Dividend stocks in a rising interest rate scenario

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Shakespeare
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Re: Dividend stocks in a rising interest rate scenario

Post by Shakespeare »

From behind the G&M pay wall:

https://www.theglobeandmail.com/globe-i ... e38062895/
Tom Connolly of DivdendGrowth.ca recently highlighted four utilities with yields that caught his eye. The four are:

- Canadian Utilities Ltd. (CU-T)....
- Emera Inc. (EMA-T)....
- Atco Ltd. (ACO.X-T)....
- Fortis Inc. (FTS-T):....
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Re: Dividend stocks in a rising interest rate scenario

Post by BRIAN5000 »

Shakespeare wrote: 22 Feb 2018 15:13 From behind the G&M pay wall:

https://www.theglobeandmail.com/globe-i ... e38062895/
Tom Connolly of DivdendGrowth.ca recently highlighted four utilities with yields that caught his eye. The four are:

- Canadian Utilities Ltd. (CU-T)....
- Emera Inc. (EMA-T)....
- Atco Ltd. (ACO.X-T)....
- Fortis Inc. (FTS-T):....

Yup News flash these are on almost anybody with a pulse's watch list well maybe not Dude99's.
Thanks for the link :thumbsup:
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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big easy
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Re: Dividend stocks in a rising interest rate scenario

Post by big easy »

Hogwild wrote: 06 Feb 2018 11:29 I know this is a little OT, but...
Based on what many of you have said above, do you all think it might be a good time to get out of a bond fund? I'm in XSH and it's not starting to turn around the way I'd hoped. After about 1 year, of holding it, the drop in unit price has now wiped out my gains. Maturity is typically 3-5 years, but not sure I can wait that long to see my unit price come back.
Presumably you are in bonds because you want protection of capital and some income. XSH is a short term corporate bond fund so will adapt to rising interest rates faster than a longer duration fund. Roughly speaking every 1% interest rate rise will result in a capital loss of 3-5% but over time the underlying bonds will mature and be replaced with bonds with a higher coupon. If you're in it for 3-5 years your capital should be ok. The coupon payments should follow the general trend of corporate yields but with a lag. You're not going to get rich on this one but you shouldn't lose your shirt either.
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Re: Dividend stocks in a rising interest rate scenario

Post by Peculiar_Investor »

BRIAN5000 wrote: 22 Feb 2018 15:39
Shakespeare wrote: 22 Feb 2018 15:13 From behind the G&M pay wall:

https://www.theglobeandmail.com/globe-i ... e38062895/
Tom Connolly of DivdendGrowth.ca recently highlighted four utilities with yields that caught his eye. The four are:

- Canadian Utilities Ltd. (CU-T)....
- Emera Inc. (EMA-T)....
- Atco Ltd. (ACO.X-T)....
- Fortis Inc. (FTS-T):....

Yup News flash these are on almost anybody with a pulse's watch list well maybe not Dude99's.
Are you sure? Because TMX's website shows a list of "trending" symbols and I don't see any of them.
TMX trending.JPG
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BRIAN5000
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Re: Dividend stocks in a rising interest rate scenario

Post by BRIAN5000 »

Peculiar_Investor wrote: 22 Feb 2018 16:46
Are you sure? Because TMX's website shows a list of "trending" symbols and I don't see any of them.
TMX trending.JPG
Positive, listen to almost any BNN show on related topic or go to Yahoo type in EMA and see what's being watched, I wish it wasn't true. We are ALL chasing/following some or a lot of the same stocks. We may be overconfident enough to think we're special but maybe not. ( in relation to what we're talking about here)



People Also Watch

Symbol
FTS.TO
FORTIS INC
CU.TO
CANADIAN UTILITIES LTD., CL.A,
TRP.TO
TRANSCANADA CORP.
ENB.TO
ENBRIDGE INC
TA.TO
TRANSALTA CORPORATION
Last edited by BRIAN5000 on 22 Feb 2018 17:39, edited 1 time in total.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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Re: Dividend stocks in a rising interest rate scenario

Post by Peculiar_Investor »

BRIAN5000 wrote: 22 Feb 2018 16:54 listen is almost any BNN show on related topic
Sorry, I ignore that noise and pay almost zero attention to BNN shows. Could it be an example of confirmation bias for those interested (pun intended) in this segment of the market?

I will concede that these names appeal to a segment of the investing public, those interested in dividend yield stocks. That might be "anybody with a pulse" amongst the older members of FWF but as a broad statement I don't see it.

Wasn't it early January 2018 when the discount brokerage firms were having service issues and the blame was being placed on "anyone with a pulse" wanting in on the speculative marijuana stocks?

In the past I have been a Connolly Report subscriber and would agree that these types of names would have caught his eye based on his criteria for wanting dividend yield with dividend growth. That doesn't make them candidates for everyone's watch, or buy list. I know they're not on mine.

The dividend yield, dividend growth trade is a crowded trade these days and the underlying fundamentals such as huge debt loads in a rising interest rate market don't look too encouraging to me. A purchaser might get a good dividend, but total return could be suspect going forward due to what I see as deteriorating fundamentals. Look at other fundamental metrics other than dividend yield or dividend growth, are they priced well? I don't see the margin of safety in that crowd to make them attractive to me. Just my $0.02.
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Re: Dividend stocks in a rising interest rate scenario

Post by newin96 »

BRIAN5000 wrote: 22 Feb 2018 16:54 Symbol
FTS.TO
FORTIS INC
CU.TO
CANADIAN UTILITIES LTD., CL.A,
TRP.TO
TRANSCANADA CORP.
ENB.TO
ENBRIDGE INC
TA.TO
TRANSALTA CORPORATION
Hey! That's MY list! Please refrain from broadcasting it. :rofl:
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Re: Dividend stocks in a rising interest rate scenario

Post by Thegipper »

Peculiar_Investor wrote: 22 Feb 2018 17:07
BRIAN5000 wrote: 22 Feb 2018 16:54 listen is almost any BNN show on related topic
Sorry, I ignore that noise and pay almost zero attention to BNN shows. Could it be an example of confirmation bias for those interested (pun intended) in this segment of the market?

I will concede that these names appeal to a segment of the investing public, those interested in dividend yield stocks. That might be "anybody with a pulse" amongst the older members of FWF but as a broad statement I don't see it.

Wasn't it early January 2018 when the discount brokerage firms were having service issues and the blame was being placed on "anyone with a pulse" wanting in on the speculative marijuana stocks?

In the past I have been a Connolly Report subscriber and would agree that these types of names would have caught his eye based on his criteria for wanting dividend yield with dividend growth. That doesn't make them candidates for everyone's watch, or buy list. I know they're not on mine.

The dividend yield, dividend growth trade is a crowded trade these days and the underlying fundamentals such as huge debt loads in a rising interest rate market don't look too encouraging to me. A purchaser might get a good dividend, but total return could be suspect going forward due to what I see as deteriorating fundamentals. Look at other fundamental metrics other than dividend yield or dividend growth, are they priced well? I don't see the margin of safety in that crowd to make them attractive to me. Just my $0.02.
There is a lot of merit in your commentary. I recall WB saying he likes companies with high ROE and ROC and he likes management that is able to redeploy excess capital at high return on equity. Why pay out earnings in dividends when you can reinvested them for a 20% return? I do understand that WB uses excess capital from his big insurers and to buy more stock equity.
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Shakespeare
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Re: Dividend stocks in a rising interest rate scenario

Post by Shakespeare »

The dividend yield, dividend growth trade is a crowded trade these days and the underlying fundamentals such as huge debt loads in a rising interest rate market don't look too encouraging to me.
A lot of us lightened these holdings earlier. Now we are increasing them again.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Dividend stocks in a rising interest rate scenario

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Peculiar_Investor wrote: 22 Feb 2018 17:07 The dividend yield, dividend growth trade is a crowded trade these days and the underlying fundamentals such as huge debt loads in a rising interest rate market don't look too encouraging to me. A purchaser might get a good dividend, but total return could be suspect going forward due to what I see as deteriorating fundamentals. Look at other fundamental metrics other than dividend yield or dividend growth, are they priced well? I don't see the margin of safety in that crowd to make them attractive to me. Just my $0.02.
My thoughts on Enbridge in particular (bolded part).
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Re: Dividend stocks in a rising interest rate scenario

Post by Taggart »

Not behind the G&M paywall:

'Bad news' buy signals from four dividend stocks

Friday, February 23, 2018

ROB CARRICK

https://secure.globeadvisor.com/servlet ... ARRICKGOLD

-----------------------------------------------------

The only stock on the list of four I don't own is Atco.

I've held the other utility stocks for a few years now, with no plans to sell. In fact I just added some shares of Canadian Utilities to my electrical utilities section back on January 5th.

http://www.financialwisdomforum.org/for ... 50#p606750
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Re: Dividend stocks in a rising interest rate scenario

Post by ig17 »

The Reformed Broker blog:

Rates, REITs and Utes
Lots of people have become emotionally invested in the idea that the bond bear market has begun, and that as the economy picks up steam yields will continue to rise as bonds get sold. Could be. Or – and hear me out – maybe the rapid rise of the last few months has priced in more hopes and dreams than reality. We’ve certainly seen that before…
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