Hard to say... has a 6.5% dividend yield now, but for the longest time it was 7.5-8%. Perhaps people don't want to sell it and its being bid up by some funds looking for income?
Putting things into perspective, in 2006 the stock was $20, in 2008 it went down to $6. A low volume stock like this can fluctuate greatly, I think it'll settle at a fair value 6% yield or $20
Been keeping a distant eye on this one. Seems like a good dividend income stock - as long as you are willing to hold it longer term. It's fluctuated... and the yield is nice...
Edit: It's an income fund but in fact there is no difference anymore, right? It's simply a stock that pays a dividend? And you can of course have a capital gain/loss
Been keeping a distant eye on this one. Seems like a good dividend income stock...
Edit: It's an income fund but in fact there is no difference anymore, right? It's simply a stock that pays a dividend? And you can of course have a capital gain/loss
Its an income fund but yes it pays eligible dividends now. Its a bit of a dividend growth stock as well - it's raised its distribution twice in the last year alone.
Yes there is a difference between an income fund versus a dividend paying stock.
No - it does not pay eligible dividends only, a small amount of Return of Capital (RoC) is also paid - will all the bookkeeping to adjust the Adjusted Cost Base (ACB) this requires. This link indicates the tax breakdown of distributions, including RoC: http://www.bpincomefund.com/en/faq.aspx
For this reason, some investors will only put an investment like this in a RRSP or TFSA so that there is no need for the bookkeeping.
Another difference is that it pays a higher tax rate than a dividend stock company does - which is why the distribution payments dropped when the tax rate changed for non-REITs. Then too, most stocks pay 100% eligible dividends, 0% RoC so for the stock, there is no need to adjust the ACB with each payment.
In all cases, trust, REIT, stock - when the investment is sold there will be either a capital gain or loss.
It might be worth checking out the CMF taxation section, "How Investment Taxes Work".
From personal experience, it's a pain in the butt to discover the tax treatment is different than expected and to have to re-calculate with limited info, over several years.
Understanding the tax treatment and setting up the bookkeeping in advance is simple in comparison.
Its an income fund but yes it pays eligible dividends now. Its a bit of a dividend growth stock as well - it's raised its distribution twice in the last year alone.
I don't hold BPF.UN or KEG.UN, but if I'd buy, I'd prefer KEG. (for both : eat dinner and buy shares ). KEG has better yield, better payout and P/B and much better P/E
It looks like 1.34% of the distributions were ROC in 2011. The remaining was eligible, so while there is a minor bookkeeping requirement, it is a very good stock for taxable accounts.
To be clear, I personally don't think the bookkeeping for trusts is that difficult or that much work. It's a few extra minutes compared to the reconciliation and tracking I already do, either by choice or gov't requirement. The main reason I had difficulty originally was that by the time I was aware of it, the required info was difficult to find.
YMMV as other investors hate it, particularly waiting for the final announcement of the amounts.
I may have got to the party a little late with all the recent posts about looking to get out. I bought on mar 19th a mere 13 days ago @ 16.75. I bought it for a long term hold and see this as a potential dividend aristocrat. I was not expecting this stock to take off like it has the last couple weeks in fact I expected it to pull back the minute I bought so I was ready to averaged down. I am still very early in my accumulation phase so I am torn when stocks perform very well after I buy my first tranche. Deep down I know and understand that 2 weeks of price action should be ignored for a long term hold but human nature is human nature(damn you evolution for taking so long to eliminate this trait!). I am getting better at dealing with this psychologically. Many would say I could be trading this up and down,with tight stops, but I am not ready to be a trader yet as I am still reading and playing with pretend money. It is also harder to trade when you can only check the market before and after it closes on most days. Perhaps I should set a stop loss on this one for a quick 5% return if it comes back down in the near term and rebuy later. I have yet to use stops with real $. I tried them in a virtual account and found that when my stop was hit the stock would be sold and then go back up.
Eclectic- thanks for the links to ROC. I currently only have equities RRSP and TFSA but I hope eventually, I will be able to increase my taxable income through investing to ensure that I am doing my part to help pay down the deficit. Regardless, it really helped me understand how ROC affects ACB.
First bought in early 2010 just under $12.00, subsequently bought 600 for the TFSA at $13.63.
I own this and KEG.UN, and would only consider selling either in two cases:
Price appreciates to the point where the yield is sub 5%. (Can buy bank with more upside with similar yield, that could also be an option play if it falls to this yield).
If one is yielding ~2% more than the other, I'd sell and switch into the higher yielding one. I first bought KEG.UN when it was yielding ~2% more than BPF.UN, within a matter of weeks, it had narrowed the gap with a big price jump.
In my opinion, both are great income plays, as long as they yield ~3%+ more than the big banks and telecom guys.
I was considerint buying KEG or BFP last week-week and half...was waiting for some pullback, but they run up too fast...
The question how to identify not expensive high-yielders with good potential return?
The most simple answer I would give is to use the dividend growth model when picking yield stocks.
If you're investing purely for income in the here and now, you might focus more on just the highest yielding stocks, but if you're looking for a growing income stream I think the growth model is better.
Value = Next year's dividends/(required return - expected growth in dividend)
As an example - BPF:
Next year's dividend: $1.2348 (assume 5% growth)
Required return: 10% (assumes I want to see a minimum of 10% total return)
Dividend growth: 5% (example only and likely to be lower in reality)
X = $1.2348/(10%-5%)
X=$24.70
You'll notice that the $24.70 value implies a yield of 5% which is the same amount as (required return-dividend growth).
While simple, the model should work fairly well, but is extremely sensitive to your required return, and the dividend growth. If you feel very strongly that a company can achieve X% dividend growth annually, it should be a good indicator of what value you can assign a company, but that's a difficult metric to predict with any real accuracy.
In theory, anytime the stock is below its "value" it's worth buying, but I'd look for a steep discount rather than just a few %.
depending on unit price I can only see this as a good investment as the interest rate on their credit is much lower than the distribution rate. This move should easily bring them back to or under their mandated target payout ratio. :encouragement:
Now would be a good time to carry out the company's planned share buyback of 1,442,522 units, 9.9% of the Fund's issued shares.
I picked up one tranche today since I sold some when they approached $20
I believe it may be down because they haven't started their buyback yet, or because same stores sales growth was not as high in the last quarter. Still holding here - their payout is still below 100% (their target is 100%)
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