• I started this “tradition” on my blog in 2012. The goal is to pick 20 US and 10 CDN dividend stocks that I think will outperform their peers. This is the reason why I use VIG and XDV as my benchmarks and then keep track of my results for accountability purposes. I find that too many analysts and blogs just drop the ball on their picks when they are not that great. By posting monthly results, I have no other choice but to face my performance and explain it. You can look at my previous picks and returns:

     

    Best Dividend Stock Picks 2012 (-1.47% vs VIG (US dividend ETF), + 8.32% vs XDV (CDN dividend ETF)

    Best Dividend Stock Picks 2013 (+11.07% vs VIG, + 0.77% vs XDV)

    My 2014 Best Dividend Stock Picks Book is for sale on Amazon.

     

    Top US Dividend Picks 6.54% (vs VIG at 4.15%)

    I’m still beating my benchmark by more than 2% and my portfolio pays 1% more in dividend yield. Therefore, I should finish the year with a total return around +3 to 4% compared to my benchmark which is still very good. 60% of my picks currently beat the ETF and only two are seriously lagging in this bullish market: Aflac (AFL) and Mattel (MAT).

     

    Aflac’s results were greatly affected by the Yen in 2014. This is why it is currently lagging behind. As a long term pick, you can consider that AFL has never missed a dividend increase over the past 31 years.  On top of that, with a yield over 2.30%, it’s definitely a good asset for a dividend portfolio. I still like the stock as it is currently reasonably priced with a P/E less than 10. This is quite interesting, especially in today’s market!

     

    As for Mattel, the price has been stabilized after its 20% drop back in January due to the Holiday sales slump. Investors are currently looking forward to their next quarterly report which will be posted on July 17th. This is when we will know if keeping MAT in my portfolio was a good choice or if the toy company is heading towards the dump.

     

    Top Canadian Dividend Stocks + 3.85% (vs XDV at 5.16%)

     

    For the first time this year, I’m lagging behind the index with my Canadian picks. I have mixed feelings about this portfolio as I was able to select a few good picks but the overall portfolio not only lags my benchmark but it is far away from the TSX 60.

    The positive news comes from Lassonde Industries (LAS.A) which recently exploded upon news of the acquisition of US Branded Juice Company. The Canadian juice giant continues its expansion into the United States will continue to bring in good growth in the upcoming years.

    On the other hand, news wasn’t too good for the telecom industry with the Canadian Govt coming back with more rules to enable other players to enter Telus, Rogers and Bell mobile’s playground. Telus (T) lost 3.66% from opening the on July 7th to closing on July 8th. Rogers (RCI.B) followed behind with a loss of 1.90% for the same period. I’m not too worried with Telus while Rogers seems to be hit from the right, left and center these days.

    Things are not going so good with North West Company. Their latest quarterly report (June) missed analysts estimates by $0.08/share. There is nothing to help them recover and the stock dipped another 3% in the past 30 days.

    I’m currently stuck with two big losers (NWC and RCI.B)… this is time for me to rethink my approach for these two investments.

    At least, I’m simply lagging by 1.31%, it can easily be recovered!

     

    S&P TSX 60 DIVIDEND YIELD AND EX DIVIDEND DATE

    Ticker
    Name
    Price
    Dividend Yield
    Payout Ratio
    Ex-Dvd
    CPGCrescent Point Energy Corp47.295.84746.547/29/2014
    COSCanadian Oil Sands Ltd24.185.7981.298/22/2014
    TATransAlta Corp13.085.5N/A8/29/2014
    PWTPenn West Petroleum Ltd10.425.37N/A9/24/2014
    BCEBCE Inc48.45.191.529/12/2014
    RCI/BRogers Communications Inc42.944.2653.699/10/2014
    NANational Bank of Canada45.264.2438.369/23/2014
    CMCanadian Imperial Bank of Commerce/Canada97.14.1244.499/24/2014
    SJR/BShaw Communications Inc27.364.0261.587/11/2014
    ERFEnerplus Corp26.894.02452.037/7/2014
    BMOBank of Montreal78.583.9746.867/30/2014
    FTSFortis Inc/Canada32.473.9478.388/13/2014
    POWPower Corp of Canada29.653.9154.639/5/2014
    TTELUS Corp39.773.8267.269/10/2014
    PPLPembina Pipeline Corp45.913.79149.147/23/2014
    TRPTransCanada Corp50.933.7775.999/26/2014
    RYRoyal Bank of Canada76.283.7245.27/22/2014
    TRIThomson Reuters Corp38.853.7848.038/22/2014
    TCK/BTeck Resources Ltd24.363.6953.912/10/2014
    ARXARC Resources Ltd32.493.69155.387/29/2014
    POTPotash Corp of Saskatchewan Inc40.583.6964.427/9/2014
    SLFSun Life Financial Inc39.223.6750.868/25/2014
    BNSBank of Nova Scotia71.143.646.0610/3/2014
    HSEHusky Energy Inc34.463.4864.968/19/2014
    TDToronto-Dominion Bank/The54.933.4246.727/7/2014
    AGUAgrium Inc97.753.2834.019/26/2014
    CVECenovus Energy Inc34.593.08110.579/12/2014
    ENBEnbridge Inc50.632.77234.168/13/2014
    BBD/BBombardier Inc3.772.6932.529/10/2014
    TLMTalisman Energy Inc11.282.6N/A9/11/2014
    MFCManulife Financial Corp21.212.4531.968/15/2014
    THITim Hortons Inc58.372.1936.88/21/2014
    GGoldcorp Inc29.782.19N/A7/15/2014
    WNGeorge Weston Ltd78.712.1336.259/12/2014
    LLoblaw Cos Ltd47.622.0641.949/10/2014
    SUSuncor Energy Inc45.52.0228.029/4/2014
    CTC/ACanadian Tire Corp Ltd102.371.9521.387/29/2014
    CCOCameco Corp20.931.9149.669/24/2014
    CNQCanadian Natural Resources Ltd49.031.8427.589/10/2014
    YRIYamana Gold Inc8.781.83N/A9/24/2014
    MRUMetro Inc65.971.8212.948/25/2014
    SNCSNC-Lavalin Group Inc56.121.71389.788/15/2014
    BAM/ABrookfield Asset Management Inc47.011.4818.418/27/2014
    MGMagna International Inc114.861.4418.198/27/2014
    CNRCanadian National Railway Co69.41.4427.729/3/2014
    SAPSaputo Inc63.931.4432.897/3/2014
    ECAEncana Corp25.281.2209.329/12/2014
    ABXBarrick Gold Corp19.541.11N/A8/27/2014
    SLWSilver Wheaton Corp28.081.0942.619/17/2014
    IMOImperial Oil Ltd56.230.9214.678/27/2014
    AEMAgnico Eagle Mines Ltd40.860.85N/A8/29/2014
    FMFirst Quantum Minerals Ltd22.820.8221.138/27/2014
    GILGildan Activewear Inc62.870.7513.668/12/2014
    CPCanadian Pacific Railway Ltd193.310.7228.119/24/2014
    ELDEldorado Gold Corp8.160.25N/A8/12/2014
    BBBlackBerry Ltd10.94N/AN/A#N/A N/A
    CCTCatamaran Corp47.12N/A0#N/A N/A
    GIB/ACGI Group Inc37.82N/A0#N/A N/A
    VRXValeant Pharmaceuticals International Inc134.94N/AN/A#N/A N/A
    KKinross Gold Corp4.42N/AN/A9/17/2014

     

     

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  • This guest post was written by Ben Reynolds, of Sure Dividend

    The Dividend Aristocrat Index has outperformed the overall stock market by 2.88 percentage points per year over the last decade.  A Dividend Aristocrat stock has paid increasing dividends for 25 or more consecutive years.  To accomplish this feat, a business must have stable, growing cash flows.  Dividend Aristocrats as a whole have made excellent buy and hold investments over the last several years.  Not all Dividend Aristocrats are created equally, however.

    Enter the PEG Ratio

    The PEG ratio was popularized by Peter Lynch, who averaged 29% returns over 13 years in his time with the Magellan Fund.  The PEG ratio compares how cheap or expensive a business is to its growth rate.  It is simply the P/E ratio divided by growth rate.  The lower the PEG ratio, the cheaper a business is taking into account its growth.

    Using last year’s earnings per share growth rate can be a bit misleading.  One-year growth rates can have wild swings that are not indicative of long-term growth.  Using the lesser of the 10 year revenue per share growth rate or 10 year dividend per share growth rate for each business produces results that are closely aligned with real business growth.

    Dividend Aristocrats & the PEG Ratio

    What happens when you combine the PEG ratio with Dividend Aristocrat stocks?  You find businesses with a long history of rewarding shareholders through increasing dividends trading at low prices compared to growth-adjusted value.  The top 5 Dividend Aristocrats with the lowest PEG ratios are:

    • Aflac (AFL):  1.14 PEG
    • Chubb (CB):  1.66 PEG
    • Family Dollar (FDO):  1.69
    • Wal-Mart (WMT):   1.90
    • T Rowe Price Group (TROW):  1.99

    Want the complete list?  This Spreadsheet sorts all Dividend Aristocrats by PEG ratio, with the cheapest businesses first.  The PEG ratio is an excellent way to generate long-term investment ideas, but there are other metrics to consider besides growth and value.  Sure Dividend uses the 5 Buy Rules from the 8 Rules of Dividend Investing to find high quality businesses with a long history of rewarding shareholders that are suitable for long-term holdings.

    Aflac Overview

    Aflac is the world’s leading cancer insurer.  The company sells cancer, health, and life insurance policies in Japan and the US.  About 75% of the company’s revenue comes from Japan.  Aflac has managed to write highly profitable health insurance policies over the last 5 years, maintain a pretax profit margin of around 20%.  The company has increased its dividends for 31 consecutive years, and is likely to continue to do so in the future.

    Chubb Overview

    Chubb Group sells home, car, business and supplemental health insurance through its network of independent brokers and agents. The company operates in North and South America, Australia, Europe and Asia. About 75% of the company’s revenue comes from the US, versus just 25% internationally.  The company has increased its dividends for 32 consecutive years.  Chubb has had a combined ratio (expenses & losses dividend by premiums) under 100% since 2003; the company has a long history of prudent, profitable underwriting.  Chubb is a Top 10 stock based on the 8 Rules of Dividend Investing.

    Family Dollar Overview

    Family Dollar is one of the US’ leading discount retailers.  The company has 8,100 locations in 46 states with over $10 billion in annual revenues.  Family Dollar is one of only four Dividend Aristocrats to have grown revenue per share at over 10% for the last decade.

    Walmart Overview

    Wal-Mart (WMT) is the world’s largest retailer. The company is focused on low prices resulting from operating efficiencies driven by economies of scale. Wal-Mart serves 245 million customers each week from over 11,000 locations in 27 countries.  The company has paid increasing dividends for over 4 decades.  Walmart is a Top 10 stock based on the 8 Rules of Dividend Investing.

    T Rowe Price Group Overview

    T Rowe Price is a global investment management business with over $700 billion in assets under management.  The company provides mutual funds and investment management, among other services, for individuals, institutions, and retirement plans.  The company has increased its dividends for 27 consecutive years.

    Summary

    Investing in high quality businesses at fair or better prices is an excellent way to compound your investments over time.  The PEG ratio combined with stocks with a long history of rewarding shareholders through dividends is a quick way to generate ideas for high quality dividend stock investing.

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  •  

     

    Each month on this blog, I publish my Best 2014 stock picks for both the US and Canadian markets. I always compare my picks to a dividend ETF. When I look at my own portfolio, I do the same thing. Finally, each month I publish my Dividend Stocks Portfolios at Dividend Stocks Rock and compare them to dividend ETFs as well. Some investors don’t do this because they feel good as long as they receive their dividends on a monthly basis and that their portfolio value doesn’t show a negative return. I use a comparison system because it enables me to see how good (or bad) I am.

     

    What is the point of comparing your returns?

     

    The point is quite simple: there are thousands of ways to invest your money and dozens of investment vehicles to package your portfolio. Let’s take my $50,000 invested in my RRSP for example. With this amount, I could invest in many ways:

    #1 I could go and see a broker that will manage the money for me

    #2 I could buy a good growth mutual fund and never look back

    #3 I could build an index portfolio with ETFs and rebalance it once a year

    #4 I could invest in a super safe GIC at 2.50% for 5 years

    #5 I could buy bonds with pretty much the same result

    #6 I could spend enough time on my investments to manage the portfolio myself

     

    The first 5 options won’t take much of my time. In fact, besides the ETF portfolio, chances are that you can spend less than 5 hours per year and have your money managed by someone else… and maybe you can spend about the same time if you build a coach potato ETF portfolio!

     

    Therefore, why in the hell would I want to spend hours managing my own stuff? There are two major reasons for this:

    #1 I love investing

    #2 I think I can do better than the market

     

    And this is the whole point of comparing: if I can’t beat the market, what’s the point of wasting time on my portfolio? I should just buy ETFs or simply buy a mutual fund and use my free time on something else!

     

    What do you use as comparison?

     

    I also take great pride to see that my portfolio did better than the market but I usually compare my return against a dividend ETF. The point is simple: I like dividend investing as it generates a better stability in my portfolio than other aggressive ways of investing. Comparing a 100% dividend stock portfolio to the market is a bit unfair as it will be killed during a bull market and usually perform better in a bear market.

     

    This is why I use a dividend ETF; because I could use the dividend ETF instead of spending time managing my portfolio. If I can beat the ETF, this means I’m better off spending time on for my stocks. I’m really passionate about investing but if I didn’t have the ability to make good decisions, I really wonder what would be the point of spending time analyzing stocks while I could simply buy a ETF and never look back, right?

     

    Do you compare your returns to an ETF or an Index?

     

    What about you? Do you use any kind of metrics to compare yourself? How do you know if you are doing well or not?

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