Best Dividend Paying Stock For Your TFSA

[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, 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.