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    It was a great week for me on the market as oil price went up and so did Black Diamond Group (BDI.TO +17%)) and Helmerich & Payne (HP +10%). Over the past 5 days, it was a great week for many other stocks I hold:

    DIS +13.89%

    BNS.TO +8.94%

    AAPL +7.90%

    NA.TO +7.78%

    GS.TO +6.68%

    LMT +4.84%

    I’m now +9.61% since January 1st. This is probably my best start in investing since I started! Unfortunately, this is only the beginning of the year and many things could happen until December 31st!

     

    This week, I’ve explained how I picked 30 stocks to beat the market in 2015 (and how I usually make it since 2012!) and I made a list of 10 high dividend yield energy stock to buy right now.

     

    Here’s what’s interesting to read this weekend:

     

    Dividend Growth Investing & Retirement made a list of 14 Canadian dividend stocks with high earnings growth. There were several stocks that have never been on my radar (Home Capital Group for example). This is an interesting list, I hope he goes beyond the numbers in another post!

    Sure Dividend Covers Wal-Mart. I like this stock and I think I will hold it forever.

    Conservative Income Investor tells you how it is important to look further ahead to avoid stupid move. In other words; you are better off buying sound companies paying a low dividend yield (between 1 and 4%) that will increase their dividend each year than trying to high dividend yield right away. If you are not convinced, I think you should read my case against high dividend yield stocks.

    Dividend Ladder reviews Aflac. Once the yield passes 3%, it will become very interesting. With a low PE ratio, Aflac could be a good addition to a long term investor portfolio.

    DivGro bought one of my favorite stock: DISNEY! I know, you will tell me the yield is ridiculously low for a dividend investor (usually paying only 1%). BUT the growth potential is impressive. Now that the US economy is bouncing back for good, results will only go higher.

    DivHut takes a good look at the gambling industry. Some companies pay very nice yield and looks good. Casinos are not my cup of tea… maybe this has to do with the fact that they refused me when I was 17… go figure! Hahaha!

    Dividend Growth Investor asks a fundamental question: Will the dividend grow? If there is one question you much ask yourself before buying any company it is that one. Find ways for the company you look at to increase their earnings and this is how the dividend will grow.

    Boomer & Echo makes a review of new tax credits for Canadians. This is election year in Canada, always a great moment for Canadian to make a few buck on “gifts” from the current Government. I can’t complain; they aim to give more money to family… I have 3 kids!

    A special mention to….

     

    If you have one article to read this weekend, read Freedom exists on a Spectrum by Dividend Mantra. He took the time to write a great piece relating to the different stage of freedom reached during his journey to 100% financial freedom. This is a great inspiration for anyone who’s not too sure where they should go with their personal finance.

    I’m off tonight with my wife for our St-Valentine’s Day supper and I’ll spend my Sunday on the indoor soccer field coach my son. This will be a great weekend!

     

    Enjoy yours,

     

    Mike

     

     

     

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  • Since June 2014, the price of a barrel of oil has taken a bit hit. When such things happen, the stock market reacts quickly and penalizes companies in this industry. We saw what happened back in 2008 with banks, this time, the oil industry is hit. But there is a very good news coming with any stock drop; the dividend yield soars higher. This might be the opportunity you are looking for to buy cheap shares of high yielding dividend stocks. I’ve pulled out 11 oil industry companies paying over 4% in dividend yield.

     

    Canadian Market

     

    ARC Resources (ARX.TO) 5.11%

    ARC chart

    ARC explores and produces oil & gas in Western Canada. Recently, there have been 5 insiders’ purchases since the stock price dropped. This could be an indication that insiders believe that oil will bounce back and this could be the perfect time to fill their portfolios with cheap shares. However, ARC recently cut their exploration budget by almost 15% (from $875M to $750M).

     

    Bonterra Energy (BNE.TO) 4.17%

    bonterra chart

    Bonterra was among the first Canadian energy companies to cut their dividend (from $0.30/share to $0.15/share). Following my 7 investing rules, this stock was automatically taken off our DividendStocksRock Portfolios. Ironically, the stock was added a few days after to the S&P Canadian dividend aristocrats list. I guess they will take if off promptly. Keep in mind that Bonterra pays a monthly dividend that could vary depending on the price of oil. Therefore, the dividend could bounce back in a few months. Still, this is not my favorite pick from this list.

     

    Baytex (BTE.TO) 5.16%

    BTE.TO

    Baytex experienced a similar situation to Bonterra and cut their dividend by 60% back in December. They also cut their exploration budget by 30% for 2015. Baytex ran out of luck with the Eagle Ford transaction as they tried to make a strategic move and acquire a US shale company. A few month after, oil prices dipped and Baytex is left with a sour taste it its mouth. Funds from operations (FFO) could drop by as much as 50% in the upcoming year. This is why the company protected its cash flow by cutting their budgets and dividend payouts. This is a sign of good management, now we have to wait and see if the company can continue through the storm without further damage.

     

    Bonavista (BNP.TO) 5.84%

    bonterra chart

    Bonavista holds working interests and operator status on its acreage holdings. This allows the company to control its growth and exploration. The latest quarter shows impressive production and productivity levels. BNP may benefit from this productivity gained as oil prices remain low.

     

    Calfrac Well Services (CFW.TO) 5.69%

    calfrac chart

    Calfrac is a relatively small company specialized in oilfield services such as hydraulic fracturing, coiled tubing and other well completion services. Its business model is linked directly to the price of oil. Technically, as long as the barrel is below $55-60, CFW will have trouble finding growth as most exploration budgets will remain minimal. The company has a great client base, well diversified and operates world class equipment in a very specialized market. However, as long as oil prices remain low, its revenues and earnings will be greatly affected (looking for a good drop in 2016 as part of 2015 is already secured with existing contracts).

     

    US Market

     

    BP (BP) 5.80%

    BP chart

    BP has underperformed other oil integrated companies such as Chevron (CVX), Exxon Mobil (XOM) and Royal Dutch Shell (RDS.B) over the past 12 months. This might make it a better play. However, there is a reason why the stock has dropped more than others; BP includes some additional risk such as their participation in Russian oil production and the uncertainty of the ongoing 2010 Gulf of Mexico spill trial. Investors will have to be patient and wait until the trial is settled before they can see the stock gaining some appreciation.

     

    Helmerich & Payne (HP) 4.31%

    HP chart

    You have read much ink regarding HP on this blog so I won’t ramble too long this time. HP is a leader and world class drilling company. The only problem right now is the price of oil. If I could, I would have probably added more shares at the moment.

     

    Royal Dutch Shell (RDS.B) 5.38%

    royal dutch chart

    Back in the 90’s, Shell under invested compared to its peers and it suffered from this decision until recently. In 2004 they started an aggressive investment program and finally show strong cash flow in the past few years. This is why the company is not going to stop spending even in a tougher market. It will continue their long term vision. This could be the best strategy for now.

     

    Sunoco (SUN) 4.23%

    sunoco chart

    How about finishing with an MLP? Sunoco distributes fuel across America and shows interesting fundamentals. Since it makes their money distributing the fuel, its stock hasn’t been affected by the current situation. Sunoco announced a 10% increase of their distribution on February 2nd.

     

    Which one is your favorite?

    My favorite is definitely HP (but I own shares of it already). Then, I must think of Calfrac Wells Services. It shows greater risk due to its business model and market cap but it could boost your portfolio in a serious manner if oil prices shoot back up.

     

    Disclaimer: I hold shares of HP & BDI.

    BNE.TO was sold in our DividendStocksRock portfolios.

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  • At the beginning of each year, I build two virtual portfolios. One includes twenty strong US dividend stocks and the other one ten Canadian dividend payers. They are built using my 7 investing principles and they show a strong appetite for growth. I started this tradition in 2012 and here are my results so far:

    2012

    US portfolio total return: +12.37%

    CDN portfolio total return: +14.69%

     

    2013

    US portfolio total return: +35.27%

    CDN portfolio total return: +19.80%

     

    2014

    US portfolios total return: +8.24%

    CDN portfolio total return: -1.93%

     

    How do I pick my stocks?

    As you can see, creating a great amount of wealth year after year doesn’t come by luck. Some may say it was a great bullish market; however, my portfolios often beat the market (the Canadian market was only up 3.02% in 2012 while my portfolio generated 14.69% return). I don’t pretend to be a guru and do make mistakes. In 2012, I picked RadioShack (RSH) and in 2014, I picked Black Diamond Group (BDI.TO). Both stocks performed horribly in my portfolio. But the overall selection did well and better than most portfolios and indexes.

    I usually start my research in December, one month before publishing the book. The first step is to pull out a list of stocks following a strict set of rules. They include earnings, revenues and dividend growth over three and five year periods. The point is to pick companies showing a similar trend for the three data streams (earnings, revenues and dividend growth). This is a good indicator that the company hasn’t played around with accounting principles and generated a big year to fool investors. Then, I look at the dividend yield and dividend payout. Here again, I’m looking for a reasonable yield but my main point of focus is a low payout ratio. My goal is to make sure no company in these portfolios would cut their dividend during the year I select them.

    This first filter usually gives me about 50 to 150 stocks per market. Companies with stellar fundamentals will be picked first. It is pretty rare to find a company that is strong everywhere. These are picked automatically. Then, I look at sectors and trends for each fundamental studied. The stronger the trend, the better the chances I will pick the stock. Considering the sector also avoid taking too many companies in the same basket and this forces me to make choices. A classic example is when I search through Canadian stocks. Usually 4 to 6 banks appear and there is always one or two other financials like insurance companies or conglomerates that are added to the list. It doesn’t really make sense to pick 6-8 financials in a 10 holdings portfolio. This is why I try to take 2 or 3 maximum (usually two banks and another financial). I have to leave the others and make a choice for that year.

    Once I’ve pulled portfolios together, I look at each stock’s latest quarterly report. I want to make sure the data I’ve pulled out from the past 3 and 5 years are a good mirror of what will happen in the following 12 months. Sometime, you pick a company right before it fails. This usually happens when you only base your investing process on past data. It’s important to look at what has been published recently and how recent events will influence the company in the near future. There will always be uncontrollable news such as the drop in oil prices endured since late in 2014. Nobody saw this coming and that’s part of the game. Then again, this is the idea of not having all companies coming from the same industry.

     

    What’s the purpose of selecting 30 stocks for each year?

    The goal behind the Best 2015 Dividend Stocks eBook is to give investors a starting point for their research. We always look for new stock ideas and most investors don’t really have the time to do proper due diligence. While these stocks are not to be taken as recommendations, much of the research has been done for you and the book provides fundamentals data along with my investing theory. I even provide potential risks for each of them. I could have written 5 pages worth of analysis per company and bored you to death. Instead, I’ve condensed all my research into a single page per stock. This is how you get the best of both worlds with the Best 2015 Dividend Stocks eBook.

     

    What are Your 2015 Best Dividend Stocks Results so far?

    Stock ideas are only fun when they generate returns, right? Hahaha! As at January 30th 2015, my US portfolio is in line with my benchmark showing only -0.22% behind the Vanguard Dividend Appreciation ETF (VIG) and my Canadian portfolio beats the benchmark by 4.48% (I use iShares Dow Jones Canadian Select Index Fund ETF (XDV)). While true it’s only a month and stocks are showing great fluctuations as new quarterly results are being published every day. However, this seems to be another great start for 2015.

     

     

    Are you ready to start your portfolio?

    If you are looking to start your dividend growth portfolio or simply improve your existing one with fresh ideas, this book is definitely for you. Thats 40 pages worth of solid information for only $4.99.

    2015 best dividend book

    This year, I offer both versions: PDF or Kindle.

     

     Click on the button below for the PDF file:

    pdf

     

     

    Click here to buy the Kindle version (Amazon link) 

     

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