36

Introducing the Dividend Growth Index

 

Click here for the Q1 Update. 

 

Continue reading the Introduction of the Dividend Growth Index…

Like dividend-paying stocks?  Me too!  Now you can follow a virtual stock portfolio managed by several dividend investors to see how these investors and their stock picks do, including yours truly.  Much more information about this initiative, created by The Dividend Guy, can be found here.

In summary, what is the Dividend Growth Index all about?

  • 7 8 dividend investors (Dividend Growth Investor added on October 2, 2011), who have,
  • 3 stock selections each, whereby,
  • Each dividend investor follows their selections and on a quarterly basis, will report and comment on the performance of their selections.

The following is a list of the investor participants and along with a brief bio:

The Dividend Guy

The Dividend Guy has lots of investing experience, and focuses on companies that pay dividends and that increase their dividends as well.  He’s also got an excellent and a free e-book about Dividend Investing available on his site.  Get it now – because excellent and free don’t go together very often!   His selections:

Intel (INTC:US), Coca-Cola (KO:US), National Bank of Canada (NA).

Dividend Mantra 

Dividend Mantra is a relatively new dividend investor but you wouldn’t know it.  His monthly dividend income reports are impressive.  He’s a very quick study.  Check out his site if you haven’t already done so.   His selections:

ConocoPhillips (COP:US), Phillip Morris Intl. (PM:US), Procter & Gamble (PG:US).

The Passive Income Earner

The Passive Income Earner has been blogging for a couple of years now and is an avid dividend investor.   I follow him regularly.  You can follow his site to learn how he’s growing his passive dividend income, month after month, to make his retirement dreams come true.  His selections:

Canadian National Railway (CNR), Canadian National Resources (CNQ), Aflac (AFL:US).

Dividend Ninja

Dividend Ninja switched from a buy and holder of mutual funds to a self-directed dividend-investor and passive indexer.  He’s using this dual-pronged investing approach to make his retirement dreams a reality.  Sounds like a great strategy to me Ninja!   His blog has outstanding content, not to mention, one of the best designs out there.  His selections:

Husky Energy (HSE), Pepsico (PEP:US), Staples (SPLS:US).

The Wealthy Canadian

The Wealthy Canadian invested his hard-earned money from an early age and is now being rewarded for it.  He’s semi-retired in his mid-30’s and owns a very impressive and diverse stock portfolio.   His blog is a must read for any investor.   His selections:

Royal Bank of Canada (RY), Daylight Energy (DAY), Progressive Waste Solutions (BIN).

Dividend Monk

The Dividend Monk isn’t a monk.  Matt is an engineer by trade but has a monk-like dedication to dividend-paying stocks.  He’s been an avid investor for about six years now.  He views money as a valuable resource that can help you achieve your goals or simply provide more options in life, whatever they may be.   Every blogpost is insightful and articulate – an excellent resource for any investor.   His selections:

Walmart (WMT:US), Novartis (NVS:US), Energy Transfer Equity (ETE:US).

Dividend Growth Investor

With Dividend Growth Investor, you’ll find thorough U.S. stock analyses week after week after week.   Need to understand what could make a quality holding in your portfolio?  Look no further than his site.  DGI is on a quest to achieve an increasing dividend income stream from stocks that have above average dividend growth and increased distributions over time.   I’ve followed his site for years.  I’m just one of 5,000 followers, and counting.  His selections:

Enterprise Products Partners (EPD:US), Chevron (CVX:US), McDonald’s (MCD:US).

My Own Advisor

Then there’s me.  I’ve been a dividend-investor for almost four years now and over the last couple of years, I’ve permanently ditched all my mutual funds in favour of indexing and buying and holding dividend-paying stocks.  Over this time, my dividend income has grown from “the big bagel” ($0) to just over $5,000 this year.  I plan on reinvesting this income from dividend-paying stocks to fund part of my retirement years down the road.   Onwards and upwards!   Here are my selections:

Bank of Nova Scotia (BNS), Abbott (ABT:US), CML Healthcare (CLC).

Full Disclosure: At the time of this writing, I own shares of KO, HSE, BNS, ABT and CLC.

I hope you enjoy following The Dividend Growth Index.   I want to thank The Dividend Guy for the opportunity to play along.

Next week, I’ll comment on my three stocks (BNS, ABT and CLC) and provide you with information about why I’ve picked them and what I expect from them.

Are you a dividend investor?

Do you own any of these stocks?

Are you as curious about this Dividend Growth Index as I am? :)

Filed in: Dividend Growth Index

36 Responses to "Introducing the Dividend Growth Index"

  1. MOA Thanx for the stellar mention!

  2. Lazy Investor says:

    I fell into the Berkshire buyback today instead of dividend investing.

  3. This sounds like a neat contest. I look forward to seeing results. I think it is interesting how little crossover there is, even amongst all of you “dividend gurus.” Personally, I love your Abbot and CML picks, any reason why you’d go with BNS as opposed to another Canadian Bank?

    • @MUM,

      Ha. I don’t know about gurus, at least not me! I’m already taking some hits because of my CLC (CML Healthcare) pick. I know it’s risky, but that’s why I own it. A bit of a flyer. I love the yield on it.

      I went with BNS because of the growth prospects it has, I believe, in Latin America over other countries or geographical areas. All CDN banks have paid dividends forever, but CIBC is more retail, RY is more going more Europe, TD and BMO are going more U.S. I don’t see the growth in the U.S.

      I like what Michael Sprung has said about them:
      “Likes the international flavor. Canada’s most internationally diversified bank. Best for credit discipline. Fewer surprises in terms of loan losses. Sells for a premium but worth it because of stability it supplies to a portfolio.”

      Thanks for checking in!

  4. @LazyInvestor: nice! Interesting news on that yesterday (updated by My Own Advisor) to say the least

    MOA: Great job highlighting everyone’s selection of dividend-paying stocks. I’m really looking forward to this initiative and to see how we collectively perform. It’s going to be a lot of fun.

    Also, thanks for the kind mention.

    Cheers,
    TWC

  5. Think Dividends says:

    I think there is a good chance that CML and Daylight cut their payouts within the next 12 months.

    • @Think Dividends,

      I hear ya, maybe a small haircut for CLC, but DAY moreso, no?

      I actually emailed investor relations of CML HealthCare Inc. a month or so ago, re: dividend payout ratio. This was their response:

      “CML has announced its intention to distribute monthly dividends of $0.0629/share per month. Management believes that cash flow from our Canadian operations will be able to sustain the stated dividend level.” “Using our Q1/11 dividend of $16.9 million and Adjusted Funds From Operations (AFFO) of $19.4 million, our payout ratio was 87.1%.” “Note that AFFO is Funds from Operations less capital expenditures.”

      I’m gonna hang on.

      Did you ever own CLC?

  6. retirement DIY says:

    Wondering why no one ever mentions EIX as a dividend stock…would appreciate your comments. thx.
    p.s. love your blog

    • @Retirement DIY,

      Thanks for checking in, and the nice compliment!

      EIX:US? Edison?

      http://tmx.quotemedia.com/quote.php?qm_symbol=EIX:US

      Yield is currently 3.4%. Dividend = $0.32 quarterly. Very long history of paying dividends. All good.

      It might not be in large favour with dividend investors (?), don’t know this for sure, because it does not increase its dividend by leaps and bounds. You’re right, a very steady payer (which is awesome) but not a significant hiker when it does a dividend increase. Without doing any detailed analysis on EIX:US, I unfortunately couldn’t offer any more perspectives than that.

      Here is a recent article, that might reinforce my thesis on them:

      http://seekingalpha.com/article/290306-edison-international-leaves-dividend-investors-wanting

      Do you own this company? Have you been looking into this guy? Curious.

      All this said, another Seeking Alpha says EIX, along with ED, DUK and many others are the best utilities to own in the U.S., which I would agree.

  7. Thanks for the mention! I’m excited to see how this goes. Great picks MOA.

  8. Jim McGraw says:

    @My Own Advisor
    Re: CML: No management is going to tell you the dividend is in jeopardy (Manulife, Armtec, Yellow Pages have all said it was safe before they cut it). CML has three main issues right now: (1) No CEO / strategic direction (and the Chair is a bit flaky). They don’t know if the are going to be a growth company or a steady high dividend company. If they choose to pursue growth, the dividend will be cut. (2) Their U.S. operations are horrible. It’s unknown whether or not they are going to sell the business or keep wasting money down there. (3) Their big contract is up for renewal right now and the outcome is uncertain. These three issues (especially #1) make CML’s dividend risky right now. CML also has a lot of capital expenditures in the next couple of years (replacing old equipment). If they cut, I expect it to be a 15% cut. I sold CML in 2010.

    Re: Daylight: They’ve cut in the past, so I wouldn’t be surprised if they cut again. A lot of their production is gas. TD Securities recently highlighted Daylight as one of their top candidates for a dividend cut. It is priced into the stock price. If they cut, I expect it to be a 30% cut. I’ve never owned it.

  9. Think Dividends says:

    @My Own Advisor

    Re: CML: No management is going to tell you the dividend is in jeopardy (Manulife, Armtec, Yellow Pages have all said it was safe before they cut it). CML has three main issues right now: (1) No CEO / strategic direction (and the Chair is a bit flaky). They don’t know if the are going to be a growth company or a steady high dividend company. If they choose to pursue growth, the dividend will be cut. (2) Their U.S. operations are horrible. It’s unknown whether or not they are going to sell the business or keep wasting money down there. (3) Their big contract is up for renewal right now and the outcome is uncertain. These three issues (especially #1) make CML’s dividend risky right now. CML also has a lot of capital expenditures in the next couple of years (replacing old equipment). If they cut, I expect it to be a 15% cut. I sold CML in 2010.

    Re: Daylight: They’ve cut in the past, so I wouldn’t be surprised if they cut again. A lot of their production is gas. TD Securities recently highlighted Daylight as one of their top candidates for a dividend cut. It is priced into the stock price. If they cut, I expect it to be a 30% cut. I’ve never owned it.

    • @TD and (Jim)? – same comment, somehow,

      Re: CLC. Yes, their U.S. operations have been a mess. I recall they lost millions last Q. New CEO should help right the ship. I also think they were aggressive coming out of the income trust world. They are going to get a new contract from Ontario, they also had some good news with the Beckman contract this summer. This industry has always been in debt, it is healthcare right?

      If you owned it now, would you sell? Even with a 20% haircut, the yield would still be 5-6% which is pretty nice.

      Re: DAY. Possibly, but I don’t know enough about DAY to say one way or the other. Certainly a riskier play, but you know about risk and reward all too well since you’re in the industry. Do you think DAY will get bought out at some point?

  10. Lazy Investor says:

    What about BP in 2012? If they put it back to what it was in 2010…

  11. Think Dividends says:

    @Jim McGraw Multiple users on the same PC (cookies) – You can delete it. And this comment too. When I posted I didn’t noticed Jim’s name was logged in… THANKS

  12. Think Dividends says:

    @My Own Advisor
    Look, Yellow cut the dividend again today… You can’t trust management when they say the dividend is safe… Some management teams you just can’t trust… Now the guys at Yellow have absolutely no credibility…

    Re: CML: I love the business, but I am not a fan of management or the stock. Ideally, I wish the payout was lower (so we wouldn’t have to have this debate). The risk is that if you sell now, you miss the rally if everything works out OK. If they cut the dividend then CML will tank. We don’t know who the new CEO will be or his priorities are (turn CML into a growth company or keep it as a cash cow). Right now I have no faith in the Chair of the Board of CML. Hence I am content to watch from the sidelines.

    • @TD,

      Yeah, Yellow is a dead duck. CLC doesn’t compare to them, they actually have a tangible business.

      You’re right, management will say all the right things to shareholders. The sidelines are certainly safer than the emotions the shareholder has, only from time to time mind you :)

      Stay in touch!

  13. retirement diy says:

    thanks for the quick response…this could get addictive :)

  14. If you’re looking for consistent or rising dividends in the Oil & Gas sector, you won’t easily find it with smaller to intermediate-cap plays like DAY-T, PGF-T, PWT-T, COS-T, ARX-T, BNP-T, etc.

    As many of us know, the sector is extremely tied to the price of this depleting resource and dividend policies are often adjusted accordingly. It’s not the same as comparing it to say, the Financial Services sector.

    With larger-cap oil & gas stocks, such as SU-T, CNQ-T, and XOM-N, we see much more consistency with the dividends to shareholders but the yields are nowhere near as juicier.

    I prefer a mixed approach of both types of stocks within this sector. Although I don’t own DAY, I think it adds an element of risk-free interest to this selection of stocks; I don’t like to have my entire portfolio dedicated to large-cap stable stocks.

    • @TWC,

      Totally agree, the big caps don’t pay fat dividends. They pay lower dividends with low payout ratios. With that higher list of payers, comes higher risk as you know. I too, think DAY will be fun one for the Dividend Growth Index.

  15. Think Dividends says:

    @My Own Advisor You owe me a beer if CML cuts its dividend!
    Tangible business, but CML is more complicated than most people think. I’ve owned it from 2005 to 2010. Nice income stream, but it was most performer (based on share price) ever.

    • @TD,

      You’re on, what’s the timeframe? Say 6 months?

      12 months might be pushing it :) You’re in Toronto right? You can pay up when I come to Toronto for the Canadian Financial Bloggers Conference in another year. Did you hear about this?

      http://cpfc12.com/

      Given that I work in the healthcare industry, and understand it fairly well, I would agree, CML is complicated enough.

  16. @MOA & @ThinkDividends

    I’ll buy you both a beverage of your choice if DAY slashes it’s divvy within the next 6 months. :)

    You’re right in that it will be fun to watch!

    Cheers

  17. Think Dividends says:

    Re: Daylight: Now that Sinopec is buying Daylight, we won’t get to see this story play out. Even though Sinopec is paying more than a 100% premium from Friday’s closing price, DAY is being taken out for less than it started out the year at ($10.43). It is really interesting to see them put themselves up for sale when they were at an all-time low.

    All eyes on CML.

    • @Think Dividends,

      Agreed, although these smaller players are always at risk of being bought out. What about Bellatrix?
      Now TWC gets to pick another flyer for the Dividend Growth Index. Or, he can play it safe.

      All eyes on CML, you made me chuckle. You really want that beer from me don’t you? :)

  18. Think Dividends says:

    Re: CML: Lab Agreement Signed. The agreement reduces uncertainty around cash flows and the company’s ability to pay the dividend. The CEO void and future of the US business are still outstanding and certainly play a role in the long term direction of the company and dividend policy.

    I guess I may be buying the beer.

    • @ThinkDividends,

      Thanks for the news. I was confident about the lab deal, good to know. As for the U.S. operations, I’m much less optimistic! :)

      5 more months to go, and we’ll see about that pint.

      Have a good weekend and stay in touch.

  19. Lazy Investor says:

    I did sell some stocks today and now looking for 1 dividend-paying stock!
    Too much choice out there.
    Can’t wait to check how you guys are doing!

  20. Lazy Investor says:

    @My Own Advisor
    Don’t own any but considering, yes.

Top of Page

Copyright © 2009 to 2014 by My Own Advisor. All Rights Reserved. Admin
Powered by Theme Junkie  •  Designed by Dividend Ninja