winner the past year I bought it at $21.70 early last year with a yield at the time around 6%, now close to $30 and yielding 4.3% if you buy in now. Is a bit pricey now and I would hold but I feel the box office will be stronger this year with big hits like Dark Knight, Spiderman and Avengers coming out and the fall and Christmas should be stronger with Hobbit coming out compared to last year and will mean more people buying popcorn and soda! :)

[Jungle]

Ya their profit margins on $20 popcorn must be like 10,000% . lol

[ryebread12]

Great to see all the posts and looking forward to many more hopefully to come on this thread.

Cineplex has been my biggest winner the past year I bought it at $21.70 early last year with a yield at the time around 6%, now close to $30 and yielding 4.3% if you buy in now. Is a bit pricey now and I would hold but I feel the box office will be stronger this year with big hits like Dark Knight, Spiderman and Avengers coming out and the fall and Christmas should be stronger with Hobbit coming out compared to last year and will mean more people buying popcorn and soda! :)

I've always been interested in investing in Cineplex, how do I do that? :confused:

[ryebread12]

Remember that with stocks, you run the risk of losing all your money if the company goes belly up. Take a look at Sino-Forest, http://business.financialpost.com/2012/04/09/sino-forest-receives-osc-enforcement-notices/, and SNC-Lavalin, http://www.cbc.ca/news/business/story/2012/02/29/f-snc-analysis.html. If you had your money in these companies, it is debatable if you will have any money left when the smoke clears.

Passively-managed ETF's are the safe version of buying individual stocks. You can have, generally, 10 to 500 companies inside one ETF. Therefore, if one company goes bankrupt, you did not lose all your money. If all the companies in that ETF goes bankrupt, well that is just WRONG!

Interesting. So if I choose to get into ETFs, and I want to select the companies that I WANT to invest in, what should I do? Is that possible?

[Stryker]

I know you said that that you've bought both of these stocks because you expect their value to go up, but for those who are investing primarily to earn dividends, isn't it risky to purchase stocks in companies in the same sector? If the insurance industry gets rocked again then both of these companies will be negatively impacted.

For diversification purposes, I've allocated our Canadian dividend growth portfolio to seven approximately equal "target" sectors. Keeps me from being trapped into focusing too much on dividend yield.

CONSUMER DISCRETION: 14%

CONSUMER STAPLES: 14%

ENERGY 15%

FINANCIALS: 14%

INDUSTRIALS: 14%

TELECOMMUNICATIONS: 15%

UTILITIES: 14%

[Cerenity]

Interesting. So if I choose to get into ETFs, and I want to select the companies that I WANT to invest in, what should I do? Is that possible?

buy your own stocks then, and make a large enough basket that you are essentially a mini ETF

i dont like ETFs myself, because i dont like buying garbage along with good stuff. just like i dont like buying big bags of bulk produce in bags/crates where i cant really see 2/3 of the products in the bag/crate

[FiNaL WaR]

I've always been interested in investing in Cineplex, how do I do that? :confused:

open a trading account and buy CGX.TO

i personally don't like the 35 x P/E

[Agent Zero]

What do you guys think about MSI, and BPF.UN for dividends?

[deal_with_singh]

Niko Resources? Really? :razz:

Mine: ABX, SLF, SU, TD.. and have cash for 1 position for a buying opportunity. Don't know how some of you guys have more than 5, no idea how I would manage keeping up with more than what I have.

Whats wrong with Niko Resources? They're one of the easiest companies to flip. Make about $3 per share each time I flip it and I flip it within 2-3 days of buying it.

As I said I buy for growth not dividend, the dividend is just an added bonus :P

[Cerenity]

What do you guys think about MSI, and BPF.UN for dividends?

not enough history of maintaining and growing the div in either
both also way too small for my liking. i filter out anything under 1 billion market cap.

[Stryker]

not enough history of maintaining and growing the div in either
both also way too small for my liking. i filter out anything under 1 billion market cap.

That's where we differ. I'll take a dividend grower at any market cap. Some periods in investment history the small caps have put in a better performance than the large caps.

[pchi]

What do you guys think about MSI, and BPF.UN for dividends?

Interesting, I had no ideal about MSI on the stock market. Pays a monthly dividend of 7cents. I have a friend who works there. Seems like the charts aren't bad at all... at 52 wk high. However, I don't like insurance companies though. I invested in MFC and got burnt.

I like BPF.UN... has been paying me a steady stream of distribution since May of 2009. I continue to hold. Plus the price appreciation helps up 96% to date.

[Cerenity]

That's where we differ. I'll take a dividend grower at any market cap. Some periods in investment history the small caps have put in a better performance than the large caps.

sure, that's fine too, but neither of those have a proven history of div growth lol

for me, there are plenty of companies attractively valued to choose from to not need to go digging in small caps, where your likelihood of finding something are lower to begin with

[brunes]

sure, that's fine too, but neither of those have a proven history of div growth lol

for me, there are plenty of companies attractively valued to choose from to not need to go digging in small caps, where your likelihood of finding something are lower to begin with

I am not really sure what you are meaning by "dividend growth" anymore after this comment. BPF.UN's dividend has never been below 6% of it's market value since it was incepted (10 years).. at times (when the stock pulled back during the recession) it was even much much higher.

Normally when talking about "growing the dividend" people mean "to keep up with respect to the stock price"...

Or do you simply mean 10 years is not long enough for you?

[Cerenity]

I am not really sure what you are meaning by "dividend growth" anymore after this comment. BPF.UN's dividend has never been below 6% of it's market value since it was incepted (10 years).. at times (when the stock pulled back during the recession) it was even much much higher.

Normally when talking about "growing the dividend" people mean "to keep up with respect to the stock price"...

Or do you simply mean 10 years is not long enough for you?


dividend growth (DG) = growth of the dividend over time.
not yield, not relative to stock price, absolute value (adjusted for stock splits and what not). im not sure where you got that concept of growth with respect to price, but it makes zero sense, because it implies yield plays into determining whether a stock is a DG stock or not, which is 100% false.

DG is a pretty standard concept.
growth of the annual dividend every year without abandon.

typical well known DG stocks
J&J, Kimberly Clark, Procter, Coke, Pepsi, 3M, Exxon, AT&T, McDonalds, Walmart, Colgate

some lesser known (to the avg person) DG names
Emerson, Sysco, PPG, RPM, Parker Hannafin, Medtronic, Illinois Tool Works, Genuine Parts

newer DG names in tech land
Intel, Microsoft

some canadian names that could qualify are
Rogers, Telus, CN

some people also choose to invest in stocks that have not necessarily grown the dividend every year, but at least not cut it (keeping the div unchanged in bad years eliminates companies from being a DG stock).

some of these names are like
Boeing, Exelon, and all the big canadian banks


DG is not so much a filter, but more of a way to find companies with certain hard-to-measure attributes that make them very favorable to long term investors. things like culture, commitment to return of capital to shareholders, business segment, business economic moat, are hard to measure with traditional filters, but DG companies exhibit some, and in some cases, all of these.

[rob444]

I have $20K to invest, and want to put it entirely into a safe, self-managed dividend portfolio. I'm looking for some decent dividend yields, but with a less volatile stock price. I have only limited experience with dividend stocks, so have been researching and am looking at some Canadian aristocrat type stocks to buy, which seem to me generally safer.

I'm thinking to put 50% Cdn banks, 25% energy and 25% telecom. So far I have come up with:

Banks - $5K BNS + $5K TD
Telecom - $5K SJR
Energy - $5K TRP

Over the next year I will be putting more and more money into dividend stocks, so can diversify more.

Any general advice or suggestions here on the first $20K? (i.e. not diversified enough, different sectors, better company choices etc etc)

Thanks!

[FiNaL WaR]

I have $20K to invest, and want to put it entirely into a safe, self-managed dividend portfolio. I'm looking for some decent dividend yields, but with a less volatile stock price. I have only limited experience with dividend stocks, so have been researching and am looking at some Canadian aristocrat type stocks to buy, which seem to me generally safer.

I'm thinking to put 50% Cdn banks, 25% energy and 25% telecom. So far I have come up with:

Banks - $5K BNS + $5K TD
Telecom - $5K SJR
Energy - $5K TRP

Over the next year I will be putting more and more money into dividend stocks, so can diversify more.

Any general advice or suggestions here on the first $20K? (i.e. not diversified enough, different sectors, better company choices etc etc)

Thanks!

i would take BCE anyday over SJR

[charliebrown]

I have $20K to invest, and want to put it entirely into a safe, self-managed dividend portfolio. I'm looking for some decent dividend yields, but with a less volatile stock price. I have only limited experience with dividend stocks, so have been researching and am looking at some Canadian aristocrat type stocks to buy, which seem to me generally safer.

I'm thinking to put 50% Cdn banks, 25% energy and 25% telecom. So far I have come up with:

Banks - $5K BNS + $5K TD
Telecom - $5K SJR
Energy - $5K TRP

Over the next year I will be putting more and more money into dividend stocks, so can diversify more.

Any general advice or suggestions here on the first $20K? (i.e. not diversified enough, different sectors, better company choices etc etc)

Thanks!

Banks - can't disagree with TD; if you're willing to consider financial services as a sector, we've been a long-time holder of DH (i.e. the cheque printing company)
Energy (commodity-related), our money is in PBN; so I won't be complaining too much when oil goes back above $100. Volatility is much higher, but you're compensated via a higher dividend, paid monthly.
Energy (services), our money is in SVY & PSN; did own ALA after the crash in 2009 and exited last year.
Telecom allocation is in MBT, although our position has been gradually decreasing with the recent run-up in price.

[Soda Popinski]

I have $20K to invest, and want to put it entirely into a safe, self-managed dividend portfolio. I'm looking for some decent dividend yields, but with a less volatile stock price. I have only limited experience with dividend stocks, so have been researching and am looking at some Canadian aristocrat type stocks to buy, which seem to me generally safer.

I'm thinking to put 50% Cdn banks, 25% energy and 25% telecom. So far I have come up with:

Banks - $5K BNS + $5K TD
Telecom - $5K SJR
Energy - $5K TRP

Over the next year I will be putting more and more money into dividend stocks, so can diversify more.

Any general advice or suggestions here on the first $20K? (i.e. not diversified enough, different sectors, better company choices etc etc)

Thanks!


I think TD will perform favourably compared to the other big banks but their dividend payout is only 3.5%. I'd replace TD with BMO, which had a dividend of 5.1% and they've been doing well lately.

I'd also replace SJR with BCE. BCE's dividend is currently 5.2% & Shaw's is 4.8%.

TRP looks like a good stock.

This site is usually a good reference for dividends - http://www.ca.dividendinvestor.com/

What do you guys think of XBB? The dividend is only 3.5% but it's performed well over the years.

[brunes]

dividend growth (DG) = growth of the dividend over time.
not yield, not relative to stock price, absolute value (adjusted for stock splits and what not). im not sure where you got that concept of growth with respect to price, but it makes zero sense, because it implies yield plays into determining whether a stock is a DG stock or not, which is 100% false.

Dividends are always relative to market value. To think otherwise is nonsense. If a company grows it's dividend by 10% in a year at the expense of it's market cap, then that was a poor move and you likely ended up on the short end of the stick as a shareholder.



typical well known DG stocks
J&J, Kimberly Clark, Procter, Coke, Pepsi, 3M, Exxon, AT&T, McDonalds, Walmart, Colgate

Yes but... all of these companies are also constantly growing their market cap.

The whole reason people buy dividend stocks vs. growing companies is for the tax-advantaged cash-flow. If a company has a 100 million market cap and pays a 5% dividend, and that company never grows in any substantial way (but it does maintain healthy and stable), then why on earth would you expect it to increase it's dividend? It would not be sustainable to think that a company that is not growing should increase it's dividend, it makes no sense. But just because a company is not growing does not mean it is not a nice safe place to park money.

Anyway... here is what I have in my dividend portfolio... it's doing pretty good so far this year. A couple of the stocks are beaten up a tiny bit but I suspect they will recover along with the broader market. SLF I think is a buying opportunity and I will be picking up more of it.

Boston Pizza / BPF.UN, Canadian Helicopters / CHL.A, Chemtrade Logistics / CHE.UN, Chrous Aviation / CHR.A, Corous Entertainment / CJR.B, TD, Transcanada / TRP, Sun-Life / SLF, Big Rock Brewery / BR, Bell Aliant / BA, Horizons Gold Income / HEP

[McClane]

Dividends are always relative to market value. To think otherwise is nonsense. If a company grows it's dividend by 10% in a year at the expense of it's market cap, then that was a poor move and you likely ended up on the short end of the stick as a shareholder.
I'm pretty sure that the concept of dividend growth is what Cerenity mentioned, the absolute growth of the dividend itself.

Say, McDonalds, it pays 70c this year, 61c last year, 55c in 2010, etc. That's the dividend growth there. I agree with you if we were talking about yield growth, but this is an absolute value.

http://www.dividendstocksonline.com/2011/05/the-dividend-growth-model/

The idea is that your personal dividend yield, relative to your original investment, will grow over long periods of time just because the company keeps boosting the dividend.

Anyways, I have the following:

McDonalds
BCE
ATT
Verizon
Pepsi
GE
Novartis
BP
Wal-Mart
Procter & Gamble
Philip Morris

[Cerenity]

i prefer looking for dividend sustainability and growth over chasing raw yield, and replace either BCE or SJR with RCI.B. i do like the other two picks of BNS and TD though. i consider them best of breed in canada when it comes to banking business.

[rob444]

Is there a particular strategy in terms of what % of your portfolio you should dedicate to each company?

i.e. in my case i am starting my divivend portfolio with only $20K, and was thinking to put $5K into 4 companies. Is there any reason to suggest splitting this into smaller purchases of more companes/sectors to diversify a bit more is better... or just a waste of trade commissions at this point?

[Stryker]

Telecom - $5K SJR


Actually I've known for some time that Standard & Poor's (http://ca.ishares.com/product_info/fund/holdings/XIU.htm) does not list Shaw in the Telecom sector along with BCE and Telus, but in the Consumer Discretionary sector.

[Sauerkraut]

Is there a particular strategy in terms of what % of your portfolio you should dedicate to each company?

i.e. in my case i am starting my divivend portfolio with only $20K, and was thinking to put $5K into 4 companies. Is there any reason to suggest splitting this into smaller purchases of more companes/sectors to diversify a bit more is better... or just a waste of trade commissions at this point?

For me, nothing > 10%...if a particular stock rises, then I rebalance/sell. Although my portfolio is much larger than yours.

To each his own.

[rob444]

For me, nothing > 10%...if a particular stock rises, then I rebalance/sell. Although my portfolio is much larger than yours.

To each his own.

By next year the total portfolio should be in the $80-$100K range. At that point i would agree with you... that a 10% max on any single stock would be the target.

I was also looking at getting my dividend exposure through an ETF instead. Something like CDZ or XDV. Although the MERs are in the 0.65% range, which based on more of a buy&hold strategy would be more expensive than the trade commissions per year to do some minor rebalancing, although the ETFs should be less volatile due to their diversification.

Can anyone advise if the tax implications/dividend payments of an ETF vs individual stocks differs any?

[Stryker]

Is there a particular strategy in terms of what % of your portfolio you should dedicate to each company?

i.e. in my case i am starting my divivend portfolio with only $20K, and was thinking to put $5K into 4 companies. Is there any reason to suggest splitting this into smaller purchases of more companes/sectors to diversify a bit more is better... or just a waste of trade commissions at this point?

I'm not trying to play analyst and I'm also sector oriented, so for me, it depends on how many dividend growth stocks I have to choose from for each Canadian sector. I keep each of my seven sector allocations fairly even in percentage terms. My maximum buy target for each equity is 5% with the lowest set at 2%, although that could change.

[morpheiz]

My fellow Dividend investors, I've just started investing in dividend growth companies in my TFSA and RRSP.
Can you please critique my portfolio? I've bought during the recent dip in May but I admit I could've waited until July/August for further dips to get in and wait for the eurozone resolution.

Market value

Energy infrastructure - 13%
- Altagas ALA - 6%
- IPL.UN - 7%

Energy - 42%
- PWT - 13.7%
- CVX - 7%
- ECA (from 2009) - 21% - Purchased when it was $33 :( Held for awhile and then NG dropped. Waiting for recovery.

Financials - 7%
- RY - 7%

REIT - 7%
- H&R HR.UN - 7%

Consumer - 13%
- MCD - 7%
- JNJ - 6%

Telecom
- TEF ADR - 12% - speculative buy for Spain recovery. Currently down 22% :(

Cash - 6%

So as you can see, there are some unwise investments such as in TEF, bought at $15 when it dropped, yet it turned out I caught a falling knife and now it's 11.
Encana, I bought a rather large position when I first started investing and that was when NG was at a peak so I'm down about 42% with his holding.
Regardless, I'm too heavy on the energy sector right now and I need to diversify. I'm thinking more Canadian companies like another bank (BNS, BMO) or telecom (BCE or T) and possibly more defensive American companies for my RRSP like PM, KO or PEP.
I've traded PWT a few times before and it's historically low right now with a rather high yield of ~7%. This will be a trade as opposed to a buy and hold dividend growth holding.

I would like to see what people think of my portfolio and where I should rebalance or if I should go heavy a particular sector. This is a long term portfolio so I'm looking for capital preservation and dividend growth. Yet, I'm willing to do short term trades for high risk high reward like PWT and TEF (probably not short term anymore).

1) Should I replace IPL.UN with ENB (overvalued) or TRP? IPL.UN dropped ~3% yesterday so I bought it. But today it kept dropping while other pipelines were flat.
2) Any stocks you think I should replace with another one for dividend growth?

[brunes]

M
I would like to see what people think of my portfolio and where I should rebalance or if I should go heavy a particular sector. This is a long term portfolio so I'm looking for capital preservation and dividend growth. Yet, I'm willing to do short term trades for high risk high reward like PWT and TEF (probably not short term anymore).

1) Should I replace IPL.UN with ENB (overvalued) or TRP? IPL.UN dropped ~3% yesterday so I bought it. But today it kept dropping while other pipelines were flat.
2) Any stocks you think I should replace with another one for dividend growth?

My input - You have some US stocks in there (MCD and JNJ). If they are not in an RSP, you should try to stick with Canadian stocks in your dividend portfolio, due to the dividend tax credit - which you will not get with US holdings. General rule of thumb for "where to hold what" is Canadian dividend stocks in unregistered, US dividend stocks in RSP (due to dividend tax treaties which don't apply in TFSA), and use your TFSA and RSP room for Canadian and US growth stocks.

The question is - what is a good Canadian replacement for mass-market consumer? I would look at RET and BPF.UN or AW.UN. Or if you are into brewerys there are some good dividend plays there too (I have Big Rock)

[charliebrown]

Energy infrastructure - 13%
- Altagas ALA - 6%
- IPL.UN - 7%

Energy - 42%
- PWT - 13.7%
- CVX - 7%
- ECA (from 2009) - 21% - Purchased when it was $33 :( Held for awhile and then NG dropped. Waiting for recovery.

Financials - 7%
- RY - 7%

REIT - 7%
- H&R HR.UN - 7%

Consumer - 13%
- MCD - 7%
- JNJ - 6%

Telecom
- TEF ADR - 12% - speculative buy for Spain recovery. Currently down 22% :(

Cash - 6%



The whole oil & gas trust sector has been pretty hard hit in the last month. The only one in my portfolio that's holding up is TBE (much smaller version of Baytex i.e. heavy oil vs the typical light oil or mixed oil & gas producer)
PWT has dropped quite a bit, so I don't think you can go wrong with it; I've put my money into PBN based on its higher oil weighting & higher operating margins (I think 2nd only to Crescent Point).
We also have a little bit of money in NAE, which is being rolled into Pengrowth after today.

I'm also hoping that Europe doesn't explode through my FTE ADR (France Telecom, aka Orange). The actual share price over in Europe has been holding up relatively well in the last month, but the downturn in the EUR FX is hurting right now.

[morpheiz]

My input - You have some US stocks in there (MCD and JNJ). If they are not in an RSP, you should try to stick with Canadian stocks in your dividend portfolio, due to the dividend tax credit - which you will not get with US holdings. General rule of thumb for "where to hold what" is Canadian dividend stocks in unregistered, US dividend stocks in RSP (due to dividend tax treaties which don't apply in TFSA), and use your TFSA and RSP room for Canadian and US growth stocks.

The question is - what is a good Canadian replacement for mass-market consumer? I would look at RET and BPF.UN or AW.UN. Or if you are into brewerys there are some good dividend plays there too (I have Big Rock)

Indeed I do have all american stocks in RSP and Canadian in RSP and TFSA.
I was looking at BPF.UN and KEG.UN. They have run up quite a bit over the past year. I'll see if BPF.UN drops a bit. But I do like having some exposure to American stocks due to their dividend aristocrat status and their ability to recover like what we saw during the Great Depression of 2008-2009.

[brunes]

Indeed I do have all american stocks in RSP and Canadian in RSP and TFSA.
I was looking at BPF.UN and KEG.UN. They have run up quite a bit over the past year. I'll see if BPF.UN drops a bit. But I do like having some exposure to American stocks due to their dividend aristocrat status and their ability to recover like what we saw during the Great Depression of 2008-2009.

OK. I guess when I think "dividend portfolio" I think "income portfolio" which usually means not registered. In my registered portfolio, while I do have a couple of companies that pay dividends, for the most part I am targeting capital growth.

[McClane]

Indeed I do have all american stocks in RSP and Canadian in RSP and TFSA.
Why does that make a difference?

[brunes]

Why does that make a difference?

Because Canadian dividend payments are not taxable inside a registered plan, and US dividends are not subject to withholding tax in an RSP, but they are in a TFSA.

[McClane]

Because Canadian dividend payments are not taxable inside a registered plan, and US dividends are not subject to withholding tax in an RSP, but they are in a TFSA.
Thanks. It's god to know. I'll just start using TFSAs and was going to buy US securities there.

[Kaitlyn]

The question is - what is a good Canadian replacement for mass-market consumer? I would look at RET and BPF.UN or AW.UN. Or if you are into brewerys there are some good dividend plays there too (I have Big Rock)

Doesn't BPF pay a dividend that is treated differently tax-wise? Thought I read something like that...

[SkimGuy]

Thanks. It's god to know. I'll just start using TFSAs and was going to buy US securities there.

There's withholding tax in US dividends in TFSAs...I'll link you a site tomorrow, it was on Canadian couch potato named "put your assets in their place" or something to that effect... It showed you how to build your portfolio in such a way yo maximize gains and minimize taxes

[ccyk]

for my parents:CVX, STO, WMT, SU, TD, BMO, BNS, 0823.hk


my personal holdings are just 2 stocks, CEN and MMT. MMT will/should/may/might start dividend next month with their crazy high cashflow.

[Stryker]

There's withholding tax in US dividends in TFSAs...I'll link you a site tomorrow, it was on Canadian couch potato named "put your assets in their place" or something to that effect... It showed you how to build your portfolio in such a way yo maximize gains and minimize taxes

Canadian Couch Potato (Put Your Assets in Their Place) (http://canadiancouchpotato.com/2010/03/05/put-your-assets-in-their-place/)

[brunes]

Thanks. It's god to know. I'll just start using TFSAs and was going to buy US securities there.

Yeah this is one of the non-obvious differences in the TFSA vs. RSP, and honestly IMO it is not talked about enough by people hawking the product to you.

TFSA is still a great tool, but people need to be aware of the tax treatment vs. RSP.

Hopefully the next time we negotiate tax treaty with the USA it will be included along with the RSP as not subject to withholding tax.


Doesn't BPF pay a dividend that is treated differently tax-wise? Thought I read something like that...

Not since 2011

[ccyk]

MMT will/should/may/might start dividend next month with their crazy high cashflow.

nice, MMT announce first dividend today 0.10/share, and regular dividend 0.05/share starting next quarter
the regular dividend is close to 16.2% yield at current share price$1.30, even after a 23% daily gain today!

[Asheron]

RY - bank
POW - financial
SU - oil
POT - ag
ABX - gold
SVM - silver
TRP - pipeline
BCE - telco
THI - staples
CTC - retail

Some of them don't pay a lot.

[brunes]

I bought a bunch of BNP the other day. Pays a great dividend and IMO has quite a bit of upside. If you are of the opinion that gas can't stay low forever, it's a good buy IMO, dividend looks sustainable at current levels.

[Kaitlyn]

I bought a bunch of BNP the other day. Pays a great dividend and IMO has quite a bit of upside. If you are of the opinion that gas can't stay low forever, it's a good buy IMO, dividend looks sustainable at current levels.

Me too - I bought at a few points and my average is at $15.05. Nice ride today - let's hope it continues tomorrow!

Of all my stocks, I actually hold the most BNP :)

I might have chased the dividend on this one, but let's hope it pays off!

P.S. What's "a bunch"?

[Xiaohaibao]

I also hold BNP but I bought at $24 a few months ago. :(

I have PGF that I bought at $11, it's now 6 something. :cry:

Can't add more to average down cause my TFSA is full.

Other than that, BMO, BCE, MG, SU, COS, CUS, REI, IPL, MFC, HEE, IMG. I think those are all the ones I have that pay dividend.

Thankfully no RIM in my portfolio. :)

[charliebrown]

Me too - I bought at a few points and my average is at $15.05. Nice ride today - let's hope it continues tomorrow!

Of all my stocks, I actually hold the most BNP :)

I might have chased the dividend on this one, but let's hope it pays off!

P.S. What's "a bunch"?

Owned BNP at around $21; got out when i saw seeing all the insiders sell (and continued to sell over the last 3 mths)

Unfortunately took the $$ and bought into ERF; still waiting to get back to my ACB in the $14.50 range (nice bump today thx to PRQ)

Anyone picking up AGF? 10% yield on an asset mgr -- granted, its profits have been dropping

[DrXenon]

What would folks recommend for a low-MER Canadian dividend ETF?

[rob444]

I've just over the past few months started a dividend portfolio mainly to do the SM with, and some in my TFSA. So far I have:

28% BNS - 4.22% yield
27% BMO - 5.04% yield
16% BCE - 5.2% yield
16% TRP - 4.13% yield
10% COS - 7.45% yield
3% MFC - 4.83% yield

Total weighted yield: 4.9%

I am going for both a decent yield but also stability and slow growth of the stocks. As i fund more into the portfolio in the next year, i'll spread out into other sectors.

Any comments/advice appreciated!

[angelok]

Agree with you 100%

And I don't know how you can buy Riocan at these levels. lol

What's wrong with Riocan?

[hammer]

Call me lazy but I like to keep it ultra simple. Consequently, i have been buying only RY for the last 5 years on dips and I don't plan to sell until I retire. I find that it tracks well with most mutual funds and the TSE index. Getting a nice dividend every few months is nice and I want the price to go down so I can buy more as I am in the accumulating stage still.

[Sauerkraut]

Call me lazy but I like to keep it ultra simple. Consequently, i have been buying only RY for the last 5 years on dips and I don't plan to sell until I retire. I find that it tracks well with most mutual funds and the TSE index. Getting a nice dividend every few months is nice and I want the price to go down so I can buy more as I am in the accumulating stage still.

Nothing wrong with RY...I also own it. But I don't recommend putting all your eggs in one basket by buying "only RY". You need to spread out your risk

[SkimGuy]

I've just over the past few months started a dividend portfolio mainly to do the SM with, and some in my TFSA. So far I have:

28% BNS - 4.22% yield
27% BMO - 5.04% yield
16% BCE - 5.2% yield
16% TRP - 4.13% yield
10% COS - 7.45% yield
3% MFC - 4.83% yield

Total weighted yield: 4.9%

I am going for both a decent yield but also stability and slow growth of the stocks. As i fund more into the portfolio in the next year, i'll spread out into other sectors.

Any comments/advice appreciated!

Dang looks good. Wish I had a Dividend portfolio :(

Also, would you guys suggest taking a bunch of separate companies in different sectors with good growing dividends, or just a high yield ETF? Would decrease the transaction costs but no control over sector etc.

[Gabriella]

I've just over the past few months started a dividend portfolio mainly to do the SM with, and some in my TFSA. So far I have:

28% BNS - 4.22% yield
27% BMO - 5.04% yield
16% BCE - 5.2% yield
16% TRP - 4.13% yield
10% COS - 7.45% yield
3% MFC - 4.83% yield

Total weighted yield: 4.9%

I am going for both a decent yield but also stability and slow growth of the stocks. As i fund more into the portfolio in the next year, i'll spread out into other sectors.

Any comments/advice appreciated!

You have close to 60% in financials alone which exposes yourself to unnecessary risk. Other than that you could benefit from another utility or pipeline.

[rob444]

You have close to 60% in financials alone which exposes yourself to unnecessary risk. Other than that you could benefit from another utility or pipeline.

Yes... that was my intention to start with the big banks and work out from there.

Next couple of purchases will probably be in communications and energy/utilities... am looking at POW, TA, HSE, SJR. After that should only be around 30-40% financials which is my target. It's a long term strategy so historically at least Canadian financials seem like a good segment to base a good chunk of the portfolio in.

[Cerenity]

if you want top tier dividend and/or dividend growth businesses, you have to get exposure to US markets

i understand people are hesitant to get FX exposure, so stay away from US equities, and favor canadian ones, but you really are missing out on the best of breed, cream of the crop.

i've found when doing screeners in the past that most of the time, even the best dividend growth companies on the TSX will be missing at least 1-2 attributes i look for.

instead of getting sub par stuff just to fill out your portfolio, focus on whats good in canada (telecoms, banks, transports, resources), and get the rest from the US.

[brunes]

if you want top tier dividend and/or dividend growth businesses, you have to get exposure to US markets

i understand people are hesitant to get FX exposure, so stay away from US equities, and favor canadian ones, but you really are missing out on the best of breed, cream of the crop.


The reason people avoid US dividend stocks for the most part has nothing to do with FX exposure at all, it has to do with the tax treatment. Paying 50% higher taxes on the gains quickly negates almost any benefit US dividend stocks would have over their Canadian counterparts.

[ccyk]

The reason people avoid US dividend stocks for the most part has nothing to do with FX exposure at all, it has to do with the tax treatment. Paying 50% higher taxes on the gains quickly negates almost any benefit US dividend stocks would have over their Canadian counterparts.

do it in rrsp/tfsa/already paying max tax rate

look at our largest canadian oil su 1.7% (shameful) vs cvx 3.4% (norm) vs tot 5.8% (international)

[rob444]

do it in rrsp/tfsa/already paying max tax rate

Unfortunately not always possible for people that have reached limits on rrsp/tfsa... or that are doing something like the SM which does not allow tax sheltered accounts but in which dividends are a common strategy.

[Cerenity]

do it in rrsp/tfsa/already paying max tax rate

look at our largest canadian oil su 1.7% (shameful) vs cvx 3.4% (norm) vs tot 5.8% (international)

yep, well minus TFSA part. i think US divs withholding tax in TFSA is unrecoverable.

RRSP room is plenty for a core set of US holdings with above avg yield, good div growth, stable business, that can be your long term holdings. and keep the ones with lower yields and more capital gains outside RRSP in a taxable account.

i wouldnt trade the higher quality businesses from US for lower taxes myself.

[Sauerkraut]

RRSP room is plenty for a core set of US holdings with above avg yield, good div growth, stable business, that can be your long term holdings

No, not always. I have very little RRSP room due to pension adjustment levels.

[brunes]

do it in rrsp/tfsa/already paying max tax rate

look at our largest canadian oil su 1.7% (shameful) vs cvx 3.4% (norm) vs tot 5.8% (international)

For one... if your RSP is maxed then this is not an option.

For two, if you hold US dividend-producing stocks in a TFSA, they will be subject to US withholding tax - yet another eating into your earnings, to the tune of 15%.

For three, most brokerages do not have US dollar account options in their RSP (Questrade is one exception, not sure of others). If you can not have a US dollar account in your RSP, then you will get dinged with forex charges on each and every dividend payment. This will basically cancel out the difference you are seeing.

[ccyk]

For one... if your RSP is maxed then this is not an option.

For two, if you hold US dividend-producing stocks in a TFSA, they will be subject to US withholding tax - yet another eating into your earnings, to the tune of 15%.

For three, most brokerages do not have US dollar account options in their RSP (Questrade is one exception, not sure of others). If you can not have a US dollar account in your RSP, then you will get dinged with forex charges on each and every dividend payment. This will basically cancel out the difference you are seeing.

no way...even after the 15%, us dividend is more attractive. plus there are foreign tax credit to recover some money back.
and just open rrsp in questrade then, it is free...

in suncor vs us chevron, chevron's dividend is double of suncor's, so even after 15% tax and 5% forex charge, it is still more attractive. just an example.

as for rrsp max out, try share swap ?

[brunes]

no way...even after the 15%, us dividend is more attractive. plus there are foreign tax credit to recover some money back.
and just open rrsp in questrade then, it is free...

What tax credit are you referring to? As far as I know - there is no way you are going to get that 15% claw-back back.


as for rrsp max out, try share swap ?

Like others mentioned, when your RSP is maxed because of your pension this is not an option.

[Stryker]

I'm getting an average dividend yield of well over 3% on the four Canadian energy stocks I own, and all with dividends growing faster than inflation, so I'm not complaining.

[charliebrown]

What tax credit are you referring to? As far as I know - there is no way you are going to get that 15% claw-back back.



Like others mentioned, when your RSP is maxed because of your pension this is not an option.

If you own foreign stocks in a non-registered plan (ie cash or margin account), you can claim a deduction for foriegn withholding taxes paid.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns409-485/405-eng.html

[ccyk]

What tax credit are you referring to? As far as I know - there is no way you are going to get that 15% claw-back back.



Like others mentioned, when your RSP is maxed because of your pension this is not an option.

get an accountant dude, at least for 1 year to fix it up.

yea pension sucks, always underfunded and under perform.

[ccyk]

just think of something, sell before ex-div day and back buy a day later. will that work for those US dividend plays? I have not put time to research it. anyone know if it work?

[Cerenity]

in theory it doesnt work for anything, because all else equal, the value of a dividend payout is immediately removed from the price of the underlying asset
but stock price on 2 different days doesnt quite reflect all things equally, because there is overnight news, etc.

its most noticeable on ADRs of companies that do once a year or bi-annual dividend payouts, that also have large numerical payout number. for example if you look at something like NVS, which is the ADR of swiss health care company Novartis, you'll see the stock drop the day after ex-div passes.

ie: Novartis around ex div date (http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Logarithmic&chdeh=0&chfdeh=0&chdet=1334088000000&chddm=24121&chddi=86400&chls=Ohlc&q=NYSE:NVS&ntsp=0)

[S5]

just think of something, sell before ex-div day and back buy a day later. will that work for those US dividend plays? I have not put time to research it. anyone know if it work?

Let's generate cap gains taxes everytime a dividend is paid in order to avoid paying taxes on a dividend. What's more in the event we were in a loss position and could actually create a capital loss let's buy the security back a day later and render that cap loss ineligible due to the superficial loss rule.

And you're the one telling others to go see an accountant!

[SkimGuy]

Let's generate cap gains taxes everytime a dividend is paid in order to avoid paying taxes on a dividend. What's more in the event we were in a loss position and could actually create a capital loss let's buy the security back a day later and render that cap loss ineligible due to the superficial loss rule.

And you're the one telling others to go see an accountant!

Was laughing the entire time LOL

[ccyk]

Let's generate cap gains taxes everytime a dividend is paid in order to avoid paying taxes on a dividend. What's more in the event we were in a loss position and could actually create a capital loss let's buy the security back a day later and render that cap loss ineligible due to the superficial loss rule.

And you're the one telling others to go see an accountant!

huh? come on, use your brain and think. is it so hard to switch to another stock once a year to realize all the loss, if any?
if there is cap gain, thats even better, pay less tax at 50% reduced rate. or do you prefer more loss? or pay higher tax on foreign dividend?

[ccyk]

in theory it doesnt work for anything, because all else equal, the value of a dividend payout is immediately removed from the price of the underlying asset
but stock price on 2 different days doesnt quite reflect all things equally, because there is overnight news, etc.

its most noticeable on ADRs of companies that do once a year or bi-annual dividend payouts, that also have large numerical payout number. for example if you look at something like NVS, which is the ADR of swiss health care company Novartis, you'll see the stock drop the day after ex-div passes.

ie: Novartis around ex div date (http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Logarithmic&chdeh=0&chfdeh=0&chdet=1334088000000&chddm=24121&chddi=86400&chls=Ohlc&q=NYSE:NVS&ntsp=0)

of course I am not talking about theory. I dont have real historical trading data to know if that work or not.
say for last 10 years, selling on ex and buy back the next day, the average return for s&p500 companies, comparing to dividend in the same period. it would be nice if there is some research on that.

[S5]

huh? come on, use your brain and think. is it so hard to switch to another stock once a year to realize all the loss, if any?
if there is cap gain, thats even better, pay less tax at 50% reduced rate. or do you prefer more loss? or pay higher tax on foreign dividend?

As usual you don't have a clue what you're talking about and feel the need to belittle others who do. I've used tax loss harvesting strategies on many occasions and have even avoided foreign dividends in certain cases where it made sense.

Crystallizing large cap gains in order to save smallish dividends is simply terrible tax planning.

Nothing but garbage posts from you when it comes to investing. I'd be laughing along with skimguy but there's the very real possibility someone less experienced might actually believe something you post.

[Cerenity]

of course I am not talking about theory. I dont have real historical trading data to know if that work or not.
say for last 10 years, selling on ex and buy back the next day, the average return for s&p500 companies, comparing to dividend in the same period. it would be nice if there is some research on that.

point is the data you'd collect is meaningless, because it wouldnt represent the result of trading around ex-div. it would contain other data points, which completely undermines your trade basis.
if the time it took to go ex-div was shrunk down to an instantaneous moment, where you could sell, ex-div instantly, and market reopens and you buy back 1 second later, all your action would accomplish is remove yourself from dividend eligibility.

thus, im not really sure what you're trying to accomplish.
are you hoping to avoid the tax, by avoiding the income altogether?

isnt that kind of like, hey, i dont want to pay income tax, so let me just quit my job?

[ccyk]

point is the data you'd collect is meaningless, because it wouldnt represent the result of trading around ex-div. it would contain other data points, which completely undermines your trade basis.
if the time it took to go ex-div was shrunk down to an instantaneous moment, where you could sell, ex-div instantly, and market reopens and you buy back 1 second later, all your action would accomplish is remove yourself from dividend eligibility.

thus, im not really sure what you're trying to accomplish.
are you hoping to avoid the tax, by avoiding the income altogether?

isnt that kind of like, hey, i dont want to pay income tax, so let me just quit my job?

look like you dont get it. dividend is already priced in share price.

if there is no other factor affecting a stock, everything status quo, it should trade like a bond.
for example, stock A pay and ex-div semi annual dividend of $1 on jan1, and july1 every year. the year average of stock price is $10 forever assuming no change in econ, general market, other news.
on theory and ideal world without tax, price on jan 1 is 9.50, linearly increase to 10.50 to Jun 30, back to 9.50 on july 1 again and linearly increase to 10.50 on dec 31
person X is buy and hold. he gets $2 dividend every year
person Y dodges dividend day, he buys @9.5 and sell at 10.5 twice a year. getting $2 capital gain every year.

in the long long long long time of 10 years and further assume share price increase 10% per year, KISS simplified calculation:
person X get taxed on $2 dividend/year plus capital gain of 15.93 at end of year 10, total taxable income 27.97 in 10 years
person Y get taxed on average $3.59 capital gain/year, total taxable income 17.95 in 10 years
you can argue my tax is not discounted to present value, but I dont think it will change the number too much.
and also if marginal tax rate is taken into consideration, have income spread out maybe more advantages than one big income in one year.

[ccyk]

As usual you don't have a clue what you're talking about and feel the need to belittle others who do. I've used tax loss harvesting strategies on many occasions and have even avoided foreign dividends in certain cases where it made sense.

Crystallizing large cap gains in order to save smallish dividends is simply terrible tax planning.

Nothing but garbage posts from you when it comes to investing. I'd be laughing along with skimguy but there's the very real possibility someone less experienced might actually believe something you post.

lol why dont you run the number yourself?
1.like everything else in investing, there is no universal rule that fit all. people may have different tax credit and rates.

2. different people will have different result in concentrating large capital gain in a short time vs spreading it evenly.

3. one of the mistakes I made is to avoid capital gain and miss the selling opportunity at higher price.

your comments tell me as much about you lol.

[Cerenity]

look like you dont get it. dividend is already priced in share price.

if there is no other factor affecting a stock, everything status quo, it should trade like a bond.
for example, stock A pay and ex-div semi annual dividend of $1 on jan1, and july1 every year. the year average of stock price is $10 forever assuming no change in econ, general market, other news.
on theory and ideal world without tax, price on jan 1 is 9.50, linearly increase to 10.50 to Jun 30, back to 9.50 on july 1 again and linearly increase to 10.50 on dec 31
person X is buy and hold. he gets $2 dividend every year
person Y dodges dividend day, he buys @9.5 and sell at 10.5 twice a year. getting $2 capital gain every year.

i think you just answered your own question


selling on ex and buy back the next day, the average return for s&p500 companies, comparing to dividend in the same period.

pertaining to taxes, dividend stripping can be illegal depending on where you live, because it is a form of tax evasion if it is arranged and set up by the owners

it makes sense to me there is no net benefit or loss from the 2 scenarios, because the scenario is just the opposite trade of the buy pre-div, and sell post-div dividend capture idea.