The Borgford Boys
October Results – Correction Time
October was another bumpy month with the Canadian market falling well into correction territory and the US markets getting very close to a full correction. By the end of the month, however, the US markets had recovered and were back to setting new record highs. The Canadian market was off its lows but still down over 6% in the past two months.
My All Canadian portfolio was down for the month but still holds a respectable 8.4% YTD gain. My mixed portfolio (the one that I manage using my strategy) was up over 1% for the month and over 15% YTD.
|October and YTD|
Taking advantage of the market pull-back, I completed a series of sales and purchases this past month.
Sales: ADP, CDK
See my previous commentary on ADP. I am trying to keep all my stocks above the 3% dividend level, so I am gradually culling off my lower yield stocks. As a result I sold my position in ADP and its spin-off, CDK, which doesn’t fit my criteria. In upcoming months I will be disposing of more of my lower yielding stock in favour of higher yield holdings.
Purchases: RUS.TO, HSE.TO, KMB, PEG, TOT BNS, UL, VZ
All of these stocks were from my previous suggested list of purchases. High quality stock, above 3%, dividend growth. However, HSE has not increased its dividend in a long time, but I am hoping to
My weighted average dividend yield is now about 3.73%, providing the bulk of my retirement income. Canadian dividends provide a very tax efficient income, while US dividends are taxed as full income.
Peter in Doha posed an interesting question.
Recently I bought 400 shares of TOT around what appeared to be their bottom. Yahoo finance indicates their divined yield is currently around 5.8%, so that’s good.
I’ve also bought some ETFs. I know you prefer stocks, but I like to have some ETFs. I feel secure thinking they give me good diversification. Because my accounts are overseas, I can really only by ones on the London Stock Exchange. One I own is UDVD (http://www.bloomberg.com/quote/UDVD:LN). It’s the Dividend Aristocrats. But its yield is only about 2%. Another I own is IDVY (http://www.bloomberg.com/quote/IDVY:LN). It’s yield is much higher – 4.5%.
My questions is – am I missing anything on the IDVY? It looks like it’s a diversified ETF of Europe’s top dividend payers yielding 4.5%. Like most of Europe, it’s struggled lately with regards to market value. But the dividend yield seems solid. Do you see any ‘hidden issues’ I’m missing, such as fees I haven’t accounted for?
This is my response to his question and actions:
Here is another blog site that addresses the issue as well:
- Investing in dividend growth stocks is a long-term proposition — you don’t have to watch your portfolio or the market on a daily basis.
- For the most part, daily, monthly and yearly movements are just noise in the system.
I added to my KMB position this month. Here are a couple of articles on KMB.
In follow up to a previous discussion, I sold my position in ADP and its spin-off, CDK. HERE is a related article. CDK is displaying speculative tendencies and ADP is at a high share price with a dividend yield below my retirement target.
Suggested Stocks (ValueLine A++, 3% yield, 10 year dividend growth)
Note: VZ, and oil companies come up tops for current purchasing while MCD is not recommended for right now. PEG is a good conservative play, with only modest growth.
|Company||Ticker||Dividend Yield||Dividend Growth 10-Year|
|Royal Dutch Shell ‘B’||RDSB||5.36||7|
|Baxter Int’l Inc.||BAX||3.05||10|
|Exxon Mobil Corp.||XOM||3.05||8.5|
|Merck & Co.||MRK||3.29||1.5|
|Public Serv. Enterprise||PEG||4.03||2.5|
|Novartis AG ADR||NVS||3.25||15.5|
|Procter & Gamble||PG||3.14||10.5|
|Unilever PLC ADR||UL||3.91||9|