Fortis is a gas and electric utility that operates in several provinces across Canada. Connolly first purchased the stock in 1995 and since then, he has been watching his dividend income grow. Connolly's main metric for evaluating stocks is by comparing the current dividend yield versus the historic average yield. He buys when the yield is above average.
Connolly's adjusted cost base is $6.16 and the dividend currently generates a yield of 16.9% based on his cost. As well as the stock being a cash cow for his portfolio, Connolly has a massive capital gain since Fortis trades above $25 today.
Connolly is an advocate for dividend growth investing and is the author of the Connolly Report. More information can be found at his website: http://www.dividendgrowth.ca/
There's not too many companies to worry about. There might be 20 good dividend growth stocks in Canada – a small group of Canadian stocks that have really good dividend growth, good cash flow and products that you need. It's just a matter of picking a utility, or a bank, or a food retailer, or CN Rail, or a couple of industrials and build a portfolio that way.
4 comments:
Fortis Inc. is the largest investor-owned distribution utility in Canada, serving more than 2,000,000 gas and electricity customers. Its regulated holdings include a natural gas utility in British Columbia and electric utilities in 5 Canadian provinces and 3 Caribbean countries. Fortis owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada.
Murray, it is nice to hear that you have converted to dividend investing. Keep checking www.thinkdividendsblog.com as we will have plenty of updates in on those companies in the future.
Comments:
Of those names that you suggested, I currently own Royal Bank and Shaw. Home Capital, Fortis and JNJ are on my watchlist.
BMO: Are you picking this bank because it has a high yield?
JNJ and PG: great choices for foreign exposure.
CPL: I am not familiar with this name. When buying ADRs be aware that your income stream will fluctuate year-to-year due to changes in FX rates and the dividend policy of the foreign cos. Most ADRs payout only once or twice per year.
XTR: Good choice to get started in REITs. Down the road, you could always change this position for one or two REITs. XTR will give you good exposure to some high quality names like RioCan, Boardwalk, Calloway and CREIT.
Good luck Murray. Keep us posted on your progress.
Big fan of the site, just started dividend investing myself. I looked into BMO and the other big banks, checked out the financial report on SEDAR. After my eyes refocused after reading page after page, it seemed to me that it didn't make as much money as previous years and it failed to raise it's dividend.
Is that why I don't hear people suggesting to invest in BMO? I'd like to hear your take on it. Thanks
There isn't anything wrong with BMO, it just isn't anyone's favorite Bank. It is all relative. When people/analysts rank their favorite banks it is usually in this order: RBC, TD, Scotia, BMO and lastly CIBC. People like Scotia because it is international. TD has a great retail operation. RBC is tops in wealth management and capital markets. BMO doesn't have anything that it excels in relative to the others. One knock on BMO is their U.S. operations.
Tom Connolly likes BMO. I think he has owned it since the 1980s.
BMO has increased their dividend 7 times in the last 5 years. Their 5 year dividend growth rate is 9.7%.
CHEERS
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