Update: For the Dividend Growth Index – sold position in Staples Inc. (SPLS) on missed earnings and low margins, and purchased a position in Johnson & Johnson (JNJ). The Office Sector Slump While stock markets are on a tear since their declines in May this year, the office supplies retail sector has not been doing so well. Sales, profits and revenues have been declining , leaving the office supply retail sector in a bind. Take the smaller player in the industry Office Depot (ODP), with a 450 million market cap, which last June closed all its Canadian retail locations. Office Depot has a razor thin profit margin of only 1.01%. When I looked at the office supply sector back in May 2011, Office Depot was worth over 1.1 billion dollars. Then there’s OfficeMax Inc. (OMX) with a market cap of 476 million dollars and a 1.5% dividend yield. It now has a profit margin of only 0.59% and a massive debt-to-equity ratio of 272%. In other words, the company is worth 476 million, but carries ...

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U.S. Blue Chips on a Tear! Unless you had your head buried in the sand the last two weeks, you probably noticed the big U.S. blue chips such as JNJ, HD, and MCD having been going through the roof!  If you are holding any of these stocks you are certainly seeing some nice capital appreciation. I always felt U.S. stocks were undervalued compared to our Canadian counterparts. JNJ for example, is trading at $65.01 an increase of 12.7% from its recent low of $57.66 on March 16th. McDonald’s (MCD) is now trading at $78.60 an increase of 7.6% of from its recent low of $72.99, and the list goes on… Flight to safety? These stocks are the Dow Jones Industrial Average (DJIA) companies. Another way to take advantage of that growth, if you don’t want to contribute to your RRSP or buy stocks directly, is through an index-fund that tracks the DJIA. Two low cost alternatives that come to mind are in the TD e-series funds: TD Dow Jones Industrial Average Index, and TD Dow Jones Industrial ...

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US Stocks do not receive the dividend tax credit, and US dividend income is fully taxed unregistered or in a TFSA. So holding US Stocks inside your RRSP makes good sense.  Some of the big US blue chips also pay reasonable dividends of 3.00% or more, are deemed safer than the US Dollar,  and  raise their dividends annually. In addition the dividend yield on these blue chips is higher than the current rate for GIC’s and government bonds. I’ve picked three of the Dividend Cadillacs for US Stocks. You’re not going to get a huge capital gain on these companies, and you will be lucky to see 10% growth or more per year. Nor are you going to get a bargain. But you won’t be laying awake at night either wondering if you should have bought a safer stock. While US Banks are on the verge of collapsing, US Blue Chips are proving to be pillars of the US economy. Since September these stocks are on their way up, so if you have the funds US Blue Chips are worth considering: Chart ...

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