Buy the Dip on Canadian National Railway

Canadian National Railway (CNI) has been on a great stock ride over the past 12 months. As the TSX decreased by 2%, CNI stock is up 10.67% as at August 19^th. This creates another interesting entry point for this strong dividend grower.

Revenue

Revenue Graph from Ycharts

As you can see, the railroad industry cycles up and down. The latest down cycle happened during the oil bust, but CNI’s great diversification helped it weather the storm

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3 Recent Buys

After having a quiet Q2, the number of purchases just in July are adding up. This post will document 3 recent purchases in my portfolio, couple of which borderline on speculation.

The first purchase is a microcap gold exploration company and the other two are focused on copper.

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6 Dividend Stocks That Gave Me A 20%+ Annualized Return

Andy Warhol in 1968 said that "In the future, everyone will be world-famous for 15 minutes." In our society, many things follow the 15 minutes of fame paradigm, though duration of time is sometimes more or less. For example, at a fireworks display each rocket is viewed by the audience, albeit just for a few seconds. Olympic athletes will train in obscurity for years for a chance to have a gold medal hung around their neck as the world watches. When it comes to selecting dividend growth stocks, the ones you want are those that will perform well over the long haul.

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Weekend Reading Links - August 27, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Apple: A Growth or Dividend Growth Stock?

When I first purchased shares of Apple (AAPL), it was way after their original stock surge. I added AAPL to my portfolio once they raised their dividend for the first time, right before the stock split. At that time, there were lots of concerns around the company’s ability to “survive” in the smartphone industry and continue to generate growth. After a thorough analysis, I made the bet that AAPL would become another Microsoft (MSFT); a company generating strong cash flow and increasing its dividend generously. Almost 5 years after my first trade, let’s look at Apple and its dividend growth potential.

What Makes Apple a Good Business?

Apple is an icon of the techno which survived the techno bust in 1999. Their products are made with great attention and aim at perfection. While its products are not perfect (yet), it has built a perfect product ecosystem. Your MacBook, iPad, iPhone, and your Apple Watch all blend together. You can share your pictures, favorite songs, and applications with any device. Apple has succeeded to have fans instead of customers.

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Is Ebay Fairly Priced?

Ebay (NASDAQ:EBAY) is a large cap stock with a market capitalization of $40.55 billion. The company is a commerce company, which operates through its Marketplace, StubHub and Classifieds platforms.

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6 Rainy Day Dividend Stocks

A pessimist might say life is a series of bad things happening, then we die. I certainty wouldn't go that far, but life often deals us unfortunate circumstances to work through at what seems to be the most inopportune time. During the 2007-2008 economic downturn, many people lost their jobs at a time when companies weren't hiring. When things like this happen, those with an alternative income, including dividend growth stocks, are in a better position to deal with the circumstances thrust on them.

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Weekend Reading Links - August 20, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Dividend Discount Model Limitations – And How to Manage Them

For each stock analysis I perform on my blog or for my portfolios, I always include a section about valuation. To be honest, the valuation part of my analysis is not my favorite… and not the most important either in my opinion. I prefer working on my investment thesis and assessing potential risks than shaking my crystal ball and give a dollar value on the shares. Is it because I’m bad at giving valuation? Not really. The problem is that I’m well aware that regardless the method I use, there are severe limitations that could make two investors using the same model, but getting completely different results. Today I will take a look at the dividend discount model (DDM) limitations and how I deal with them.

How the Dividend Discount Model Works

The reason I like using the DDM for my work is because the formula is simple and effective. The purpose of this model is giving a value for future dividend payments. It’s basically giving you the value of your “money making machine” based on how much it should pay you back in the future. The model has been built around the following formula:

P is the price of the stock, D1 is next year expected dividend, R is the rate of return (discount rate) and G is the dividend growth rate. Therefore, in order to complete the formula, you “simply” have to determine the discount rate and future dividend growth rate as the payable dividend is already known.

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The Blueprint for Successful Dividend Investing

This is a guest post by Nick McCullum from Sure Dividend. Sure Dividend uses The 8 Rules of Dividend Investing to systematically identify and rank high-quality dividend growth stocks suitable for long-term investment.

Dividend growth investing is one of the most straightforward and powerful ways to build long-

term wealth. It can also seem highly complicated to those without experience in this investment strategy.

Fortunately, one of the best things about dividend growth investing is its ease of implementation. This makes it well-suited for a wide variety of investors.

Additionally, dividend growth investing stands the test of time. This investment strategy has been studied/written about since at least 1934, when Security Analysis (arguably the most famous book on investing) was published:

“The prime purpose of a business corporation is to pay dividends regularly and, presumably, to increase the rate as time goes on.”
– Benjamin Graham in Security Analysis

Clearly, something is special about dividend growth investing.

With that in mind, this article will describe four easy-to-understand principles that form the blueprint for successful dividend growth investing.

Read more »

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2 Recent Buys

A quick update on a couple of purchases in my portfolio adding to my existing positions.

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When A Stock Fails To Raise Its Dividend: Is It Time To Sell?

I hate to sell a dividend growth stock. When I buy a stock, my intention is to hold it forever and enjoy its ever-growing dividend income. Unfortunately, it doesn't always work that way. Sometimes things change and the stock no longer fits my criteria for inclusion in my income portfolio.

It could be a company that cuts its dividend or in some cases freezes its dividend (fails to raise its dividend at the appointed time).  Let's take a look at a two-step process designed to help us determine if we should sell a stock after a dividend freeze.

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Weekend Reading Links - August 13, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Packaging Corp of America rising ever higher, is it still the time to buy some?

Summary:

#1 PKG stock price has surged in 2017 compared to its competitors

#2 After 6 consecutive years with a dividend increase, PKG can be considered a dividend growth holding

#3 As the corrugated product industry is declining, we can wonder how PKG will find growth in the future

What Makes Packaging Corp of America (PKG) a Good Business?

Packaging Corp of America is a producer of container board and corrugated products in the US. Further, it also produces multi-color boxes and displays, as well as meat boxes and wax-coated boxes for the agricultural industry. The company is present across the U.S., thanks to the acquisition of Boise Inc in 2013:

Source: PKG investors presentation

PKG shows 85% of business in corrugated containers and 15% in white paper. Its main competitors are International Paper (IP) and Westrock (WRK). Both competitors show larger market cap (22.82B and 14.46B respectively).

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4 Best Consumer Dividend Growth Stocks

Dividend growth investors have different approaches to stock picking, but I think there are some important factors that every investor looks at. As far as I am concerned, I think a good dividend growth pick has to show some simple characteristics.

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5 Big-Name Dividend Stocks Crushing The S&P 500

Most every investor has a benchmark they are trying to beat. For many investors, that benchmark is the S&P 500. It is easily followed and can be directly invested in via many different index funds such as SPDR S&P 500 (SPY) and Vanguard 500 Index Inv (VFINX).

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Weekend Reading Links - August 6, 2017

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

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Dividend Discount Model Calculation Explained

Boosted by a new confidence, the market has hit new record highs lately. Value investors must be grinning at the moment as it was already difficult to find undervalued companies at the moment, a new boost in the stock market is nothing to help. Assessing the right value of a company is quite a challenge by itself, it’s even harder when you have several years of bullish markets to improve any metrics you look at. This is why I decided to revisit the methodology used in my dividend discount model calculations.

The basics of the dividend discount model

The idea behind the dividend discount model (DDM) is fairly simple; this model considers any company as a money making machine (e.g. dividend paying). The purpose of the calculations is to give a value of all future dividend payments that will be made by this company in the future.

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2017 Top Investment Picks – Q2 Update

At the beginning of the year, I put together a list of top picks from the investment community and track them on this website. This is just meant to be a fun exercise to see how the picks do. As part of the process, I intend do provide quarterly updates on the picks to see how they are doing. This is the update after Q2.

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