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Showing posts with label Canada. Show all posts
Showing posts with label Canada. Show all posts

20 Smaller Capitalized Canadian Dividend Stocks With Really Big Free Cashflow Margins

You may be bored by my articles about the best dividend paying stocks with cheap price ratios and additional potential to grow. 

Sometimes I also create screens from foreign stocks but my database is not so big that I can deliver you detailed data's for free with a long-term dividend history.


Today I've found a great article about smaller capitalized Canadian stocks with great dividend yields and a huge free cash flow. The article was released on the online version of The Globe And Mail and uses the Canadian Morningstar Screener.


Here are the criteria which the author has used:



  • expected dividend yield;
  • free cash flow yield;
  • free cash flow payout ratio;
  • free cash flow margin.

In order to find the best stocks with dividend potential from Canada, the criteria are very good in my view. But the list is full of cyclic and low diversified stocks. That's a major reason why I always look at stocks with a big share of international sales.

However, I believe the list provides a good overview about the opportunities from the Canadian stock market and the author has done a great job. Yields must be sustainable and should not be paid from the substance of the corporate. They should only be a small part of the free cash flow.

How To Invest $15,000 In The Stock Market

A reader of my blog asks me for help by investing 15k of his money. Here is his question:

“I am a Canadian beginner, 56 years old, 29 years with the Federal Govt. I want to retire next year. I have $15K to start, and I don't know where to start...what would you recommend? Right now I have $5K CP, $5K CNR, $1K Sprint...and they are just not doing much right now.

Another question: If Sprint is bought by DISH, will the stock go up, or cease to exist and I would loose my holding? I am holding approx $1000. at $7.15 per share. I don't want to loose my investment to stupidity...Thanks again for your time.

My first thought is that 15k is enough to start investing. I also started to buy stocks with a similar amount in EUR. Ten years later my net worth developed to a six-figure amount and I’ve received a total dividend amount of more than 30k.

My second thought to your current holdings is that they are not really diversified. You have a strong focus on value. Canadian Railways stock could deliver a great stability for your portfolio but with only 3 holdings and 4k of cash it’s hard to make money if you have only two bets. $CNR has good fundamentals and the stock price follows. Canadian Pacific Railway $CP grows dividends but the earnings go down. The stock price explodes. Sprint Nextel $S received a bid from $DISH – They will be off. All have in common that they are infrastructure bets and deeply integrated within the economy and they all have a very low dividend yield. Infrastructure is a very capital intensive business and also very inflexible.

To your second question: You will receive cash in exchange for your Sprint shares if the deal passes through. DISH offers $7 per Sprint share.

I would recommend to increase your bets when the time is right to invest. If you have a cheap broker you can build a better portfolio by owing more stocks with a lower value. Some offer a $1 trade commission. It’s hard to make money and with 15k and a solid return of 8 percent coul result in $1,200 capital income per year of which $450 could be dividends, calculated on a 3% dividend yield. All you need is to be disciplined and diversified.

Below is a nice graphic about how to buy stocks and build a dividend portfolio with only $5,000.


How to Start a Dividend Portfolio Source: Intelligentspeculator.net

If you have any further questions, to not hesitate to contact me. If you like my answer, please give me a Facebook Like. You can also subscribe to my free e-mail list or follow me on Facebook or Twitter.

Happy Investing!
Tom Roberts

Wireless Communications And Cable Company Rogers Is New In My Dividend Yield Passive Income Portfolio

Last Thursday, I placed 30 shares of the Canadian wireless communication company Rogers in the Dividend Yield Passive Income Portfolio (DYPI).


Rogers operates as a communications and media company in Canada. The company's Wireless segment offers voice and high-speed data services, as well mobile devices and accessories. It markets its products and services under the Rogers, Fido, and chatr brands. Its Cable segment offers cable television, high-speed Internet access, and cable telephony services. As at December 31, 2012, this segment had 2.2 million television subscribers; and 1.9 million high-speed Internet subscribers, as well as provided home phone services to approximately 1.1 million customers.

I like stocks with a cable business. At the stock market, they are classified as CATV Sytems. They give you a great stability due to subscriptions. Comcast or DIRECTV are also two great company from the United States. Cable companies are deeply integrated within an economy. They have normally a high debt and are inflexible in terms of growth but they are part of the economy and deliver solid return to pay down the debt. Canada is a great country with better financial ratios than the United States. The population is growing in both countries and will go forward. That's why I like cable stocks.


Earnings And Dividends Of Rogers (Click to enlarge)

The current dividend of Rogers amounts to 3.33 percent and the P/E ratio is 15.76. Earnings of the company are expected to grow by 4.3 for the next year and 9.63 percent for the next five years. CATV System stocks have a higher forecasted growth.

The 30 shares were bought at cost of $51.06 and reduced my cash by $1,536.80. As of now I still have $62,997.85 for further dividend stock acquisitions.

The DYPI-Portfolio was funded virtual with $100,000 on October 03, 2012. Since the date of funding, stock holdings are up 8.74 percent or $3,260.80.


Dividend Yield Passive Income Portfolio Holdings (Click to enlarge)

Latest Portfolio Transactions (Click to enlarge)

Due to the high cash amount (60 percent is still not invested) the full portfolio performance is only 3.50 percent.


Portfolio Performance (Click to enlarge)

I plan to put each week one stock holing into the DYPI-Portfolio. My aim is to build a passive income of $3,000 - $4,000 by the end of the year. Dividend payments should come from 50 to 70 stocks. The average portfolio yield is now at 3.32 percent and the yield on cost, the yield on my cost basis is at 3.62 percent because of the capital gains.

The new stake will give me $48.69 in additional yearly dividends. The full dividend income is now estimated at $1,357.76.

What do you think about Rogers Communications? Do you own shares of the compay or would you put other stocks into the portfolio? Please let me know by leaving a comment on my Facebook page. If you visit my site, you can also make a like for my work. My work is completly free for everybody.

Here is the income perspective of the Dividend Yield Passive Income Portfolio:

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
12.97
3.98

28.90
50
$64.25
$1,624.00
LMT
Lockheed Martin C
11.3
4.55

92.72
20
$86.00
$1,930.40
INTC
Intel Corporation
10.25
4.05

21.27
50
$44.25
$1,091.75
MCD
McDonald's Corpor
18.45
2.97

87.33
15
$44.10
$1,495.35
WU
Western Union Com
8.8
3.02

11.95
100
$45.00
$1,504.00
PM
Philip Morris Int
17.79
3.65

85.42
20
$67.18
$1,854.20
JNJ
Johnson & Johnson
21.05
3

69.19
20
$48.80
$1,630.60
MO
Altria Group Inc
16.71
5.03

33.48
40
$69.20
$1,375.60
SYY
Sysco Corporation
19.24
3.11

31.65
40
$43.60
$1,406.80
DRI
Darden Restaurant
15.45
3.81

46.66
30
$57.90
$1,550.40
CA
CA Inc.
12.71
4

21.86
50
$50.00
$1,259.00
PG
Procter & Gamble
17.49
2.92

68.72
25
$56.20
$1,926.50
KRFT
Kraft Foods Group
18.68
3.88

44.41
40
$80.00
$2,061.20
MAT
Mattel Inc.
19.52
2.98

36.45
40
$51.60
$1,750.80
PEP
Pepsico Inc. Com
19.96
2.75

70.88
20
$43.00
$1,582.20
KMB
Kimberly-Clark Co
21.93
3.13

86.82
15
$45.45
$1,469.70
COP
ConocoPhillips Co
8.98
4.39

61.06
20
$52.80
$1,202.00
GIS
General Mills In
17.87
2.65

42.13
30
$38.85
$1,479.30
UL
Unilever PLC Comm
20.84
3.02

39.65
35
$43.89
$1,478.40
NSRGY
NESTLE SA REG SHR
20.08
2.95

68.69
30
$63.15
$2,174.10
GE
General Electric
17.88
3.12

23.39
65
$46.80
$1,502.80
ADP
Automatic Data Pr
22.55
2.57

61.65
25
$41.50
$1,625.75
K
Kellogg Company C
24.19
2.71

61.52
25
$43.75
$1,610.75
KO
Coca-Cola Company
20.42
2.6

38.83
40
$41.80
$1,617.60
RTN
Raytheon Company
10.54
3.42

57.04
20
$40.00
$1,175.80
RCI
Rogers Communicat
15.27
3.2

51.06
30
$48.69
$1,531.80
















$1,357.76
$40,910.80
















Average Yield
3.32%
















Yield On Cost
3.62%