Category: Blog
by | Posted 10.16.2012 | Post Comment (No Comments)

Over the past few years, we’ve had the opportunity to discuss with many different dividend investors and it’s no surprise that many are frugal. Why is it not surprising? I guess that anyone who understands the power of dividends will tend to spend a bit less because every single expense is basically throwing away future cash flows in terms of dividends. Thinking of getting a new TV? You might and perhaps should get it. But that $2000 could also be spent buying dividend stocks that would pay close to $100 every year for my entire life. It certainly makes you think twice but useless spending and how it will end up impacting our future lifestyles. Once those thoughts start entering your head, it becomes much easier to save more money. In the end, saving is what it’s all about as well. As much I as focus on picking the right dividend stocks, reinvesting everything, reducing my trading fees and having a solid and diversified portfolio, the most important factor (by FAR) in growing my dividend portfolio is how much I’ll be able to contribute every month. That Being Said I also know of plenty of dividend investors that are not   »Read more

by | Posted 10.15.2012 | Post Comment (No Comments)

    Do you use current dividend or cost of purchase (COP) dividend yield?   If a stock currently trades at $10 and currently pays a $0.40 annual dividend; how come investor A says the stock dividend yield is 4% and investor B (who purchased the stock a while ago) says the stock dividend yield is 5%? That’s because investor A use the current dividend yield and investor B might use his cost of purchase (COP) dividend yield.   Which one should they both use? The current or the cost of purchase dividend yield? Before answering this question, we should look at both definitions.   Current Dividend   The current dividend yield is used to quantify in percentage the payout made by a company compared to its stock price. Let’s take McDonald’s Corporation example. If you put the ticker “MCD” in Google Finance, you will get the following screen:     In the right column, you get the current dividend payout (Div: $0.77) along with the current dividend yield (yield: 3.33%): $0.77/3.33. If the dividend yield is calculated by dividing the dividend payout by the stock price, how does $0.77 divided by $92.56 give 3.33%?   That’s because Google Finance   »Read more

by | Posted 10.1.2012 | Post Comment (No Comments)

Today, I decided to take a better look at the dividend space in Canada. As it becomes clear that international diversification is key for any dividend portfolio, looking to Canada makes a lot of sense. Why? When we compare the Canadian and US economies, there are similarities but also a lot of differences. Before getting into the specifics, here are a few interesting facts: –The main Canadian stock index, the S&P TSX60 has a dividend yield of 3.08% (almost 50% higher than the 2.06% dividend yield offered by the S&P500). -The top names are: -the top sectors that contribute to the TSX60 yield are: Analysis -I do think that overall, an investor that would only buy Canadian dividend stocks would be making a big mistake. It is basically a bet on Banks+Insurance companies as well as Natrual Resources as over 75% of the dividends are paid out by such companies –That being said, it is clear that you’d be missing out if you didn’t include a few Canadian companies in your portfolio. For example, financial companies are very difficult to trust in the US given everything that has happened. In Canada, the banks are very protected and very conservative but   »Read more

by | Posted 10.1.2012 | Post Comment (No Comments)

In this third edition, we are publishing the top viewed stocks on DividendStockAnalysis which can certainly be perceived as a major sign that these are companies that you should be looking into, here were the top viewed stocks in September:

by | Posted 8.10.2012 | Post Comment (1 Comment)

    Over the years, there are several investing trends that have come and gone. Investors are constantly looking for the next investment guru to tell them about his magic investing formula. From index investing to short selling based on technical analysis, there hundreds of investing theories. You can now play with commodities, forex, calls and puts. Most investing techniques become the “flavor of the month” before rapidly fading away. However, there is one strategy that has been posting solid results for several years: this is called Dividend Investing.   Year after year, quiet and “boring” companies are distributing a part of their profits to their shareholders. This 2 or 3% dividend distribution doesn’t look incredibly awesome to an investor looking for a double digit return. In fact, there are a lot more to dividend investing and simply receiving a quarterly check. This is why I’ve written the 30 things you must know about dividend investing.     #1: Dividend Investing Returns is Huge Over the past 40 years, 58% of the stock market yield was produced by dividends. Dividend stocks maintain a more stable value over time (meaning less stress for investors) while producing a constant cash flow that   »Read more

by | Posted 7.30.2012 | Post Comment (No Comments)

One of the continual challenges of holding a solid, long term dividend portfolio is to not only have stocks that can constantly increase their payouts over time but also have stocks that are diversified to ensure that if things do go wrong, the impact will remain limited to only part of the portfolio. I’ve already discussed the importance of: -Reaching industry diversification -International diversification Another interesting way to diversify is to hold stocks that decide on their payout in different ways. One of the latest trends is for some dividend stocks to pay their dividend not necessarily based on their cash reserves but rather on the prices of the commodities that they work with. It’s A Win-Win!! The fact is that such a policy works out well both for the company paying out the dividend but also you and I receiving the dividend. How It Works It’s quite simple, a company that holds gold reserves has a business that is very much linked to gold. No matter what the price of gold, the costs of exploiting it are almost identical. The revenues on the other hand are very variable and depend on the prices it can sell its gold a great deal.   »Read more

by | Posted 7.25.2012 | Post Comment (2 Comments)

    Dividend Investing is a popular investing strategy based on a simple principle: the payment of regular distributions to shareholders. This investing technique is interesting because it allows the investor to benefit from both a gain in capital due to good financial performance and dividend payments that make the wait more comfortable. Unfortunately, I’ve seen too many investors keep losing dividend stocks simply because they are receiving these distributions.   The dividend payout is certainly a good argument to hold a stock during a storm on the stock market. However, this doesn’t mean that all dividend stocks are good and should be kept forever. This is why investors must constantly look-up each stock fundamental to assess if the stock will grow and if the dividend will follow.           #1 High Dividend Payout Ratio   The main reason why you would buy a dividend stock is to benefit from dividend growth over time. Receiving a 3% dividend payout on your investment is good, but if this 3% can grow by 5% each year, you will be receiving 6% in 14 years. If you start investing early, you could probably end-up with a safe portfolio paying a   »Read more

by | Posted 7.20.2012 | Post Comment (No Comments)

    The most important thing when you invest in dividend stocks is not the size of your portfolio, the number of transactions or the dividend yield. The most important thing is the research you do prior to making your trade.   Selecting a stock that you will hold for 5, 10 even 15 years is not an easy task. A Dividend investor must look at keeping his stocks for such a long period of time in order to reap the dividend yield and benefit from the dividend growth. If you hold a stock that grows its dividend payout by 7% each year, the dividend yield will double in 10 years!   How Can You Pick The Right Stock for the Next Ten Years? By Doing Some Research!   There are no secrets to building a strong dividend portfolio. You need a stock analysis method and a list of financial websites from which to find your information.  We will be covering stock analysis methods in this blog through other articles. Today’s blog is about our Top Ten Stock Research Websites. The problem with the internet is that there is a lot of free information. Sometimes it’s too much and our   »Read more