Thursday, July 14, 2011

State of My Dividends Q2 2011

Today, I am updating my spreadsheet on dividends. For all my stocks, I have shown in the “11” (for 2011) column, if a company has actually increased their dividend yet for their current financial year ending in December 2011. In the “div” column preceding, I show the percentage increase in the dividends for the company’s financial year ending in 2011. I have also added columns of “Div” and “12” for any of my stocks that have financial years not ending in December 2011 and they are therefore into their 2012 financial year.

For the second quarter of 2011, I had 7 companies increase their dividends. The first 3 I will talk about today. I will cover the remaining 4 tomorrow. You can use your mouse to highlight a line in my htm documents.

CDN Real Estate (TSX-REF.UN);
Computer Modelling Group Ltd (TSX-CMG);

Shoppers Drug Mart (TSX-SC);
SNC-Lavalin (TSX-SNC);
TD Bank (TSX-TD)
TransCanada Corp (TSX-TRP);

I had 7 companies also upping their dividends last year in the 2nd Quarter. Difference from above list was Emera (TSX-EMA) which has not increased dividend yet, Pareto (TSX-PTO) which I sold, and Melcor (MRD) which increased at different time. The three added are CDN Real Estate (first increase for a while) TD Bank (first increase for a while) and Computer Modelling Group (always increasing dividends at all different times).

The first stock to talk about is BCE Inc. (TSX-BCE). This company has a fairly good recent record of increasing it dividends, but they do not increase them every year. The 5 and 10 year growth in dividends is 5.6% and 3.4% per year, respectively. They also only paid out 2 dividends in 2008, when they thought they were going to go private. This, of course, did not occur and they restated the dividends, so dividends really did not change in 2008.

The company increased their dividends for January 2011 by 7.7%. They again increased them for April 2011 by5.1% for a total increase this year of 18%. Their Payout Ratios for 2011 are expected to be 70% for Earnings and 27% for cash flow. See the spreadsheet.

The next stock to talk about is Canadian Real Estate Income Trust (TSX-REF.UN). Unit trust companies are not known for big dividend increases, but for good yields. This is a trade off when you live off of dividend income. Having some unit trust companies will raise your portfolio yield, but the dividend income will not rise much year to year. Mostly, you can expect distribution rises to keep pace with inflation.

The dividend increase for CDN Real Estate Trust for this year is 2.1%. This income trust has raised its dividend by just under 2% per year over the last 5 years. This is probably barely keeping it in line with inflation. We are lucky that inflation has been low recently, but I understand that it might pick up. The current yield current on this stock at 4.5% is not a bad yield. See the spreadsheet.

The last stock to talk about today is Computer Modelling Group Ltd (TSX-CMG). This is a small cap tech stock. They raise their dividends constantly and are often giving out special dividends. They make money by people in the oil and gas industry using their software. They pay out almost all their profits in dividends. Although their dividend yield is not particular high at 3.2%, the dividend increases over the past 5 years is 50% per year. This investment is risky. See the spreadsheet.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

1 comment:

  1. Susan,

    Thank you for an interesting write-up today. You said CMG is risky and the dividend yield is not particularly high (although the dividend increase is pretty good in the past 5 years), why invest in this stock if you need dividend income to live on? Why not take the money and invest in BCE which has a higher yield and is much less risky?