DRIPs the DRIPpers DRIP
Running with the herd is fine, as long as you know what herd you’re running with.
In my opinion, following the top Dividend Reinvestment Plans (DRIPs) along with folks who love and use these plans (DRIPpers) is a good cohort. In isolation, each dividend-paying company below has risks. No doubt about that. As a collection however, a host of established companies that pay dividends or distributions can be an excellent component of your overall investment portfolio.
Instead of fragile eggs in one hand basket, I like to think of my dividend-paying stocks like tennis balls in a Rubbermaid tote. The tennis balls will bounce up and down off the floor with any moderate (market) force applied and are very resilient to breakage, even in isolation. Put those tennis balls in a tote, and you’ve got extra protection; you can drop that tote from almost anywhere around the house, the garage and this tote let alone the tennis balls in it won’t break. (Can you tell where I was working this weekend? 
)
Some experts would argue that buy and hold investing is dead. Decades ago, it was largely all the rage. Who’s right? Who’s wrong? Have times changed that much?
Personally the answer doesn’t matter to me since I don’t equate buy and hold to mean ignore when it comes to direct stock ownership. Financial pro Jim Yih thinks the same.
Owning any of these companies below is not a licence for you or me to set and forget our retirement plans, but at least you can set and revisit it instead of panicking about the daily financial news. I’m learning this more and more.
With all of these companies below, you have a strong history and in some cases, incredibly LONG history of dividends or distributions. What’s more important in my opinion, you have this payment track record in poor market conditions, when equity markets are tanking. When the financial world is going south in the aforementioned hand basket, you’re still getting paid because you’re an owner in a quality business, a business that pays real money from its real earnings. Dividends don’t lie and long-term, a company cannot continue to pay them if they cannot afford to – simple as that.
There are many excellent online resources for the dividend investor and one of my favourites is The DRIP Investing Resource Center. If you don’t know about this site, you’re missing out. This site has:
- Community boards to discuss all things related to DRIPs,
- Information for you, how to get your first share in a dividend-paying company,
- Great books and reads for the aspiring and seasoned dividend investor, and lastly,
- Choices, those DRIPs the DRIPpers DRIP.
Below I’ve listed the top-10 companies the DRIPpers DRIP based on a poll I participated in earlier this year. As a resource, I hope it helps you begin your due diligence exercises in becoming a dividend investor. Herd-mentality doesn’t have to be all bad. You can use this mentality to your advantage to increase your body of knowledge, learn more about investing opportunities around you and then apply that learning to your own situation.
In closing, I hope you consider this list another tool in your investing toolbox!
- Paid dividends every year since 1832.
- Dividend = $0.52 per quarter.
- Yield about 4%.
- Paid dividends for more than 58 years.
- Dividend = $0.245 per quarter.
- Yield over 3%.
- Paid dividends every year, uninterrupted, since 1829.
- Dividend = $0.70 per quarter.
- Yield about 4.5%.
RioCan Real Estate Investment Trust (REI.UN)
- Paid steady distributions for almost 20 years.
- Distribution = $0.115 per month.
- Yield over 5%.
- Paid dividends since at least 1972.
- Dividend = $0.29 per quarter.
- Yield about 3.5%.
- Paid dividends since at least 2000.
- Dividend = $0.42.
- Yield about 4%.
- Paid dividends since 1983.
- Dividend = $0.518 per quarter.
- Yield over 5%.
- Has increased dividends for 49 consecutive years, including 2011.
- Dividend = $0.57 per quarter in USD.
- Yield about 3.5%.
Canadian Imperial Bank of Commerce (CM)
- Paid dividends, and has not missed a payment, since 1868.
- Dividend = $0.90 per quarter.
- Yield around 4.5%.
- Has not missed a quarterly dividend payment since 1956.
- Dividend = $0.29 per quarter.
- Yield about 5%.
What do you think of this list?
Seasoned dividend investors: do you own any companies on this list?
New investors: any stocks on this list you are considering?
I look forward to your comments!
Thanks for reading!
@My Own Advisor
Nice! I have yet to DRIP a US position, but I plan on it eventually.
Great stuff! I look forward to comparing notes on what you’re DRIPping, synthetically or full DRIP, in the U.S.
I have all the banks which I bought in March 2009 when the market had tanked except Royal.
I dont know why I didnt buy Royal .Probably because they have some new rules that I dont agree with , for depositing money in my wifes account.?I know, I know, its silly ,but thats the decision I made.
The others like Enbridge I have been looking at for months and I am waitingfor the other shoe to fall before buying or until I have enough money after paying Rev. Can. left over which ever comes first
I also bought BCE, Telus ,and Rio Can, at the same time .Rio can was bought on the advice of my advisor the rest were bought on my own initiative and all are in the DRIP plan.
Fortis and Trans Can I know nothing about so I stayed away from them at the time
I am loathe to buy American stocks as the dividend tax credit does not apply and their yields dont make up the difference you would have to pay in taxes
Yes I was lucky ,not smart, in timing the market low . never have I done that before or since.
One stock I did buy, and it has gone south is Yellow Media, But Im hoping management will turn the company around with some new ideas , otherwise its a total loss.
I have always said that the stock maket is the biggest casino in the world ,and it is.
Nice list MOA, I’d add KO. Coca-Cola has paid dividends consecutively every year since 1920. The company is also a member of the dividend aristocrat index and has increased dividends for 49 years in a row.
I don’t DRIP because I only want to buy companies when they are undervalued not when they are overvalued.
Hey Kanwal,
I was wondering if you’d comment!
I love KO as well, and it’s on the DRIPpers list of favourites, just not part of their top-10. Awesome company. Do you own it? KO?
I understand where you are coming from, re: trying to buy companies when they are undervalued not overvalued, but that takes lots of research, no? Thoughts?
very nice list MOA, unfortunately for me I am sitting in 2 extremes: I am either totally indexed or totally concentrated on 1 sector!
I guess it fits my profile since I only have time to follow 1 sector only…
Ha. You make me laugh. Totally indexed vs. 1 one sector. I think you know that sector very well, so I must say, I’m not worried for you!
Yes, in part.
How is that working so far? Curious to know.
“Buy and Hold” is only “dead” if you define it to mean “buy til you die”. Your definition is OK.
Have you ever heard of “calendar investing”?
@Dale,
ha
thanks.
Yes, I have heard of calendar investing. You don’t subscribe to this, do you Dale?
Thanks for your comment!
The only negative with DRIPing in my view is the fact that you are not re-investing your cash in the optimal companies. Now, trying to pick the best stocks to invest in is never easy, but one can make an argument that if you were to re-invest dividends advantageously in companies that have been beat up, and now offer great value, you would be better off than in a pure DRIP format. That being said, DRIP investing eliminates the temptation trap that way too many investors fall into when they make way too many trades. The discounts are also great automatic returns on investment which limit any downside. The convenience factor is also nice.
@MUM,
Fair enough and all good points.
The key thing for me is, I’m getting more of my favourite companies AND as you have stated, it get to tune out my emotions. The convenience factor is huge.
I’m also taking some of the left-over cash and paying down debt with it. Win-win. More dividend-paying stock, and paying down debt, gotta love it
Of the listed companies I don’t own BCE, REI.UN, JNJ and CM. I used to own TA but wasn’t happy with the payout ratio and I sold it. I definitely like JNJ and REI.UN and will add them to my portfolio sooner or later. The dripinvestiong.org site is awesome. I think that’s where I picked up the link to your blog. There are no accidents…
@Elemag,
Actually, I own all 10 listed. I too, am nervous about TA, but haven’t sold any yet.
Dripinvesting.org site is excellent indeed. I’m on there every few nights, under the name “Financial Cents”.
Glad you found my blog Elemag
Take care, see you again here soon!
I have been investing for a long time and I cannot even count the number of times that people have declared that dividend investing is dead.
The companies that offer DRIPs are generally good long term investments. I do not mean that you should invest in them just because they offer DRIPs but a DRIPs company list is a good place to find some very good companies to invest in.
I have all the companies in the list except JNJ (as I generally do no invest in US stocks) and CIBC, which I have never really liked.
I also have Sun Life. I will continue to hold it as I think that it will be fine in the long term.
I agree that a starting portfolio of BMO, BCE and FTS would be just fine. FTS have been a great stock for me. I have tracked this on Quicken since 1987 when I bought it and I have a return of 13.4% per year. For TransAlta (TSX-TA), I have also tracked this since 1987 when I bought it and have a return of 8% per year.
@Susan,
Thanks for your comment!
I haven’t been investing in dividend-paying stocks long, but I’ve also heard the “dividend investing is dead” line a few times and to be honest, it’s annoying.
If this approach is really as dire or an eventual dead-end as folks say it is, I certainly would not have folks like you, or The Wealthy Canadian singing the praises of their diversified stock portfolios! You folks would be singing the sole praises of indexing and likely that alone.
I own JNJ myself, and a few other U.S. dividend-payers, and slowly I’m building a diverse portfolio of Canadian dividend-paying stocks. It just makes so much sense to do so in my opinon.
8% per year from TA for almost 25 years? Wow. Great stuff.
I always appreciate your insights Susan!
MOA Excellent Post! There is very little I could add onto this – well done
However if I have a stock that is climbing in share price, as is it’s PE Ratio etc. I may consider selling a position or all of it and take profit. MCD is a current example, and selling RY in April would have been profitable as well. I realize this is market timing, but holdign for the long haul and selling a few winners here and there (or buying back in) is not outside of my strategy – for now the dividend income is very nice!
Cheers
The Dividend Ninja
Thanks Ninja!
Like Susan, I always appreciate your comments.
You always have great feedback and information to offer. I don’t think selling a few winners (now and again) is a bad thing, just really hard to consistently accomplish that over time. You’ve listed a great metric for that.
For now, all dividend income is very nice!
Nice list! I have positions in each of the stocks you mention.
From a personal standpoint, I think the investor would own a nice basket of stocks if he or she had positions in each of these companies.
I like how Transalta offers a juicy 3% discount on shares reinvested. From a personal standpoint, I’m a bit disappointed with some of the discounts available with our big banks. At least BNS offers a 2% discount .
It’s nice to see that Enbridge, Fortis and RioCan offer discounts of 2%, 2%, and 3.1% respectively on shares reinvested.
To date, I haven’t DRIPPed any US stocks. Which US stocks do you DRIP?
Great toolbox MOA! A great resource indeed.
@TWC,
Thanks, and I figured you had positions in all of those. Kinda like the top-10 stocks from the TWC war chest
I too, think owning all these stocks and a few more, would be an excellent list of stocks for sure, not to mention, to build from.
I like too, like the discounts available for some of these companies. At this point, I’m synthetically DRIPping KO, JNJ and ABT. My position in T (AT&T) is not far off. Over time, I hope to synthetically DRIP all these Canadian stocks as well. I’m only about 1 more year away from saving and investing, from accomplishing that goal.
Thanks as always for your comment, glad you liked the post!
Way off on JNJ (Paid dividends since 1972)
JNJ has increased their dividend for 49 consecutive years and probably started paying one more than 100 years ago.
@ThinkDividends,
You’re right and my mistake, I will correct!
I meant to type: has paid dividends since 1972 (and then make reference to their graph on their website but I did not include the link my post):
http://www.investor.jnj.com/divhistory.cfm
Thanks for the quality control check!
I hold the following, and drip them: BMO, Enbridge, BNS, Fortis, RioCan. Pretty happy with my choices
Hey flamo,
Those are great companies, sounds like you’re well on your way! Thanks for the comment!
I have BMO, BCE, FTS.. I used to own TA but I made the bad dividend buyer mistake and sold it
I like this list.
I don’t DRIP any of these yet, but I should look into it.
@Y&T,
Some folks got nervous over the high(er) dividend payout ratio TA had for awhile. They just needed some time. Holdings and/or DRIPs with BMO, BCE and FTS are a great start I think!
Thanks for checking in!
I don’t own any of these but I’ve had the Bank of Montreal on a shopping list for a while. Need to stop dithering and take action.
Ha, thanks for your comment!
I’ll be over to check out your blog later this week!
The only one I own is JNJ.
I am shy about the financials, you have quite a few on this list. There were some US financials that had long standing dividend policies that not only dropped out of the ‘Aristocrats’ list (Bank of America) , but went out of business all together (i didn’t own these at the time).
But as far as Driping, it’s a good strategy but the one I use is to collect dividends and opportunistically buy the most attractive investments at that time.
Hey sfi!
I too, own JNJ.
Yeah, heavy weights or over weights in financials can be dangerous but as the banks go, so does the economy so in some ways, having at least a few financial stocks is not a bad thing. When markets are low, you’re buying companies on the cheap. When equities are flying high, you get to ride the wave upwards.
DRIPping is not for everyone, for sure. I figure I might as well for most of my holdings since I don’t need the income for a few more years.
Thanks for stopping by, hope to hear from you again!
Great list Mark! And I think it’s a good point that not all herd mentality is bad.
I am personally looking at BNS and Fortis, although I think Fortis is a bit high in price at the moment, but probably much better value than some of the other ones, like ENB or BCE.
Btw Mark, do you DRIP SLF? I’m thinking of synthetically DRipping that one.
Thanks
Hey Peter,
Thanks!
Just sharing the resources
BCE has recently run-up, have a look at the 52-week chart:
http://tmx.quotemedia.com/quote.php?qm_symbol=BCE&locale=EN
FTS, still some room to play.
I think BNS is a decent price right now, again, rightly or wrongly, I tend to use 52-week charts as my guide.
http://tmx.quotemedia.com/quote.php?qm_symbol=BNS
I do DRIP SLF, but synthetically. I now have enough shares for that. Sun Life and other life co’s are going to have a rough go of it, as long as interest rates stay low. Too bad. Savers don’t get rewarded in this type of low interest rate environment
I think SLF is a good company, their dividend @ $0.36 should be safe for many quarters to come in this climate. I’ll keep watching them though, the last quarter was not kind to them based on the aforementioned interest rates.
Again, how are these uber-low rates really helping people again?
Thanks for stopping by Peter!