# Want to dump $2k CAD in dividend-paying stock



## MasterCard (Aug 2, 2013)

Call me weird, but I really like stocks that pay monthly dividends for some reason.
I guess because I'm big on passive investing, so I think having some type of instrument that pays a monthly income is easier to map to monthly expenses versus something that is paid out every 4 months.
Anyway.

Any thoughts? I have one US-based real-estate stock and a Canadian retirement-home based stock.


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## Synergy (Mar 18, 2013)

2K is really not a lot of money to start a position in an individual stock. If you don't require the monthly income why does it matter if you're getting paid monthly or quarterly? It's easier to DRIP shares with stocks that pay quarterly distributions. Additionally, if you're a young investor you may want to focus on your total return - biasing capital appreciation or dividend growth rather than focusing entirely on monthly pay-outs and dividends. A lot of the stocks in the energy sector pay monthly distributions - CPG, BTE, IPL, PPL, etc.

Have you considered the Canadian banks? They don't pay monthly but they are great stocks to own.

It would be hard to provide any recommendations without knowing more about one's overall portfolio.


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## fatcat (Nov 11, 2009)

MasterCard said:


> Call me weird, but I really like stocks that pay monthly dividends for some reason.
> I guess because I'm big on passive investing, so I think having some type of instrument that pays a monthly income is easier to map to monthly expenses versus something that is paid out every 4 months.
> Anyway.
> 
> Any thoughts? I have one US-based real-estate stock and a Canadian retirement-home based stock.


http://www.theglobeandmail.com/glob...ortfolio-of-monthly-dividends/article9224547/


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## SkyFall (Jun 19, 2012)

not too sure but

with $2k you won't see any difference, let's take a stock that has a dividend yield of 4-5% on $2000 it's only $80-$100/year! yeah a year! that's approx. one meal at McDonald's per month


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## doctrine (Sep 30, 2011)

There are dozens of monthly dividend paying stocks on the TSX. I own shares in seven: BPF.UN, CHW, FN, HWO, CFN, TPH and NIF.UN


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## lostwords (Feb 21, 2014)

I've recently brought 1000 shares of tbe at $1.79 per share with 0.016 div for each share. Roughly $192 a year if they don't cut their dividends. So that's roughly 10% per year on dividend. Better than what bank pay u for keeping that $2000 in the bank


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## Canadian (Sep 19, 2013)

The cash yield earned on equities should never be compared to the interest earned in a bank account. These are two very different types of investments (I'm not even sure I would call cash sitting in the bank an investment) and equities bear many more risks. To say one is better off holding a high yield stock because they earn x% more (let's use 10%) than they would in their bank account is a naive statement because if one holds the stock for exactly 1 year, and the price drops by 10% or more (which could very easily happen), they would have been better off bearing no risk by leaving their money in a bank account.


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## Beaver101 (Nov 14, 2011)

I would rather first use the $2K to pay off my MasterCard balance instead - I just saved myself a bundle on interest charges. :biggrin:


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## Time4earlyretirement (Feb 21, 2014)

Any of the Brookfield subsidiaries would be good:

BIP (infrastructure)
BPO (Office properties)
BPY (property partners)


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## Lena100 (Mar 16, 2014)

Time4earlyretirement, I have a small position in both BIP and BPY, but I find BPY too volatile and I am considering selling off my position once I recoup my investment. My cost base is 21.82US$. Is this company worth long time hold. Thanks


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## MrMatt (Dec 21, 2011)

I'd grab some bank stock, TD and BNS are my favourites.
TD, well they've done great and I'm a really happy customer.

BNS, well they're a bank, and they're not CIBC (which I hate)


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## Rusty O'Toole (Feb 1, 2012)

To get at the same thing in a different way.... you could buy stocks with quarterly dividends that pay in different months and build up a retirement portfolio that gives you a monthly income. This could open up your investing options, while giving you the monthly income.


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## gibor365 (Apr 1, 2011)

MrMatt said:


> I'd grab some bank stock, TD and BNS are my favourites.
> TD, well they've done great and I'm a really happy customer.
> 
> BNS, well they're a bank, and they're not CIBC (which I hate)


whatever, I hate BNS (as a customer) and like CIBC  , but I hold all big 6


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## MrMatt (Dec 21, 2011)

gibor said:


> whatever, I hate BNS (as a customer) and like CIBC  , but I hold all big 6


At the retail level, I personally, as well as many friends and family have had serious problems at CIBC, they were wrong, it would have been easy to fix and they didn't step up. Knowing what I know now, I would have complained more effectively.

I'm a BNS customer, but their customer service is just a mess. They just don't seem that on top of things, however their performance has been quite good.


TD, it's my primary bank, and they are doing excellent at customer service. I've moved and dealt with many branches, and there is 1 that stands out as bad.
The others were all good to excellent. The bank staff isn't any more competent than the others, things just seem to work better in general.
I think their retail focus is working and should be very good for them. Unless the government steps in and demands more "free" services for customers, which might hurt their retail operating margins.


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## Nemo2 (Mar 1, 2012)

MrMatt said:


> TD, it's my primary bank, and they are doing excellent at customer service.


We moved from BMO (Investorline), (with whom we had numerous issues which just became intolerable), to TD a few years ago......they're not perfect, but they're a damn sight better than what we had.


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## Time4earlyretirement (Feb 21, 2014)

Lena100 said:


> Time4earlyretirement, I have a small position in both BIP and BPY, but I find BPY too volatile and I am considering selling off my position once I recoup my investment. My cost base is 21.82US$. Is this company worth long time hold. Thanks


BPY is probably my favourite out of the 3 for appreciation based. It will definitely be more volatile given the nature of their investment properties compared to infrastructure, but the yield is safe and it is well managed. 

IMO its a buy and hold; you may want to shift your allocation % between the 2 to fit your risk profile.


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## gibor365 (Apr 1, 2011)

_At the retail level, I personally, as well as many friends and family have had serious problems at CIBC, they were wrong, it would have been easy to fix and they didn't step up._ I had account with BNS when we just came to Canada in 1999... They had so bad customer service that I got pissed of and we moved all accounts to TD... Now TD ours 4th bank  after CIBC, ING and PT ...
With CIBC we have stuff account, so no any problems  and if there are , they got fixed very fast.... Also, I found that discount brokerage in CIBC is much better thatn in TD, cheaper trades, much better FX rates and so on...
But, again, as an investor I like all big 6 Canadian banks....


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## thompsg4416 (Aug 18, 2010)

I can sympathize with the OP. I've at times pondered monthly divided payers just simply for the fact its (relatively) an instant reward vs waiting for the quarterly dividend payers. Poor reasoning for an investment(op may have different reasons) but I'm man enough to admit it That said I never actually made the investment so I'm ok


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## Time4earlyretirement (Feb 21, 2014)

thompsg4416 said:


> I can sympathize with the OP. I've at times pondered monthly divided payers just simply for the fact its (relatively) an instant reward vs waiting for the quarterly dividend payers. Poor reasoning for an investment(op may have different reasons) but I'm man enough to admit it That said I never actually made the investment so I'm ok



Unless you're spending the monthly right away, you're actually losing on potential money (however minute) under the assumption that the dividends received are not great enough to be traded intra-month to earn the same yield as the stock, in theory.


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## Moneytoo (Mar 26, 2014)

Time4earlyretirement said:


> Any of the Brookfield subsidiaries would be good:
> 
> BIP (infrastructure)
> BPO (Office properties)
> BPY (property partners)


What do you think about their preferred shares? Just got notification from WebBroker, thinking to buy some:

Brookfield Asset Management Inc. 4.50% Rate Reset Preference Shares, Series 40

Short Description: Offering of Cumulative, Class A Rate Reset Preference Shares, Series 40 via Bought Deal 
Price: $25.00 CDN per share.
Settlement: On or about June 5, 2014.

Thank you


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## Time4earlyretirement (Feb 21, 2014)

Moneytoo said:


> What do you think about their preferred shares? Just got notification from WebBroker, thinking to buy some:
> 
> Brookfield Asset Management Inc. 4.50% Rate Reset Preference Shares, Series 40
> 
> ...


5-year reset based on 2.83% + prevailing 5 - year Canadian government bond rate at that time. Not familiar to the use of preferred shares so I can't really say, but a reset of every 5 years seems to be a double-edged sword.


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## HaroldCrump (Jun 10, 2009)

Time4earlyretirement said:


> 5-year reset based on 2.83% + prevailing 5 - year Canadian government bond rate at that time.


This is a blue-chip company. 2.83% spread is more than fair for a pref. like this.
BAM is comprised of several sub-businesses, most of which have higher distribution yields than BAM.
This type of pref. issued by the parent corp. is a way to play the underlying yield, at the expense of capital growth.


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## Moneytoo (Mar 26, 2014)

Thank you, *Time4earlyretirement and HaroldCrump*! 

On the thread subject, we're trying to dump #3-4k USD in one more dividend US stock (already have a few). Wanted to buy something "safer" this time, but 3% dividends at the best (like PG or CSCO) - make me wonder whether maybe wait for correction (where is it?! )


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## Time4earlyretirement (Feb 21, 2014)

Moneytoo said:


> Thank you, *Time4earlyretirement and HaroldCrump*!
> 
> On the thread subject, we're trying to dump #3-4k USD in one more dividend US stock (already have a few). Wanted to buy something "safer" this time, but 3% dividends at the best (like PG or CSCO) - make me wonder whether maybe wait for correction (where is it?! )


CSCO with a beta of 1.33 isn't exactly what I'd consider safe. 

Maybe consider Wal-mart, Mcdonalds, or tobacco companies such as Altria.


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## Moneytoo (Mar 26, 2014)

Time4earlyretirement said:


> CSCO with a beta of 1.33 isn't exactly what I'd consider safe.
> 
> Maybe consider Wal-mart, Mcdonalds, or tobacco companies such as Altria.


Yeah, Altria's my fave at the moment, but it's trading near 52-weeks high, so just watching it for now - along with 20 or so more (like Mcdonalds, Pepsi & KO ) For Canadian dividend stocks, will just buy ZDV ETF I think. At least it's yielding ~4.5% (unlike US ones) with MER 0.4%. Somehow I find it even harder to pick Canadian stocks - so ready to pay a bit extra for someone else to do it (and save myself time and the trading fees )


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## My Own Advisor (Sep 24, 2012)

What about EMR for a U.S. stock?

It's a steady dividend stud, bond-like.


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## Justin1980 (Feb 23, 2013)

I was looking into ESV today, might be worth looking into.


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## Moneytoo (Mar 26, 2014)

My Own Advisor said:


> What about EMR for a U.S. stock?
> 
> It's a steady dividend stud, bond-like.


Yeah but the Yield is only 2.5%... Since our first US stock purchase was Prospect Capital (PSEC) that yields more than 10% (just got our first dividend today!), it's hard to go that low...

Anyways, I seem to be hijacking somebody else's thread again - thank you and sorry, I'm not OP, and still learning...


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## AltaRed (Jun 8, 2009)

Time4earlyretirement said:


> 5-year reset based on 2.83% + prevailing 5 - year Canadian government bond rate at that time. Not familiar to the use of preferred shares so I can't really say, but a reset of every 5 years seems to be a double-edged sword.


Off topic.... but a reset every 5 years is designed to allow the yield to somewhat follow the trend in 5 year GOC bond yields. For example, if the going GOC5 rate is 1.67%, then 2.83+1.67 = 4.5% (same as the initial dividend rate). If GOC5 rates go down by time of reset, then it is appropriate that the dividend yield also go down at that time. If GOC5 rates go up by time of reset, then the dividend should go up as well at that time. If you don't like FixedResets, then look at DiscountPerpetuals, either NVCC compliant (or not), etc. etc. Prefs are complex and need much in depth study.


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