Investing

Investing Idea - Dividend Growth

  • Last Updated:
  • Oct 16th, 2020 5:52 pm
Sr. Member
Oct 31, 2009
563 posts
99 upvotes
Hi @Chance7652 investing in US stocks is also understanding how tax works to maximize returns. We have only started investing in US market recently hence if you remember I started buying MLP's (EPD) but was hit with huge withholding tax hence eventually sold my position. Another question I have is how about REIT's like (O) and bank stocks such as BAC and KEY are they treated normally as 15% withholding stocks if you held them in a non-registered accounts? Thanks
Deal Addict
Feb 26, 2017
1620 posts
1649 upvotes
desertfox wrote: Hi @Chance7652 investing in US stocks is also understanding how tax works to maximize returns. We have only started investing in US market recently hence if you remember I started buying MLP's (EPD) but was hit with huge withholding tax hence eventually sold my position. Another question I have is how about REIT's like (O) and bank stocks such as BAC and KEY are they treated normally as 15% withholding stocks if you held them in a non-registered accounts? Thanks
I hold all of my US stocks in my RRSP and TFSA (the TFSA has should have a a 15% withholding tax although I haven't received a dividend from the stock I own there yet). In my unregistered account I hold only Canadian C corps with eligible dividends.

I'm going to try to answer this but I'll preface this by saying I don't know this topic very well. If I give any wrong information someone please say something Disappointed But Relieved Face.

I think you'll get a 15% withholding in an unregistered account with US stocks. You may be able to get some of that 15% withholding back and I'd google/look more into that. REITs are going to have different tax implications for capital gains based on how much ROC it has (I don't hold any reits Canadian or US in my unregistered account for the same reason). You'll also need to file some paperwork if your US holdings go over 100k in an unregistered account and there are penalties if you don't. Keep in mind that these will not be eligible Canadian dividends so they will be taxed differently/higher.
Sr. Member
Oct 31, 2009
563 posts
99 upvotes
Chance7652 wrote: I hold all of my US stocks in my RRSP and TFSA (the TFSA has should have a a 15% withholding tax although I haven't received a dividend from the stock I own there yet). In my unregistered account I hold only Canadian C corps with eligible dividends.

I'm going to try to answer this but I'll preface this by saying I don't know this topic very well. If I give any wrong information someone please say something Disappointed But Relieved Face.

I think you'll get a 15% withholding in an unregistered account with US stocks. You may be able to get some of that 15% withholding back and I'd google/look more into that. REITs are going to have different tax implications for capital gains based on how much ROC it has (I don't hold any reits Canadian or US in my unregistered account for the same reason). You'll also need to file some paperwork if your US holdings go over 100k in an unregistered account and there are penalties if you don't. Keep in mind that these will not be eligible Canadian dividends so they will be taxed differently/higher.
Thanks. I do understand that it's better to just invest in Canadian dividend stocks (if one has already maxed their RRSP/TFSA) in Canadian non-registered accounts to take advantage of preferential eligible dividends. But there is not much to diversify in Canadian stocks as TSX don't have much technology and I think ZERO healthcare dividend stocks.
Sr. Member
Mar 4, 2008
537 posts
91 upvotes
BC
Speaking of being taxed...to hold dividend paying stocks in TFSA or un-registered account? (I was just on reddit and there's a thread that has a few posts of people saying that dividend paying stocks in unregistered and growth stocks in TFSA).
Deal Addict
User avatar
May 11, 2014
4011 posts
4245 upvotes
Iqaluit, NU
JimboD wrote: Speaking of being taxed...to hold dividend paying stocks in TFSA or un-registered account? (I was just on reddit and there's a thread that has a few posts of people saying that dividend paying stocks in unregistered and growth stocks in TFSA).
That should never be a hard rule. If you have both types of investments and you have more than enough room, then you might consider some tax strategization.

For example if you haven't maxed your TFSA, all your investments should be in TFSA. Additionally, depending on where you are financially, holding dividend shares in a TFSA may work very well as it provides a potential tax-free cash flow. See where this can get complicated.

The real rule is you buy the most appropriate investment that will grow the most for you considering your risk tolerance. Tax considerations should then be made accordingly. Tax considerations, especially generalizations such as you posted, should never be prioritized.
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Newbie
Jan 1, 2008
99 posts
21 upvotes
AP-UN looks good now at 36ish after coming down from overvalued no?
Blended P/FFO: 15.88
Normal P/FFO Ratio 17.87
Div Yld: 4.60%
Div. Growth Rate: (9 yrs)
AVG: 2.2%
Deal Guru
Jun 26, 2011
13520 posts
3626 upvotes
GTA
deger wrote: AP-UN looks good now at 36ish after coming down from overvalued no?
Blended P/FFO: 15.88
Normal P/FFO Ratio 17.87
Div Yld: 4.60%
Div. Growth Rate: (9 yrs)
AVG: 2.2%
Depends how you feel on office space
Sr. Member
Oct 31, 2009
563 posts
99 upvotes
Canadian dividend increases this year are few and far between. Savaria (SIS) and Kirkland Lake Gold (KL) are among the few. We are glad to start positions on these two earlier this year before this pandemic. Savaria (SIS) who is a manufacturer of personal mobility in North America and internationally would be considered essential as the aging population in North America and around the world continues. Kirkland Lake Gold (KL) on the other hand is a good hedge for a volatile market and looming recessions. Both companies have minimal debts. It will now be a part of our buy and hold equities unless of course fundamentals go sour.
Deal Guru
Jan 27, 2006
14464 posts
7394 upvotes
Vancouver, BC
desertfox wrote: Savaria (SIS) who is a manufacturer of personal mobility in North America and internationally would be considered essential as the aging population in North America and around the world continues.
Unfortunately, it might be a COVID long hauler play...
Sr. Member
Sep 29, 2007
603 posts
122 upvotes
jerryhung wrote: Can't help but to add KEY, PPL, ENB, CNQ, and EIF recently for the yields
I know I know, I should've invested in Tech stocks only as they only go UP ............. LOL
Why on earth would you invest in businesses with massive regulatory headaches, shrinking revenues and in terminal decline??? LOL
[OP]
Deal Fanatic
User avatar
Dec 14, 2010
6078 posts
6946 upvotes
retireat50 wrote: Why on earth would you invest in businesses with massive regulatory headaches, shrinking revenues and in terminal decline??? LOL
KEY, ENB, PPL have long term contracts, revenue driven by volume (which is not shrinking), as you need to move oil around the country and US. Why is this in terminal decline? These are income plays, if the goal is accumulate or live from dividends, that’s a decent and sustainable yield that one can achieve regardless of oil price or recession going on. EIF operates on a different segment, and it’s well managed.

Are these remarks based on the financial of the business? Or on the movement of stock price?


Rod
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Sep 19, 2004
23598 posts
5301 upvotes
where I belong
rodbarc wrote: KEY, ENB, PPL have long term contracts, revenue driven by volume (which is not shrinking), as you need to move oil around the country and US. Why is this in terminal decline? These are income plays, if the goal is accumulate or live from dividends, that’s a decent and sustainable yield that one can achieve regardless of oil price or recession going on. EIF operates on a different segment, and it’s well managed.

Are these remarks based on the financial of the business? Or on the movement of stock price?


Rod
Thanks Rod, obviously stock price determins everything on RFD
and if one invested in Tech or TSLA (and winning), everything else don't matter :)
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May 12, 2012
618 posts
682 upvotes
Richmond Hill, ON
I think @retireat50 was being sarcastic? I've personally expanded my exposure in some of those tickers due to [what I feel are] recent discounts in their stock prices. Even SU looks attractive trading at and below $16.

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