Investing

Investing Idea - Dividend Growth

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  • Feb 19th, 2018 3:05 am
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Dec 14, 2010
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FlyOverMyDoodle wrote:
Jan 17th, 2018 11:40 pm
Dumb Q Rod but since dividends are paid out through cash and not earnings, if the company doesn't have positive earnings or constantly decreasing earnings, won't the cash eventually deplete unless I guess they get financing?
Not a dumb question at all. Technically, you can have declining earnings or negative earnings forever as long as you have positive cash flow. In reality it's difficult to implement that because costs can only go down so much, so if revenue starts to decline then eventually the company will be cash flow negative. But it's the cash flow, not earnings, that tells the ability to pay and sustain dividends. More specifically, cash flow from operations (not investing) and adjusted free cash flow. Companies don't have an obligation to pay dividends to common shares, so if after the dividends the company still have free cash flow, then it's a reasonable sign that it's sustainable, as it not only covers the outflow, but also shows that the company has cash left for investments and acquisitions. Hence the importance of a strong balance sheet and being well managed, and Cineplex got that. Given its cyclical nature, the strong cash flow allows them to continue rising dividends even when earnings / revenue aren't that great.


Rod
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Deal Addict
Nov 9, 2013
1992 posts
723 upvotes
Edmonton, AB
When you basically have a monopoly business, is it fair to blame factors outside of your control for poor earnings?

I think good management (and good companies) find a way in good and bad, and don't blame extrinsic factors for their poor execution.
Newbie
Aug 20, 2016
84 posts
47 upvotes
cinemark in the USA is a much better managed company and their stock has held up.
They do not have a monopoly.
They have the same slate of movies.
Maybe it is management.
Maybe going to the movies at a Cineplex is a horrible experience.
$10 popcorn, $10 drinks, $14 tickets.
They have a monopoly on movies in Canada so lets spend money on a business Rec Room where we have competition.
The company is not diversifing, it is diworsifing. Stay in the movie business you are poor copy of the Dave and Busters.
Newbie
Aug 20, 2016
84 posts
47 upvotes
Corus chart. There is no there, there.
Get ready for more pain.

Will be taken private by Shaw soon.
Shaw plundered Corus for money to get Wind Mobile.
Shaw family does not worry about shareholders.
Newbie
Aug 20, 2016
84 posts
47 upvotes
Corus Entertainment Inc Cl.B Nv (Instrument ExchangeTSX: Instrument SymbolCJR-B-T)
TSX REAL-TIME LAST SALE
7.97 CAD

TODAY'S CHANGE
-0.19decrease -2.33%decrease

VOLUME
404,207

PRICE QUOTE AS OF
11:14 ET
Newbie
Nov 20, 2016
79 posts
6 upvotes
For REITs that have a high dividend yield, should you be excluding any return of capital from the yield to get a true dividend yield? For example, in 2016 the Slate Office REIT (SOT-UN) had a 90.2% tax distribution of its dividends to return of capital. If you hold the units outside a registered account, when you sell the investment, doesn't the return of capital decrease your cost base so you would have a higher capital gain? So really the dividend yield should exclude the return of capital allocations. Right now Slate has a dividend yield of 9.48% but is this really a true dividend yield compared to a yield that could be earned on common shares? Does this have any merit? Thanks.
Member
Aug 14, 2010
410 posts
198 upvotes
Toronto
jerryhung wrote:
Jan 19th, 2018 10:45 am
There it is, CJR.B broke $8

Red day every day in 2018, and since ER

No words
C-C-C-COMBO BREAKER.
Jr. Member
Sep 18, 2016
115 posts
28 upvotes
hellohello wrote:
Jan 16th, 2018 9:56 pm
thanks and not questioning your credibility but would like to understand the basis for the 7ish price
there you go, took only 3 days to hit 7ish
"Just because it's illogical doesn't mean it can't continue to move up"
Jr. Member
Oct 17, 2015
139 posts
15 upvotes
Toronto, ON
I have two very simple, noob questions and will appreciate if anyone can advise me.
1. If the average return from dividend stocks/etfs portfolio is less than 4% then why even bother with it when market index funds can return 7%?
2. If YOU were to start creating your dividend portfolio today in a RRSP account with only $10000, what stocks or ETF (s) would you buy and how many?
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Aug 1, 2007
1315 posts
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jimmyho56 wrote:
Jan 19th, 2018 12:32 pm
For REITs that have a high dividend yield, should you be excluding any return of capital from the yield to get a true dividend yield? For example, in 2016 the Slate Office REIT (SOT-UN) had a 90.2% tax distribution of its dividends to return of capital. If you hold the units outside a registered account, when you sell the investment, doesn't the return of capital decrease your cost base so you would have a higher capital gain? So really the dividend yield should exclude the return of capital allocations. Right now Slate has a dividend yield of 9.48% but is this really a true dividend yield compared to a yield that could be earned on common shares? Does this have any merit? Thanks.
It should be referred to as distribution yield rather than dividend yield. ROC is tax-deferred income - cap gains are usually taxed at lower rates than dividends so it may be preferable depending on the individual as long as the company is growing enough to at least maintain total value. If the ROC is just causing it to decay into eventual nothingness then run away.
Jr. Member
Oct 17, 2015
139 posts
15 upvotes
Toronto, ON
AdsJoint wrote:
Jan 21st, 2018 10:50 am
I have two very simple, noob questions and will appreciate if anyone can advise me.
1. If the average return from dividend stocks/etfs portfolio is less than 4% then why even bother with it when market index funds can return 7%?
2. If YOU were to start creating your dividend portfolio today in a RRSP account with only $10000, what stocks or ETF (s) would you buy and how many?
Anyone?
Newbie
Aug 20, 2016
84 posts
47 upvotes
I have two very simple, noob questions and will appreciate if anyone can advise me.
1. If the average return from dividend stocks/etfs portfolio is less than 4% then why even bother with it when market index funds can return 7%?
2. If YOU were to start creating your dividend portfolio today in a RRSP account with only $10000, what stocks or ETF (s) would you buy and how many?
If I were starting out now. I would buy 80% iShares Core MSCI All Country World ex Canada Index ETF, 20% Vanguard Canadian Short-term Bond Index ETF VSB.
I would bu the whole market not just dividend stocks.
Through your work you will probably have some Canandian exposure or in your TFSA buy Canadian stocks.
I would not rebalance. Rebalancing is timing the market so it does not work.
Forget about hedging. Long term currencies do not matter.

At $10000 I would not buy stocks.
I have been investing for 33 years.
I am always surprised.
One of my stocks blows up every year. Hello Cineplex, DH Corporation etc.
Member
Feb 26, 2017
429 posts
133 upvotes
AdsJoint wrote:
Jan 23rd, 2018 7:40 am
Anyone?
I don't think anyone is going for 4% returns (I've done considerably better over the years).

I'd probably buy 2-3 stocks with 10k to keep your costs down.

The whole thread is basically a discussion on dividend stocks. Maybe look at the analysis and go with some of Rod's picks?

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