The Weekly Lineup: Kick-Ass Bank Dividends Edition

Stocks and Golf Podcast

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David WInchell, Stocks and Golf Podcast

David Winchell at Stocks and Golf, asked me back for another radio show chat! Be sure to check out Stocks and Golf Podcast No. 047, with my interview at seven minutes into the segment. David is an easy going guy who makes anyone feel comfortable. I always enjoy having the chance to talk with him.

David asked me of course if I had any stocks on my watch list. So I was happy to share a sector I have been currently watching – the Canadian mining sector. I also discussed why I prefer a dividend investing strategy, and why investors need to be cautious in a rising market.

Rogers Sugar Special Dividend

Rogers Sugar (RSI) paid a special dividend of 0.36 cents per share, to shareholders on Feb. 28th. They had 64.7 million dollars of free cash flow, accumulated since 2007, and decided to distribute this as a special dividend. This was a nice dividend treat that added another $79.20 into my portfolio. I was able to add another 12 shares to Rogers through my DRIP. Rogers Sugar is a very small position in my portfolio, in part because of its small capitalization at 604 million, and higher yield at 5.6% (which used to be much higher). However it does have a small economic moat, since it’s the predominant sugar refiner and supplier here in Western Canada. It’s literally on all the store shelves!

Canadian Banks Raise Dividends (Again)

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image courtesy of www.cbc.ca

Canada’s banks have again reported stellar profits and earnings, even amidst fears of sluggish growth, an apparent housing bubble, and high debt load among Canadians.  A recent Globe and Mail article, Canada’s banks awash in profits, cites the Royal Bank with a $2.07 billion dollar profit and TD with a $1.79 billion dollar profit. But the Canadian banks are also solid dividend growth companies.

The Royal bank increased its dividend 5% from .60 to 0.63 cents per share. TD followed suite, also raising its dividend by 5% from 0.81 to 0.84 cents per share. The Bank of Montreal also boosted its dividend by 2.7% from 0.72 to 0.74 cents per share. My other bank holding, BNS, reports next week and will likely raise its dividend as well. Of the banks that have reported, only CIBC and National did not boost their dividends. As a long-term owner in three of the Canadian banks, BMO, BNS, and RY, the profitable earnings and dividend increases is good news!

The Weekly Lineup

There were some other great posts around the web this week. Be sure to check them out!

On The Dividend Pig, I wrote a detailed post about Opportunity in the Canadian Mining Sector. I looked at three companies on my watch list, which I may pull the trigger on over the next few months. Many dividend investors have largely ignored this sector because of the lower yields, yet these are actually dividend growth companies, with potential for more capital growth.

Dividend Growth Investor wrote an interesting post this week, where he looks at the S&P Dividend Aristocrats Index, and explains why it’s an incomplete list.

Since I was looking at the Canadian mining stocks, here was an interesting article in the Globe and Mail on Barrick Gold. It’s the classic value play or value trap dilemma. Although Barrick has a higher yield than Goldcorp, the higher yield comes with a few problems. These are higher debt, negative earnings, and a $7.3 billion dollar write-off for Equinox Minerals in Zambia. However like most large companies, Barrick will likely be able to turn things around.

The Passive Income Earner provided a detailed and thorough analysis of Davis + Henderson Corp. Davis Henderson is another one of those high yield Canadian stocks that used to be an income trust. It’s also the company that causes many Canadians grief, with high cheque printing fees. They have a monopoly on the cheque printing business here in Canada.

The Dividend Mantra created a buzz last week when he hit the buy button on the Canadian Banks! His initial post was very interesting, and he did some thorough research. Be sure to read his two recent posts, Three Canadian Stocks On My Watchlist and Recent Buy. These posts are a must read! And special mention to Dividend Mantra who is now a blink away from 100K!

Have a nice weekend everyone! :)

7 Responses to “The Weekly Lineup: Kick-Ass Bank Dividends Edition”

  1. BNS will certainly raise it’s dividend on Tuesday. CIBC is still just raising it’s dividend annually, but they also have a stock buy-back program in effect. NA is raising its dividend twice annually, but on opposite quarters from RY, BNS, TD and now BMO who are all twice-annual dividend raisers. Great news for all of us! $2.1B from Royal is just an incredible volume of earnings.

    Reply to this comment
    • The Dividend Ninja

      Mar 03. 2013

      CDB, yes I think BNS will raise the dividend, but even if they don’t I love this bank for it’s international exposure. I own BMO, BNS, and RY, and pretty happy with all three. I wish I picked up TD last year, but I’m pretty solid in the financials at the moment. :)

      Cheers!

      PS Do you have FeedBurner on your blog? Would like to subscribe. :)

      Reply to this comment
  2. Dividend Mantra

    Mar 03. 2013

    Ninja,

    Thanks so much for the mentions!

    I’m glad to be a fellow shareholder in some of the high quality Canadian banks. They are models for the rest of the world.

    Great interview there. Always cool to put a voice with a face.

    Hope you’re having a great weekend.

    Best regards!

    Reply to this comment
    • The Dividend Ninja

      Mar 03. 2013

      Thanx Mantra!

      Besides saying UM and talking too much I enjoyed the interview. LOL just point me to the mic and I could talk about stocks and investing all day long. yada yada :)

      I think the Canadian Banks are going to be just fine. They may hit a rough patch when interest rates rise, but they seemed to handle the crisis well. So I’m inclined to think they can handle the next big-thing hit their way – as long as the Canadian Govt. keeps checks and balances on them.

      Banks are a funny thing, we avoid companies that have excessive debt on their balance sheets – then we invest in banks where debt is an asset. LOL.

      Cheers

      Reply to this comment
  3. Martin

    Mar 03. 2013

    I have heard about TD rising dividends. Besides WFC this seems to be one of a few good quality banking stocks which survived the mess.

    Reply to this comment
  4. robin

    Mar 08. 2013

    In the past year I’ve been following Laurentian Bank (LB) – any reason you omit it here in your discussion?

    Reply to this comment

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