Best Dividend Paying Stock For Your TFSA

[Daf]

The title says it all, if you could pick one stock and put a few grand in it for your TFSA, what would you pick?

[jt05mi]

LIQ - Liquor Stores N.A. Ltd

Recession Proof ;)

[cjottawa]

I'm curious: are you asking because this is something you would actually consider doing, Daf, or asking just for the sake of discussion?

[Daf]

A bit of both, actually

[rfdrfd]

REIT: REF.UN or REI.UN

IPL.UN

[ccyk]

MMT 13%+ dividend

[jt05mi]

MMT 13%+ dividend


MFS Multimarket Income Trust(NYSE:MMT)??

[angelok]

GRT and PKI...

[ccyk]

MFS Multimarket Income Trust(NYSE:MMT)??

mart resource inc mmt.v

[charliebrown]

If you can get your hands on these:

http://www.marketwire.com/press-release/birchcliff-energy-ltd-announces-40-million-offering-of-preferred-units-tsx-bir-1681001.htm

Each $25 unit includes:
8% preferred shrs (rate reset in 5 yrs)
3x warrants to buy shrs @ $8.30

This company was trading above $10 in 2011; tried to find a buyer, but offers not high enough

Insiders were loading up when they last did a bought deal in april 2012 (@ $7.65)

[Sanyo]

Liquor Stores (LIQ)
Cineplex (CGX)
Parkland Fuel (PKI)
Keg (keg.un)
any bank stock like TD or Scotiabank (BNS)

[Daf]

Thanks everyone for your replies.... Keep them coming!

Let's not forget, when we invest in the TFSA not only do we want high dividends, we want a stock that will not decrease in value.

[gomyone]

XCB - a little high on duration so exposed to more interest rate risk than I'd like but generally a good stable yield:

http://www.forbes.com/sites/dividendchannel/2012/06/22/dex-all-corporate-bond-index-fund-xcb-ca-shares-cross-4-yield-mark/

[SpillOnAisle9]

TMC - Timbercreek Mortgage Corp - holds multi-unit residential mortgages

[boipinoi604]

Thanks everyone for your replies.... Keep them coming!

Let's not forget, when we invest in the TFSA not only do we want high dividends, we want a stock that will not decrease in value.

High yields, stable principal.
Is that even possible?

[Sanyo]

Thanks everyone for your replies.... Keep them coming!

Let's not forget, when we invest in the TFSA not only do we want high dividends, we want a stock that will not decrease in value.

There is no such thing as a stock that will not decrease in value -- actually its quite silly to think that. If your in these for the long-term then go for it, if your some gic investor who wants a higher yield, you better not invest...

[ccyk]

High yields, stable principal.
Is that even possible?

maybe, but you have to wait for the dividend to growth.

[boipinoi604]

maybe, but you have to wait for the dividend to growth.

I was under the impression that in order to attain more market return, one has to take on more risk.
Higher yields and stable principal does not go hand in hand?

Also, correct me if I am wrong, but is it beneficial for those in the lower MTR to hold these dividend yielding COs in an unregistered account to take advantage of the negative tax rate?

Speaking of dividends, there is a strategy called the Dogs of DOW, which selects the top 10 dividend of the DOW and holding it for years. The equivalent of which is the Dogs of TSX, any of you guys into that strategy?

[ccyk]

I was under the impression that in order to attain more market return, one has to take on more risk.
Higher yields and stable principal does not go hand in hand?

Also, correct me if I am wrong, but is it beneficial for those in the lower MTR to hold these dividend yielding COs in an unregistered account to take advantage of the negative tax rate?

Speaking of dividends, there is a strategy called the Dogs of DOW, which selects the top 10 dividend of the DOW and holding it for years. The equivalent of which is the Dogs of TSX, any of you guys into that strategy?

yes, for high yield, it usually either come with high risk, or that market believe the yield is not sustainable (company will cut dividend in future).
sometimes, market is in fear as people dump all asset class. those stable average to low yield stocks will crash together with market. yield will increase as sp decrease. thats the time to pick up these stocks.
otherwise, when market return to normal, you have to buy in those average yield stock and wait for it to increase dividend to make your buy-in yield higher.
or you have to do analysis to discover stocks that is likely to increase dividend(that is when your analysis is right and market's is wrong as mispriced the stock)

[Cerenity]

1. i dont think the portfolio resulting from Dogs of the TSX 60 would be very diversified, unlike the Dow dogs. TSX is a less diverse index in nature vs the Dow

2. market returns are not correlated to risk, at least not the risk you're speaking of, which is price volatility risk. what market returns ARE correlated to, is the price at which you make the investment. in other words, the main determinant of future returns is the valuation paid for the asset.

given the above (number 2) it is certainly possible to obtain reasonably high yields along with stable principal. it may not be possible to find one at ANY given time, but it certainly has existed historically at SOME given time. since we're living in the era after the great recession, the easiest is to go back to 2009 and look at what you could have bought in the Feb to Apr time frame.

- Coke at a 4% yield
- AT&T at a 7% yield
- Telus at a 6.5% yield
- J&J at a 4% yield (heck you could still almost get this earlier this year when it was 62)
- Mcdonalds at a 4% yield

and this is without even having to go into financials. this is just sticking to consumer staples and non-cyclical businesses which are pretty safe. J&J's debt is rated higher than US government treasuries (only 4 companies left, ADP, Exxon, Microsoft, and J&J)

even today, i feel someone buying bonds is taking on much more overall risk than someone buying equities. similarly, i would not chase the high yield area as many are doing these days. high yield has significantly higher odds to get you burned.

what many newbie dividend investors are missing, that experienced dividend investors understand, is the crux of dividend investing isnt the dividend itself, but the corporate culture, business model, and long term business sustainability that comes with it. the continually growing dividend is just the RESULT of a company with those attributes

[Stryker]

I was under the impression that in order to attain more market return, one has to take on more risk.


According to this study (http://www.acadian-asset.com/documents/FAJArticleJanFeb2011.pdf), it's the opposite.

[boipinoi604]

1. i dont think the portfolio resulting from Dogs of the TSX 60 would be very diversified, unlike the Dow dogs. TSX is a less diverse index in nature vs the Dow

2. market returns are not correlated to risk, at least not the risk you're speaking of, which is price volatility risk. what market returns ARE correlated to, is the price at which you make the investment. in other words, the main determinant of future returns is the valuation paid for the asset.

given the above (number 2) it is certainly possible to obtain reasonably high yields along with stable principal. it may not be possible to find one at ANY given time, but it certainly has existed historically at SOME given time. since we're living in the era after the great recession, the easiest is to go back to 2009 and look at what you could have bought in the Feb to Apr time frame.

- Coke at a 4% yield
- AT&T at a 7% yield
- Telus at a 6.5% yield
- J&J at a 4% yield (heck you could still almost get this earlier this year when it was 62)
- Mcdonalds at a 4% yield

and this is without even having to go into financials. this is just sticking to consumer staples and non-cyclical businesses which are pretty safe. J&J's debt is rated higher than US government treasuries (only 4 companies left, ADP, Exxon, Microsoft, and J&J)

even today, i feel someone buying bonds is taking on much more overall risk than someone buying equities. similarly, i would not chase the high yield area as many are doing these days. high yield has significantly higher odds to get you burned.

what many newbie dividend investors are missing, that experienced dividend investors understand, is the crux of dividend investing isnt the dividend itself, but the corporate culture, business model, and long term business sustainability that comes with it. the continually growing dividend is just the RESULT of a company with those attributes

I was saying, you can not get high dividends with a stock that doesn't decrease in value as what DAF was requires.

Looking at those percentage of high dividends stocks of 4-6%, if one requires high dividends with a principal which doesn't decrease, one would be better off in a different investment vehicle other than stocks. Like say GICs, Bonds?

2). Yea that make sense. Returns are related to the price you have paid for an investment and what you can get it for in the future.

[Daf]

With the market comes risks, I understand that... What I am looking for is a stock where I can put in my TFSA for years or even a year that will give me good value for my buck!

[cmackie]

MKP MCAN Mortgage is a pretty solid dividend generator. Nice low beta. Some concern from the latest guidance but about as steady as they come.

[JUnit]

MKP MCAN Mortgage is a pretty solid dividend generator. Nice low beta. Some concern from the latest guidance but about as steady as they come.

I have some MKP in my TFSA too. Pays a nice quarterly dividend, with a special dividend annually. The dividends don't qualify for the dividend tax credit, so a TFSA seems like a good place to hold this. I also like that there is a small DRIP discount, as I am currently dripping my TFSA holdings to reduce the amount of cash stranded in that account.

[Daf]

Mkp???? Everything I'm reading says sell,sell,sell!

[Stryker]

With the market comes risks, I understand that... What I am looking for is a stock where I can put in my TFSA for years or even a year that will give me good value for my buck!

At one time, Nortel was regarded as giving good value for your buck. Why not? At over 10% of the index, it was the largest market cap stock in the TSX. Some investors put their life savings into this one company. It even paid a dividend, albeit with a very low yield.

[rfdrfd]

With the market comes risks, I understand that... What I am looking for is a stock where I can put in my TFSA for years or even a year that will give me good value for my buck!

Seriously, no one here can give you that answer. Besides how would you know that to be true or not? Until it is wrong = lose money. Everyone here is only telling you from things they've learned and heard. Unless someone here is a proven successful investor for 10yr+, then that person can be trusted more.

From what I learned, my instructors say every book other there teaches the wrong way for investing. They've given us plenty of examples on why those books were wrong. Almost everyone on BNN tv is wrong. Except for maybe Larry Berman, at least he's honest. The rest of those guys are all liers or really don't know what they are doing. talking about good valuation and multiples, and telling callers its a good value, when the stock prices has been dropping for 5 yrs consistently in a down trend. I feel so bad for those callers, trusting these crooks. Fundamentals only account for 20% of the movement of the stock price, remember that.

OP: what you need to do is, learn how to pick a stock, but have a stop loss level set. So it kicks you out when it reaches that point. Netflix was doing amazing for awhile, but suddenly crashed. So without any stop loss set, people holding it just gave back amazing gains and more.

[ronthecivil]

Why would you want to use your TFSA for dividend paying stocks?

Don't get me wrong owning many of the suggested picks here would be great for a big portion of your portfolio. But why worry about tax savings when the tax rate on dividends is so favourable?

I prefer to think of it as a tax free speculation account. It's the 20k (max) of your portfolio your willing to risk it all on! Do some value investing (YLO for example was 3 cents a share so I figured to buy another 10k shares). Sure, that might go to zero, but if it ever recovers, I won't be paying any capital gains taxes!

Keep the safer stuff in your RRSP or completely unsheltered IMO.

Good convo otherwise.

[angelok]

(YLO for example was 3 cents a share so I figured to buy another 10k shares). Sure, that might go to zero, but if it ever recovers, I won't be paying any capital gains taxes!

Good convo otherwise.

YLO is still generating a lot of cash flow. Desjardins has also upped the price target from .01 to .11 cents.

[SkimGuy]

Why would you want to use your TFSA for dividend paying stocks?

Don't get me wrong owning many of the suggested picks here would be great for a big portion of your portfolio. But why worry about tax savings when the tax rate on dividends is so favourable?

I prefer to think of it as a tax free speculation account. It's the 20k (max) of your portfolio your willing to risk it all on! Do some value investing (YLO for example was 3 cents a share so I figured to buy another 10k shares). Sure, that might go to zero, but if it ever recovers, I won't be paying any capital gains taxes!

Keep the safer stuff in your RRSP or completely unsheltered IMO.

Good convo otherwise.

There's pros and cons of holding cap gains vs dividends in TFSAs, as there are with all investment vehicles. For example, in TFSAs, you can't apply allowable capital loses against capital gains in that taxation year (if you sold at a loss) and the contribution room is lost forever.

[cmackie]

Mkp???? Everything I'm reading says sell,sell,sell!
I don't own it myself - I'm a fair bit more aggressive than what MKP puts on the table. But in terms of churning out some solid growing distributions with fairly low volatility, this isn't a bad bet. JUnit's on the money though - dividends get treated as interest income.

I'm also with ron personally - I keep my TFSA for aggressive plays - the tax dollars potentially saved appeal much more than saving some pennies on taxable interest.

I like to look at dividends to have something to talk about with my old man for the most part and because most of my clients deal with retirees, but all of my own investments are on the aggressive side focusing on momentum. The best defense is a solid offence.

[Terrific_Deals2k8]

PWT.TO or ERF.TO

[buy.A.gift]

Genivar

[brunes]

There's pros and cons of holding cap gains vs dividends in TFSAs, as there are with all investment vehicles. For example, in TFSAs, you can't apply allowable capital loses against capital gains in that taxation year (if you sold at a loss) and the contribution room is lost forever.

I would think in the majority of situations, the preferential tax treatment of the dividend income would be more important.

Rule of thumb IMO is

TFSA - Canadian capital gains
RSP - US dividends and US Capital gains
Non-registered - Canadian dividends and US capital gains

[gnuman]

I'm a big fan of Arc Energy and regret selling it when I did as I was in at around $22. The second offering caused the price to drop to $23 but it's a great stock to hold if you get in around $22-23 and it will hit again $25-26

[ccyk]

I'm a big fan of Arc Energy and regret selling it when I did as I was in at around $22. The second offering caused the price to drop to $23 but it's a great stock to hold if you get in around $22-23 and it will hit again $25-26

i just take a quick look at arc, I am not convinced, they are just barely able to keep production stable over the year on a per share basis. they grow production at the expense of share dilution. it provides no growth from production/share and is only riding oil price. may as well just buy oil ETF to reduce risk.

end of; outstanding share(M); production(boe)/d; barrel(boe) production per share for the year
2011; 286.6 ;83416 ;0.1062
2010; 264.2 ;73954 ;0.1022
2009 ;236.6 ;63538 ;0.0980
2008; 216.4 ;65126 ; 0.1098
2007 ;210.2 ;62723 ; 0.1089
2006; 204.3 ;63056 ; 0.1127

[rfdrfd]

I'm a big fan of Arc Energy and regret selling it when I did as I was in at around $22. The second offering caused the price to drop to $23 but it's a great stock to hold if you get in around $22-23 and it will hit again $25-26


i just take a quick look at arc, I am not convinced, they are just barely able to keep production stable over the year on a per share basis. they grow production at the expense of share dilution. it provides no growth from production/share and is only riding oil price. may as well just buy oil ETF to reduce risk.

end of; outstanding share(M); production(boe)/d; barrel(boe) production per share for the year
2011; 286.6 ;83416 ;0.1062
2010; 264.2 ;73954 ;0.1022
2009 ;236.6 ;63538 ;0.0980
2008; 216.4 ;65126 ; 0.1098
2007 ;210.2 ;62723 ; 0.1089
2006; 204.3 ;63056 ; 0.1127

Arc energy is in a sideways range for the longest time. Play is very simple. Keep doing it until it proves you wrong. Stops will let you know when you are wrong.
Buying and holding will get you no where. You'll break even if you are lucky.

http://img268.imageshack.us/img268/3931/33122257.jpg (http://imageshack.us/photo/my-images/268/33122257.jpg/)

Uploaded with ImageShack.us (http://imageshack.us)

[cjottawa]

Thanks everyone for your replies.... Keep them coming!

Let's not forget, when we invest in the TFSA not only do we want high dividends, we want a stock that will not decrease in value.


With the market comes risks, I understand that... What I am looking for is a stock where I can put in my TFSA for years or even a year that will give me good value for my buck!

Daf,
You indicated you want something for the long run, something that will generate a dividend but not decline in value.

I mention this because I don't think it's been suggested in this thread yet: buy index funds. (TD e-Series if you're with TD)

Yes, they'll throw off some dividends, not as much as an individual stock. However, they'll be much safer than speculating on an individual stock. Holding an index fund, you could go to sleep for 20 years and be reasonably assured your capital would be protected until you wake up.

[charliebrown]

PWT.TO or ERF.TO

good day for both :)

i think both are reporting tmr; nice recovery so far for ERF after bottoming out in the high 11 range

[Daf]

I'm not with TD, and still looking...lol... Thanks everyone.. I'm enjoying reading everyone's posts.

[simbella]

I would think in the majority of situations, the preferential tax treatment of the dividend income would be more important.

Rule of thumb IMO is

TFSA - Canadian capital gains
RSP - US dividends and US Capital gains
Non-registered - Canadian dividends and US capital gains

What about above average/high income earners? Would these rules still apply?

[red_skittles]

From what I learned, my instructors say every book other there teaches the wrong way for investing. They've given us plenty of examples on why those books were wrong. Almost everyone on BNN tv is wrong. Except for maybe Larry Berman, at least he's honest. The rest of those guys are all liers or really don't know what they are doing. talking about good valuation and multiples, and telling callers its a good value, when the stock prices has been dropping for 5 yrs consistently in a down trend. I feel so bad for those callers, trusting these crooks. Fundamentals only account for 20% of the movement of the stock price, remember that.

Strange that the people teaching a $7000 online investment course are the only ones who know how to properly invest and everyone else is either wrong or a liar....

[angelok]

Almost everyone on BNN tv is wrong. Except for maybe Larry Berman, at least he's honest. The rest of those guys are all liers or really don't know what they are doing. talking about good valuation and multiples, and telling callers its a good value, when the stock prices has been dropping for 5 yrs consistently in a down trend. I feel so bad for those callers, trusting these crooks. Fundamentals only account for 20% of the movement of the stock price, remember that.





Dude,

You are quite the entertainer.

ROLMFAO

[angelok]

Everyone else is either wrong or a liar....

LOL . Dont' forget that they are also Crooks..:D

[angelok]

Almost everyone on BNN tv is wrong. Except for maybe Larry Berman, at least he's honest. The rest of those guys are all liers or really don't know what they are doing. talking about good valuation and multiples, and telling callers its a good value, when the stock prices has been dropping for 5 yrs consistently in a down trend. I feel so bad for those callers, trusting these crooks.

On a more serious note, I have made a lot of money taking advise from these Crooks as you refer to them.. :-0

[Feneant]

Instead of doing another post I'll ask here... I have sold every mutual fund in my RRSPs since they have not done anything in years and am looking at dividend paying stocks instead. I assume it works the same but I'd prefer to remain with companies on the TSX (for not apparent reason).

I was looking at companies like Telus, Cineplex, Imperial Oil, Shopper's Drug Mart, Bank of Nova Scotia, Fortis, etc. so basically fairly safe companies in which to invest. But how am I to know which is the one for me?

The money I have to invest is peanuts (I put every penny I can save on the mortgage as I have a good pension plan) so I only have about 11000$ to invest and am thinking of buying 4 different stocks. The issue is Questrade's dividend purchase plan only does full shares and I don't know that my investment would be large enough for that so I likely wouldn't be able to do that.

But anyways, my question is how do I calculate which is the best stock for me to invest?

[hestati]

Index funds for you. Do not go individual stocks uneless you can predict the future.