Investing

Investing Idea - Dividend Growth

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  • Nov 19th, 2020 5:54 pm
Member
Aug 20, 2016
370 posts
330 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.
Member
Aug 20, 2016
370 posts
330 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.
Member
Aug 20, 2016
370 posts
330 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
Jr. Member
Nov 20, 2016
151 posts
21 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.
Sr. Member
Aug 14, 2010
593 posts
366 upvotes
Toronto
jerryhung wrote: There it is, CJR.B broke $8

Red day every day in 2018, and since ER

No words
C-C-C-COMBO BREAKER.
Member
Sep 18, 2016
289 posts
235 upvotes
hellohello wrote: 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
Index Investors, the Vegans of the Investing Industry
Banned
Oct 17, 2015
306 posts
51 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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User avatar
Aug 1, 2007
1412 posts
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jimmyho56 wrote: 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.
Banned
Oct 17, 2015
306 posts
51 upvotes
Toronto, ON
AdsJoint wrote: 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?
Member
Aug 20, 2016
370 posts
330 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.
Deal Addict
Feb 26, 2017
1690 posts
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AdsJoint wrote: 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?
[OP]
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Dec 14, 2010
6137 posts
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AdsJoint wrote: 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?
The average return is not less than 4%. That's the dividend return. Total return is dividend return + capital appreciation. The less than 4% is considered as a "fixed salary" that you get regardless of what the market does. It generates cash that can be reinvested or spent. Buying quality companies when attractively priced takes care of the capital appreciation. When you combine both, you do better than index funds, because with index you don't control the portfolio (you buy good and bad companies), you don't control valuation (you pay market price for everything) and you pay MER.

Also, don't let the low yield to fool you. With an approach based on dividend investing, it's not just a less than 4% yield. It is a dividend stream that starts at , say 3% and grows, say, at 7% per year. Buy $100,000 of it and the year one dividend is $3,000. Compound the 7% growth for 30 years and the year 30 dividend is about $24,000. if the stock still yields 3% you've got a big capital gain. If it now yields 6% at year 30 because interest rates went up, the stock part is you've still got a quadruple in capital gain. The key is to monitor the safety of the dividend and the growth rate and trade into something else with better prospects if it no longer meets your goals for dividend and growth. Remember, in the end, for dividend growing companies, earnings drive stock price.

For example, take a traditional dividend grower, Canadian National Railway (CNR.TO). Its dividend is typically 1.6%, at any point that you buy. But look how earnings growth (orange line) drive stock price growth (black line). And look how dividends (white line) drives the portfolio yield overtime. CNR's annual return for the last 20 years is an impressive 15.9% per year, while indexing is much lower. BTW, that doesn't mean that indexing investing is not a good strategy, it's different, tailored for other purposes, with its own pros and cons, like DGI has its own pros and cons.

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2. I personally wouldn't buy any ETF. I would choose between 5 and 10 stocks. You could pick stocks from different sectors for better diversification. On my RRSP, I only hold US stocks, since RRSP is the only vehicle where withhold tax doesn't apply. My goal is to live off growing income and never need to sell shares to produce that income, hence I let it compound so that a smaller portfolio can produce enough income to retire - but not every goal is the same. Some people prefer growth stocks to maximize total return and then when they're ready to retire they can build an income portfolio. Again, each strategy has pros and cons. What is are your goals, what kind of portfolio do you want on your RRSP? Do you want to hold Canadian or US companies? I'd first build a list of quality companies that meet your criteria to partner with the business. That doesn't mean they're all good buys, as some might be overvalued. Once you have a list of quality companies, then you can focus on valuation, one company at a time.

I'm in the process of reviewing my watchlist, and I'll shrink from what I have today. Part of the rationale to why I have such diverse list was to have different risk / reward exposure to have income growth and maximize total return. However, since I have my own trading models focused on growth and income, I'll narrow down the list with more strict quality aspects, and will change my rules to cease partnership to be more strict as well, and not wait so long. In the end, you need to build a list and have clear entry and exit rules for whatever strategy you pick. Also, you need to decide if you want to invest the $10,000 at once or if you'll dollar cost average and add slowly.


Rod
Last edited by rodbarc on Jan 23rd, 2018 10:21 am, edited 1 time in total.
Build a comprehensive portfolio based on Investing and Trading strategies. Check out these threads and join the discussion:

Investing strategy based on dividend growth

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Member
Mar 6, 2017
362 posts
238 upvotes
rodbarc wrote:
2. I personally wouldn't buy any ETF. I would choose between 5 and 10 stocks. You could pick stocks from different sectors for better diversification. On my RRSP, I only hold US stocks, since RRSP is the only vehicle where withhold tax doesn't apply. My goal is to live off growing income and never need to sell shares to produce that income, hence I let it compound so that a smaller portfolio can produce enough income to retire - but not every goal is the same. Some people prefer growth stocks to maximize total return and then when they're ready to retire they can build an income portfolio. Again, each strategy has pros and cons. What is are your goals, what kind of portfolio do you want on your RRSP? Do you want to hold Canadian or US companies? I'd first build a list of quality companies that meet your criteria to partner with the business. That doesn't mean they're all good buys, as some might be overvalued. Once you have a list of quality companies, then you can focus on valuation, one company at a time.

I'm in the process of reviewing my watchlist, and I'll shrink from what I have today. Part of the rationale to why I have such diverse list was to have different risk / reward exposure to have income growth and maximize total return. However, since I have my own trading models focused on growth and income, I'll narrow down the list with more strict quality aspects, and will change my rules to cease partnership to be more strict as well, and not wait so long. In the end, you need to build a list and have clear entry and exit rules for whatever strategy you pick. Also, you need to decide if you want to invest the $10,000 at once or if you'll dollar cost average and add slowly.


Rod
Hey Rod,

I'm doing the exact same thing with my RRSP, I've had it in some standard mutual fund which has literally done nothing, I probably would've made the same if I stuck it in a savings account. I'm not into investing in stocks but I do have a sense of how people consume products and services so I figured I'd just pick some stocks in a few different industries with a mix of blue chip and growth and maybe one long shot stock

The thing I don't get is why people factor in dividends so much? for 5% as an example you're looking at only $5000 with $100k put in and for a regular person we're usually putting in no more than a few thousand so what is a yearly dividend of a few hundred dollars going to do? Is it not better to just focus on a stock that will provide a better capital appreciation since that will make a much bigger difference in the long run? The way I see it while doing my research is I want a company that will grow in capital appreciation and I look at the dividends as a gravy on top. If i get it's great, if not that's fine too.

Appreciate you taking the time to answer questions on some of technical things... it helps with the research

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