Power of Dividend Growth 2011 (and beyond)
Re: Power of Dividend Growth 2011 (and beyond)
Regarding the energy sector that Scomac referred to above, it really hasn't hit me all that hard. I took a small loss on Ensign Energy Services which I sold last November. I was supposed to buy it back by now, but have decided to wait and see how this all plays out. Three other stocks I do own and are in Standard & Poor's list for the energy sector are Canadian Energy Services & Technology, Enbridge, and Trans Canada Corp. All are well above what I originally paid for them, so no tax harvesting advantage to take for now. Will I be keeping a close eye on what these three companies do with their dividend over the coming year? You betcha, I will.
Re: Power of Dividend Growth 2011 (and beyond)
I have really only sold out 2 positions, MFC and SLF in 2011. I lost confidence in their management and couldn't understand their financials. MFC cutting div certainly didn't help. Only time I experienced a Div cut.
Re: Power of Dividend Growth 2011 (and beyond)
Thought you would have experienced more than just one divy cut over the years. I have experienced maybe half a dozen or perhaps more. MFC, YLO, COS, BAC(US) are ones I can recall quickly off the top of my head.SQRT wrote:I have really only sold out 2 positions, MFC and SLF in 2011. I lost confidence in their management and couldn't understand their financials. MFC cutting div certainly didn't help. Only time I experienced a Div cut.
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Re: Power of Dividend Growth 2011 (and beyond)
No, just the one.AltaRed wrote:Thought you would have experienced more than just one divy cut over the years. I have experienced maybe half a dozen or perhaps more. MFC, YLO, COS, BAC(US) are ones I can recall quickly off the top of my head.SQRT wrote:I have really only sold out 2 positions, MFC and SLF in 2011. I lost confidence in their management and couldn't understand their financials. MFC cutting div certainly didn't help. Only time I experienced a Div cut.
Re: Power of Dividend Growth 2011 (and beyond)
I wonder about the dividend stocks. Since 2008 a lot of investors have been piling into these stocks. I find it very difficult when I do the metrics to find value . Most have high PE ratios and low ROEs. I road this train a lot and I am starting to believe that train is coming to a stop. Cyclical stocks like oil and gas stocks don't seem to be the best sector to find dividend stocks. When energy prices are high they can pay dividends when the energy prices return to their norms they must drastically cut or eliminate their dividends.
Re: Power of Dividend Growth 2011 (and beyond)
Agree that commodity businesses not the best place to find solid div growers. Banks have ROE's in the 15-20% range and PE's well under average at about 11x with payout ratios of 40-50% I have done very well with Banks, Telcos, and Pipes. Div stocks have done well in a low interest rate envireonment but also their underlying business have generally performed well. Not sure why you think " the train is coming to a stop" Banks with a 4% solid div yield would seem to have little downside from here? I expect the first Q results to surprise a bit on the upside and clear some of the uncertainty away.zinfit wrote:I wonder about the dividend stocks. Since 2008 a lot of investors have been piling into these stocks. I find it very difficult when I do the metrics to find value . Most have high PE ratios and low ROEs. I road this train a lot and I am starting to believe that train is coming to a stop. Cyclical stocks like oil and gas stocks don't seem to be the best sector to find dividend stocks. When energy prices are high they can pay dividends when the energy prices return to their norms they must drastically cut or eliminate their dividends.
Re: Power of Dividend Growth 2011 (and beyond)
They have a lot of Canadian operations and the exposure to a resource dominated economy and a overheated housing market. This will eventually work it's way through the financials. There will be blood.SQRT wrote:Agree that commodity businesses not the best place to find solid div growers. Banks have ROE's in the 15-20% range and PE's well under average at about 11x with payout ratios of 40-50% I have done very well with Banks, Telcos, and Pipes. Div stocks have done well in a low interest rate envireonment but also their underlying business have generally performed well. Not sure why you think " the train is coming to a stop" Banks with a 4% solid div yield would seem to have little downside from here? I expect the first Q results to surprise a bit on the upside and clear some of the uncertainty away.zinfit wrote:I wonder about the dividend stocks. Since 2008 a lot of investors have been piling into these stocks. I find it very difficult when I do the metrics to find value . Most have high PE ratios and low ROEs. I road this train a lot and I am starting to believe that train is coming to a stop. Cyclical stocks like oil and gas stocks don't seem to be the best sector to find dividend stocks. When energy prices are high they can pay dividends when the energy prices return to their norms they must drastically cut or eliminate their dividends.
Re: Power of Dividend Growth 2011 (and beyond)
I do not see blood but I do not see banks going anywhere for some time. Wealth management divisions are not going to lift those boats enough to keep profits rising. Still, I will keep TD on my Alert list for a possible buy later this year when quarterly results likely falter.
But that is true for pipelines too. Much of the current pricing is premised on new projects but who is going to fill those projects when O&G production is likely going nowhere? Look for a number of deferments/cancellations this year to bring P/E multiples back into line.
But that is true for pipelines too. Much of the current pricing is premised on new projects but who is going to fill those projects when O&G production is likely going nowhere? Look for a number of deferments/cancellations this year to bring P/E multiples back into line.
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Re: Power of Dividend Growth 2011 (and beyond)
I'm expecting a buying opportunity in banks with the Euro collapse.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
Re: Power of Dividend Growth 2011 (and beyond)
Differences of opinion is what makes a market. We shall see. I am certainly not selling at these prices but I hardly ever sell at any price. Hard to make money betting against the banks.
Re: Power of Dividend Growth 2011 (and beyond)
This has been predicted by many for some time. Eventually this prediction will come true. But I doubt they will "falter" this year. Maybe 5-7% growth in EPS for the group. But who knows. TD should raise their div by 4-5 cents per Q on a base of 47 cents. Not too shabby in this envireonment.AltaRed wrote:I do not see blood but I do not see banks going anywhere for some time. Wealth management divisions are not going to lift those boats enough to keep profits rising. Still, I will keep TD on my Alert list for a possible buy later this year when quarterly results likely falter
Edit. Have noticed recently that earnings forecasts are a little lower than 5% for the group but some analysts think TD will benefit from a relatively stronger US banking envireonment. Divs should be raised by TD/RY/BNS this quarter.
Last edited by SQRT on 06 Feb 2015 09:53, edited 1 time in total.
Re: Power of Dividend Growth 2011 (and beyond)
Or when their mortgage securitization practices become public knowledge, risks are examined and everyone learns this process isn't squeaky clean (or legal)?Shakespeare wrote:I'm expecting a buying opportunity in banks with the Euro collapse.
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Re: Power of Dividend Growth 2011 (and beyond)
When earnings momentum slows or stalls, that almost automatically results in multiple compression. That is what we are seeing now with stock price declines. I expect that will continue yet to some degree until some uncertainties are resolved. It is not a bad thing. It's just the way a healthy market should behave.SQRT wrote:AltaRed wrote:This has been predicted by many for some time. Eventually this prediction will come true. But I doubt they will "falter" this year. Maybe 5-7% growth in EPS for the group. But who knows. TD should raise their div by 4-5 cents per Q on a base of 47 cents. Not too shabby in this envireonment.
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Re: Power of Dividend Growth 2011 (and beyond)
Yes, agree but the market has already discounted I think. I don't see much downside from here. I suspect we may have already seen the lows but who knows.AltaRed wrote:When earnings momentum slows or stalls, that almost automatically results in multiple compression. That is what we are seeing now with stock price declines. I expect that will continue yet to some degree until some uncertainties are resolved. It is not a bad thing. It's just the way a healthy market should behave.SQRT wrote:AltaRed wrote:This has been predicted by many for some time. Eventually this prediction will come true. But I doubt they will "falter" this year. Maybe 5-7% growth in EPS for the group. But who knows. TD should raise their div by 4-5 cents per Q on a base of 47 cents. Not too shabby in this envireonment.
Re: Power of Dividend Growth 2011 (and beyond)
Do you think the Cdn banks are breaking the law when they underwrite or securitize mortgages? If so I better sell right away.brad911 wrote:Or when their mortgage securitization practices become public knowledge, risks are examined and everyone learns this process isn't squeaky clean (or legal)?Shakespeare wrote:I'm expecting a buying opportunity in banks with the Euro collapse.
Re: Power of Dividend Growth 2011 (and beyond)
Around 10x 2015 earnings, 4% dividend yield, oligopoly growth potential (they keep finding ways to add on the fees). Hard to find any large company with those metrics.zinfit wrote: They have a lot of Canadian operations and the exposure to a resource dominated economy and a overheated housing market. This will eventually work it's way through the financials. There will be blood.
Re: Power of Dividend Growth 2011 (and beyond)
Breaking or bending I can't say for sure because I'm not inside the room. I have been watching their balance sheet behaviour the past few years and I'm almost certain they are bending rules.SQRT wrote:Do you think the Cdn banks are breaking the law when they underwrite or securitize mortgages? If so I better sell right away.
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Re: Power of Dividend Growth 2011 (and beyond)
Well I was in the room. Your conclusion after "reviewing their balance sheets" is ludicrous.brad911 wrote:Breaking or bending I can't say for sure because I'm not inside the room. I have been watching their balance sheet behaviour the past few years and I'm almost certain they are bending rules.SQRT wrote:Do you think the Cdn banks are breaking the law when they underwrite or securitize mortgages? If so I better sell right away.
Re: Power of Dividend Growth 2011 (and beyond)
I don't think so, but it all depends on your approach, analysis and what part you were participating in. You don't have to invest like me or analyze stocks as I do.
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Re: Power of Dividend Growth 2011 (and beyond)
I stole the above from the Dogs thread. I would add that the reason I sold Husky a few years ago, was after management announced with words to the effect that they were not prepared to keep increasing the company dividend each year, but as AltaRed mentioned to pursue offshore ventures in east Asia. A high yield alone without the benefit of decent yearly dividend increases will never tempt me to invest in any company. I leave them for others to pursue.AltaRed wrote:I would pass on HSE for other reasons. I believe it is primarily a vehicle for Li Ki Shing to fund the rest of his $32B ventures and HSE's offshore China ventures are only as secure as Li's relationship with the current regime. Risky in my opinion.
Still, that is hardly a valid reason to punt HSE from consideration in the Dogs index.
I can think of only two stocks in my own portfolio that don't fit the above mould, and that's Leons Furniture and Corby Spirits & Wine, and the only reason for these two exceptions is that they have a habit of giving out a special dividend every few years.
Re: Power of Dividend Growth 2011 (and beyond)
I was in a very senior finance role that starts with a "C". Your conclusions are ridiculous and even if true, which they are not, could not possibly be "discovered" by a review of a balance sheet.brad911 wrote:I don't think so, but it all depends on your approach, analysis and what part you were participating in. You don't have to invest like me or analyze stocks as I do.
Re: Power of Dividend Growth 2011 (and beyond)
I acknowledge your opinion, but there are a few individuals here who can attest to the fact that it was actually very easy to find and this was back in 2013. How much systemic risk that will result in may not be significant; no one knows this yet. I own three of the banks, but my asset allocation is appropriate for the perceived risk I've determined.SQRT wrote:I was in a very senior finance role that starts with a "C". Your conclusions are ridiculous and even if true, which they are not, could not possibly be "discovered" by a review of a balance sheet.
Ask your colleagues about the recent lawsuit regarding the mortgage referral income structure.
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Re: Power of Dividend Growth 2011 (and beyond)
Globeinvestor
John Heinzl
Should I buy dividend stocks now, or wait for a market correction?
I have been sitting on cash and GICs for the past year, waiting for an entry point into the market. Should I start buying dividend stocks now, or am I better to sit on the sideline and wait for true buying opportunities via a market correction?
John Heinzl
Should I buy dividend stocks now, or wait for a market correction?
I have been sitting on cash and GICs for the past year, waiting for an entry point into the market. Should I start buying dividend stocks now, or am I better to sit on the sideline and wait for true buying opportunities via a market correction?
Re: Power of Dividend Growth 2011 (and beyond)
Very curious to know who else said this back in 2013 and what you look at in particular on the balance sheet that leads you to believe this. Can you explain?brad911 wrote:I acknowledge your opinion, but there are a few individuals here who can attest to the fact that it was actually very easy to find and this was back in 2013. How much systemic risk that will result in may not be significant; no one knows this yet. I own three of the banks, but my asset allocation is appropriate for the perceived risk I've determined.SQRT wrote:I was in a very senior finance role that starts with a "C". Your conclusions are ridiculous and even if true, which they are not, could not possibly be "discovered" by a review of a balance sheet.
Ask your colleagues about the recent lawsuit regarding the mortgage referral income structure.
Re: Power of Dividend Growth 2011 (and beyond)
It started with a review of the financials of the big five. I have a spreadsheet I maintain for historical purposes (so I can compare trends in repeating cycles to anticipate how the market may react). A number of anomalies presented themselves in regards to the explosive rise in mortgage business growth but how that wasn't translating to expected changes on the balance sheets. It was as simple as adding one and two, but networking with a number of peers here to see where the numbers made sense.jsbarnby wrote:
Very curious to know who else said this back in 2013 and what you look at in particular on the balance sheet that leads you to believe this. Can you explain?
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