# Critic my Dividend portfolio?



## kyboch (Dec 23, 2011)

Equal weight, around 3G in each except BCE which is 6G, just added to position on the dip. I think it's pretty diversified. Weighted yield is just shy of 5%. Telecoms, pipelines, banks, oil&gas, utilities, industrials, some restaurants and entertainment stocks too. Looking to hold long term and get some slow growth and in the mean time collect the divs. What do you think?
AD.TO
ALA.TO
AW.UN
BCE.TO
BEP.UN
BMO.TO
BNS.TO
BPF.UN
BTE.TO
CGX.TO
CHE.UN
CJR.B
CM.TO
CNR.TO
CPG.TO
CU.TO
CUS.TO
CVE.TO
DH.TO
IPL.UN
KEY.TO
NA.TO
NPI.TO
PPL.TO
RCI.B
SJR.B


----------



## Young&Ambitious (Aug 11, 2010)

26 companies is a lot...how do you plan to keep an eye on all of those companies?


----------



## Square Root (Jan 30, 2010)

What are your objectives, age, net worth,etc. I would have chosen TD over BMO. Probably too many small positions.


----------



## Sampson (Apr 3, 2009)

I'm not a big fan.

1. No Foreign exposure.
2. Positions are too small.
3. Overweight in higher yield industries (inadequate diversification, too concentrated in Financials, Resources, and Utilities).
4. Focus only on dividend payers and not total returns.

Maybe needs reworking.


----------



## doctrine (Sep 30, 2011)

I think you'll probably do well. There are a few names I wouldn't personally own, like NPI, CJR.B, CVE, CNR, CU, SJR.B are definitely no's for me. But I do own a lot of the other ones. Nothing wrong with 26 names in my mind, I personally own 24.


----------



## Ethan (Aug 8, 2010)

I think you need to diversify a little more.


----------



## kyboch (Dec 23, 2011)

This represents just 20% of my portfolio, the rest is in index etfs, XIC, VUS, VEF, CHB and XBB. 
I know I could buy some US dividend stocks like MCD etc. but I want the tax benefits of Canadian dividends. Holding VUS and VEF gives me plenty of international exposure. 
Not sure what the knock on "small positions" is. Can someone explain that to me?
It's not easy being diversified with strong blue chip stocks on the TSX, as the bigger companies are mostly resource, utilities and financials. Any suggestions on good dividend paying Canadian based consumer or health stocks like pfizer or jnj in the US?
As far as keeping track of the 26 positions I don't think that is too hard really. I have them on a google finance spreadsheet as well as the g&m watchlist and I keep a close track of the financial news. Most of these are buy and hold so I don't anticipate doing much trading.


----------



## doctrine (Sep 30, 2011)

THI is a great consumer type stock, although you have AE and BPF already, THI is I think a different market and is also a different stock in that its a low dividend but high growth and also a buyback stock - very similar to S&P500 stocks. Another one is ACQ which is auto dealerships.


----------



## scomac (Aug 22, 2009)

kyboch said:


> Not sure what the knock on "small positions" is. Can someone explain that to me?


Too much work to stay on top of and too small an allocation to have a meaningful impact on portfolio performance. 

These types of approaches seem wonderful in theory, but generally prove out to be ineffective in a practical sense.

If you are intent upon stock picking with 20% of your portfolio, then I would limit the selection to your *10 best ideas*. That way, each individual position will be large enough to have a meaningful impact on the portfolio as a whole while still keeping risk in check through diversification and exposure limits. Furthermore, your workload is reduced or more to the point, likely to be kept on top of versus letting things slide when life gets in the way.


----------



## Sampson (Apr 3, 2009)

scomac said:


> then I would limit the selection to your *10 best ideas*.


After you posted the remaining details of your portfolio things change slightly, but only slightly.

Do you believe these are the creme of the crop, or are you focused on dividend yield? Sqrt poses some good questions. Total returns from these picks might not be maximum. Are BNS, BMO, CM, and NA truely going to yield the highest total returns in the Canadian Financial sector? What were your entry prices? Will these perform better over your holding period than TD or RY?

If there is ANY reason to believe these are not the BEST picks in each sector, why make them? As mentioned above, the work to either do the fundamental or technical analysis (whichever your flavor) for this many stocks takes a lot of time, not just reading about the news, but understanding momentum or earnings.

The portfolio seems too focused on present day dividends with a possibility of growth and not on finding the companies that will give the greatest returns. If you need the income for retirement etc, then this changes everything.


----------



## blin10 (Jun 27, 2011)

I like how some say too many dividends and not enough stocks for greatest returns, like it's an easy thing to do, in fact I rather stick with a big company paying dividends then some new company that pays nothing and you might hold it forever not earning a penny.... kyboch, you are fine


----------



## kyboch (Dec 23, 2011)

Hey Sampson:
Thanks for your thoughtful reply. I totally understand what you are saying about picking the BEST in each sector. I guess for me the problem is how do I know which will be the best in the future? I chose 4 of the banks because they all pay very good dividends, are relatively stable, but I don't have a clue which one will provide the highest total return over the next few years, so I hedged my bets and bought 4 of them. I've done the same with each sector. For instance I bought BCE and RCI.B because I have no way of knowing which one will do better. Who would have thought that BCE would be denied the astral media purchase, I think most people thought it was a done deal, and BCE share price has dropped where as RCI.B is up almost 9% since I bought it.

Man if I knew the ten best stocks that offered a 1.5% dividend but would grow 20% per year I would be down with that in a heartbeat, but the way I see it nobody can tell that. But what I can tell is that a stock offering a 5% dividend and dividend growth is something that I'm going to pocket for sure I mean actual money coming into my cash account! whether or not the stock increases in value I can't say but obviously I hope for the best and in the long term if a company is offering a good product/service they will most likely increase their value. I don't know I think that getting a decent dividend along with dividend growth takes some of the uncertainty out of owning a stock rather than just hoping and praying that it rises in value.

Who knows about next year or the year after but according to the globe and mail my portfolios average total return over the last year would have been 18.79% and 11.65% over the last 5 years. I think that's pretty good growth

Again, thanks for your input. Different opinions help me to examine my approach which is all good man.


----------



## Hawkdog (Oct 26, 2012)

kyboch said:


> Equal weight, around 3G in each except BCE which is 6G, just added to position on the dip. I think it's pretty diversified. Weighted yield is just shy of 5%. Telecoms, pipelines, banks, oil&gas, utilities, industrials, some restaurants and entertainment stocks too. Looking to hold long term and get some slow growth and in the mean time collect the divs. What do you think?
> AD.TO
> ALA.TO
> AW.UN
> ...


You look well diversified, but what was the initial entry cost? It has been discussed here that maybe you hold to many stocks. I tend to agree for two reasons.
1. most of us have to pay to a fee to buy a stock. So you if bought a 25 dollar stocks that pays a .05 dividend per unit/share a month it could take 6 months just to cover the fee. If you bought 26 stocks at 25 bucks per transaction, thats 650 bucks, if you 10 stocks at 25 it would only be 250 bucks. 

2. As mentioned previously unless you have lots of time on your hands you require a lot of time to watch this many stocks.

just my two cents. I am no expert.


----------



## Sampson (Apr 3, 2009)

I guess the point is that many of these lists often come out the same, and the pattern to them does seem to be yield.

Taking Canadian banks for example, most people believe the long term prospects of RY and TD to be better than BNS and BMO. CM was hit hard and may represent the greatest value at current prices, and NA is certainly in a growth and expansion phase also. However, without knowing the background of why BNS and BMO over RY and TD, its impossible for anyone to judge.

My point is only to have a reason. You are right, it might be difficult to pick the winners upfront, but high yielders often does not equate to good performers. This is my biggest problem with focusing on dividend only.

As long as you have done some form of analysis, any investment could be fine, just don't sort a list of stocks by yield, and pick those.


----------



## scomac (Aug 22, 2009)

kyboch said:


> Who knows about next year or the year after but according to the globe and mail my portfolios average total return over the last year would have been 18.79% and 11.65% over the last 5 years. I think that's pretty good growth.


So what you are saying is that you have based your decisions on what these companies dividends and share prices have done in the past year/5 years. You're basing the future on these metrics alone? If so, good luck with that. I can see why you want to own so many companies.


----------



## kyboch (Dec 23, 2011)

Not saying that at all, just making the point that these companies although paying a respectable dividend have also shown decent growth.


----------



## scomac (Aug 22, 2009)

FWIW, I wasn't commenting on anything that you had picked. No matter how you go about doing it, you must have more confidence in some names than in others. You can't tell me that your 25th idea is as good as your first. If it is, then I don't think you really know what you are doing because all things are not created equal at any given point in time. You have to remind yourself that only a minority portion of your portfolio is being dedicated to stock picking. So PICK stock! Don't assemble a group where the good ones will cancel out the not-so-good ones and you end up with the index return plus a whole lot of extra work for your efforts. It may make for good cocktail party conversation, but do you really need the aggravation to end up in the same place as if your sat back and twiddled your thumbs?


----------



## blin10 (Jun 27, 2011)

disagree, names with more confidence usually trade at 52 week highs confidence levels... i'm not saying to pick complete garbage but you need to buy some at a reasonable levels... you can't have 100k in 3-4 stocks, if something happens to one company you'll be in a bad shape... not too mansion you don't buy stocks all at once and that's it, it takes time to build your portfolio, he would spend commission money either way over time averaging down/up even if he picked 4-5 companies, if he's not trading these stocks commission don't matter over long term



scomac said:


> FWIW, I wasn't commenting on anything that you had picked. No matter how you go about doing it, you must have more confidence in some names than in others. You can't tell me that your 25th idea is as good as your first. If it is, then I don't think you really know what you are doing because all things are not created equal at any given point in time. You have to remind yourself that only a minority portion of your portfolio is being dedicated to stock picking. So PICK stock! Don't assemble a group where the good ones will cancel out the not-so-good ones and you end up with the index return plus a whole lot of extra work for your efforts. It may make for good cocktail party conversation, but do you really need the aggravation to end up in the same place as if your sat back and twiddled your thumbs?


----------



## blin10 (Jun 27, 2011)

his portfolio is over 50g's, he pays 9.95 tops per buy



Hawkdog said:


> You look well diversified, but what was the initial entry cost? It has been discussed here that maybe you hold to many stocks. I tend to agree for two reasons.
> 1. most of us have to pay to a fee to buy a stock. So you if bought a 25 dollar stocks that pays a .05 dividend per unit/share a month it could take 6 months just to cover the fee. *If you bought 26 stocks at 25 bucks per transaction, thats 650 bucks*, if you 10 stocks at 25 it would only be 250 bucks.
> 
> 2. As mentioned previously unless you have lots of time on your hands you require a lot of time to watch this many stocks.
> ...


----------



## scomac (Aug 22, 2009)

blin10 said:


> disagree, names with more confidence usually trade at 52 week highs confidence levels... i'm not saying to pick complete garbage but you need to buy some at a reasonable levels... you can't have 100k in 3-4 stocks, if something happens to one company you'll be in a bad shape... not too mansion you don't buy stocks all at once and that's it, it takes time to build your portfolio, he would spend commission money either way over time averaging down/up even if he picked 4-5 companies, if he's not trading these stocks commission don't matter over long term


You are missing my point entirely. My confidence level in choosing a particular stock at a particular time (and price) has nothing to do with what the market as a whole is thinking; more likely the opposite. But, that is the way of things when you have a strong value tilt in your stock selection. 

You claim that you can't have $100K invested in only 3 or 4 stocks; I say why not when that money is still only 1/5 of the entire investment pool. That would mean that each individual holding still only represented 5% of the total portfolio. Furthermore, don't go putting words in my mouth when in fact I counseled that the OP stick to just *10* picks rather than his current 26.

I think what's really at work here is the OP is afraid of being wrong. There's nothing sinister about that. You just have to realize that you will be wrong from time to time, but that is the nature of investing. You only need to be right more often than you are wrong. That's why he/she has the bulk of their assets in broad market ETFs. That's why he/she has decided that they can't limit their stock picking to any less than 26 names. And that is why I said originally that these sorts of operations (as described by the OP), while wonderful in theory are largely ineffective in practice in exchange for a great deal of work.


----------



## blin10 (Jun 27, 2011)

woa, dude you need a hug, calm down... everything is ok, it's a discussion


----------



## HaroldCrump (Jun 10, 2009)

I have to agree with scomac.
The portfolio posted above appears to be a high yield mutual fund.
If that is what is desired, just buy a dividend ETF or such.

It is a mix of some good dividend payers that are currently at or close to their 52 week highs.
There are some that are perpetual dogs.
Then there are those that have a perception of high yield because stock price has fallen a lot in recent times.

Unless the OP explains the criteria or the thinking behind the selections, it is hard to comment.
If you run a stock screen just based on yield, you will get similar results.


----------



## Eder (Feb 16, 2011)

I own 40-45 individual stocks at any given time. The reason is that as bullish as I might be on financial stocks, I am hard pressed to pick the one winner so I buy a basket of financial stocks...maybe 5 or 6 and get to exclude the obvious pigs...can't do that with an ETF.

I think OP is fine....watch your losers ... the winners take care of themselves.


----------



## kyboch (Dec 23, 2011)

> It is a mix of some good dividend payers that are currently at or close to their 52 week highs.
> There are some that are perpetual dogs.
> Then there are those that have a perception of high yield because stock price has fallen a lot in recent times.


Just curious what you think are the dogs.


----------



## underemployedactor (Oct 22, 2011)

I agree with crump and scomac. If you are a buy and holder, which you seem to be, then there are plenty of ETFs that will fit the bill of your posted portfolio. If you are looking to be able to jump in and out of some of these names (which is what I like to do) then dump the less liquid ones. Also when did you buy these? If it was recently then you hit a lot of multiyear highs and seem to be riding the stocks du jour which are the high dividend payers. Chacun a son gout of course, but running with the herd doesn't always end well. I'd trim off the less liquid issues, add some growth and value plays which you seem to be lacking.
Just my 2 cents. Good luck.


----------



## blin10 (Jun 27, 2011)

underemployedactor said:


> I agree with crump and scomac. If you are a buy and holder, which you seem to be, then there are plenty of ETFs that will fit the bill of your posted portfolio. If you are looking to be able to jump in and out of some of these names (which is what I like to do) then dump the less liquid ones. Also when did you buy these? If it was recently then you hit a lot of multiyear highs and seem to be riding the stocks du jour which are the high dividend payers. Chacun a son gout of course, but running with the herd doesn't always end well. I'd trim off the less liquid issues, *add some growth and value plays which you seem to be lacking.*
> Just my 2 cents. Good luck.


like what ? give an example


----------



## underemployedactor (Oct 22, 2011)

Well everyone has their own matrix for deciding what constitutes value and growth, but off the top of my head, and bearing in mind he seeks yield and staying out of sectors he's already in, and it looks like he has an unregistered account and it seems he wants to stay Canadian, assumedly for the dividend tax credit, then I would say for value - FCR-T; TDG-T; MG-T and maybe one of the beaten down miners, K maybe. For growth; maybe Opentext (can't think of the ticker) OCX-T; STB for growth and a huge dividend, ditto AIM-T.
There. that's 8 examples.


----------



## kyboch (Dec 23, 2011)

underemployedactor said:


> Well everyone has their own matrix for deciding what constitutes value and growth, but off the top of my head, and bearing in mind he seeks yield and staying out of sectors he's already in, and it looks like he has an unregistered account and it seems he wants to stay Canadian, assumedly for the dividend tax credit, then I would say for value - FCR-T; TDG-T; MG-T and maybe one of the beaten down miners, K maybe. For growth; maybe Opentext (can't think of the ticker) OCX-T; STB for growth and a huge dividend, ditto AIM-T.
> There. that's 8 examples.


There are some good ideas there. I was considering FCR. Do you own any of these?


----------



## My Own Advisor (Sep 24, 2012)

I own about 50% of the companies the OP listed. The other companies I own are more large-cap TSX 60 stocks. Like a previous comment, I prefer to know I will get paid (via dividends) vs. speculating on capital appreciation for non-dividend payers.

Other than dividend paying stocks, owning about 30 of them, I own broad market ETFs like XIU and VTI.


----------



## blin10 (Jun 27, 2011)

other then FCR all other examples are FAR from value and growth plays... pretty bad picks actually, can't believe you put stb in here



underemployedactor said:


> Well everyone has their own matrix for deciding what constitutes value and growth, but off the top of my head, and bearing in mind he seeks yield and staying out of sectors he's already in, and it looks like he has an unregistered account and it seems he wants to stay Canadian, assumedly for the dividend tax credit, then I would say for value - FCR-T; TDG-T; MG-T and maybe one of the beaten down miners, K maybe. For growth; maybe Opentext (can't think of the ticker) OCX-T; STB for growth and a huge dividend, ditto AIM-T.
> There. that's 8 examples.


----------



## gibor365 (Apr 1, 2011)

My 2 cents:
No Foreign exposure
No Canadian REIT

Otherwise it's fine, I don't think 26 stocks it's too much, I have about the same number of individual stocks for a little bigger portfolio...if 1 company will suspend/or will stop paying dividends it won't hit you too much....


----------



## kyboch (Dec 23, 2011)

gibor said:


> My 2 cents:
> No Foreign exposure
> No Canadian REIT
> 
> Otherwise it's fine, I don't think 26 stocks it's too much, I have about the same number of individual stocks for a little bigger portfolio...if 1 company will suspend/or will stop paying dividends it won't hit you too much....


Hey Gibor:
Actually I mentioned earlier that these dividend stocks are 20% of my portfolio. The other 80% I have in index funds which I also listed earlier(XIC, VUS, VEF, CHB and XBB) but I actually forgot to mention that I have around 40K in ZRE, which as you probably know has done quite well recently.


----------



## gibor365 (Apr 1, 2011)

I didn't know that you forgot to mention ZRE  
I personally hold both ZRE and XRE in different accounts.
I read that you hold ETFs, ...still imho your exposure to US dividend aristocrat is not enough.... I hold about 40% in US stocks , mostly dividend aristocrats.... you just cannot find here stocks similar to ABT, JNJ, PM etc


----------



## kyboch (Dec 23, 2011)

gibor said:


> I didn't know that you forgot to mention ZRE
> I personally hold both ZRE and XRE in different accounts.
> I read that you hold ETFs, ...still imho your exposure to US dividend aristocrat is not enough.... I hold about 40% in US stocks , mostly dividend aristocrats.... you just cannot find here stocks similar to ABT, JNJ, PM etc


When you say 40% in US stocks, do you mean individual stocks or a US stock etf like vti or vus or a US dividend ETF? Right now I have 25% in VUS (around 100G) but maybe I should consider putting part of that into US stocks like PEP, JNJ, MCD, PG, PM etc.


----------



## underemployedactor (Oct 22, 2011)

blin10 said:


> other then FCR all other examples are FAR from value and growth plays... pretty bad picks actually, can't believe you put stb in here


Well, as I said, everyone has their own matrix for deciding on what is value and what is growth. You demanded some examples and I gave some that I thought would fit in his portfolio.
But my, you certainly are a testy little so and so. Perhaps it's you that needs the hug.
And yes, Kyboch, I do own FCR as well as TDG and oh, the horror, STB.


----------



## gibor365 (Apr 1, 2011)

kyboch said:


> When you say 40% in US stocks, do you mean individual stocks or a US stock etf like vti or vus or a US dividend ETF? Right now I have 25% in VUS (around 100G) but maybe I should consider putting part of that into US stocks like PEP, JNJ, MCD, PG, PM etc.


Both! In my ETFs portion about 40% in US equities like VTI, PRF and the same apply for individual stocks, yes, I hold all US stocks you listed and some more


----------



## BlackThursday (Apr 25, 2011)

scomac said:


> If you are intent upon stock picking with 20% of your portfolio, then I would limit the selection to your *10 best ideas*. That way, each individual position will be large enough to have a meaningful impact on the portfolio as a whole while still keeping risk in check through diversification and exposure limits. Furthermore, your workload is reduced or more to the point, likely to be kept on top of versus letting things slide when life gets in the way.


I wonder if it is necessary to track ALL of the individual stocks in your portfolio at a detailed level.

Certainly, some require focused attention, but some examples where I do NOT pay too much attention are:

1. where I am simply emulating the portfolio in XRE, I don't pay too much attention to what is going on with the individual REITs. It is the general economic environment for REITs that I focus on.

2. where I have a handful of preferred stocks, I don't really care too much about the individual insurance and bank companies behind them since the preferreds don't react to company ups and downs the way that the common does. Once again, it is the general economic environment for preferreds that I focus on.

3. where I have a handful of the top Canadian banks, I don't really care about the ups and downs of the individuals since over the long-term they appear to be correlated. I should qualify that to say that when I do want to buy more Canadian banks, I do look at who is being beaten down the most to take advantage of reversion to mean.

In these examples, it seems unnecessary, at least to me, to track the individuals. It is sufficient to look at them at the group level. 

For this reason, I do not feel constrained by arbitrary rules like "## stocks in your portfolio is too much work".

I'm curious if others take this approach to monitoring their portfolios or disagree with it and if so why.


----------



## liquidfinance (Jan 28, 2011)

BlackThursday said:


> I wonder if it is necessary to track ALL of the individual stocks in your portfolio at a detailed level.
> 
> Certainly, some require focused attention, but some examples where I do NOT pay too much attention are:
> 
> ...


I have a very similar approch. There are certain stocks I will pay more attention to and others I am happy to leave alone. If one starts to fall then I will compare the performance to others in the same sector. If they are all trending down then I see no reason to panic. It doesn't take much time to quickly compare like this.


----------



## Canuck (Mar 13, 2012)

I agree with doctrine, lots of great names there, and there is nothing wrong with holding 26 stocks, I own close to 40, and I have a lot of those names.


----------



## Young&Ambitious (Aug 11, 2010)

I am surprised with the number of people holding ~40 stock. I imagine this is not so active but more of a couch-potato style of strategy persay?


----------



## HaroldCrump (Jun 10, 2009)

kyboch said:


> Just curious what you think are the dogs.


Sorry, I didn't see your question directed to me - it got lost in many unread theads I have this week.
I didn't mean to put down your list, but some like Davis Henderson, Shaw, Chorous, Key, etc. are not the best of the breed.
They may have higher yields than their cohorts, but there are reasons for it.
Some of them are in declining industries (like DH), others are losing market share (Shaw), while others are not the best in their respective sector.

There is another issue with such a long list - how do you plan to average in your positions over time?
I assume you are not buying thousands of shares at the same time and be done with it.
You probably want to gradually ease into your positions and target allocations over a period of time i.e. buying on dips, occasionally trading to take profits, etc.

It is hard to do with 40+ stocks, unless you have a portfolio of several hundred K at least, ideally closer to a M$.
If you are buying small lots at a time, you will end up paying many sets of commissions over the course of a few months or a year until your positions are established.

The other issue is keeping track of and staying on top of so many stocks.
Other than the banks, most of the other ones are quite volatile and in the small or mid cap space.
You need to keep track of what's happening to them, or what's likely to happen.


----------



## gibor365 (Apr 1, 2011)

Young&Ambitious said:


> I am surprised with the number of people holding ~40 stock. I imagine this is not so active but more of a couch-potato style of strategy persay?


I don't think it's a problem...from my many stocks portfolio, I really track 5-6 whom I may sell, all others are for a long term...
For example you can have ZEB, but I instead have separately shares of those 6 banks that held in separate accounts (RRSP, LIRA, TFSA etc). I'm not gonna sell or trade them .... so why I need to buy 1 ETF instead where I gonna pay $165/year MER on 30K investment?!


----------



## kyboch (Dec 23, 2011)

Haroldcrump, thankyou for a great answer and taking the time to spell it out for me. You are obviously a more "in depth" trader than I am. I bought most of these stocks over the last couple of months. On some the timing was great (KEY, RCI.B, ALA, SJR.B, CUS and NPI) and on others not so much (BTE, CVE, CPG especially).

What got me going was that I held ZDV and thought that instead of paying the MER I could just build my own dividend etf but exclude the stocks that I didn't like. As this is a long term hold I don't anticipate much trading.

I feel like you that the banks won't need that much attention, but I feel that way about the telecoms, pipelines and utilities as well. That is about half of the 26, the others I will watch more closely, but even the oil stocks I intend to just hold onto because eventually I believe they will rise in value.

I have to disagree with you on DH though, although known mostly as a cheque provider that now is only a small portion of their business as they have branched into many other areas including many services to the banks.

CJR.B has a strong history of raising dividends as does SJR.B(up 2.14% today) and KEY(up 1.8% today)

In general I really believe that the 26 stocks I have bought are quality companies and will do well over time and in the meantime I will get paid to wait. My plan is to reinvest dividends into whatever stock is in a dip..
Anyways I really do appreciate your input. I am learning more all the time and as new information enters my brain I'm sure I will adjust my investing strategies.
Have a great day


----------

