Tuesday, August 5, 2014

Dividend increases and stuff like that

Hey FF,

 I will start with a question : How do you guys keep track of all the dividend increases of the companies you own? Not easy at time, no?

Well, sometimes I browse through the web and I find out. Heck, sometimes I even find out on your lousy blogs. Okay, they're not that bad. (Geez you're sensitive)

Fact is, unless you follow each semester financial results you might miss one dividend increase from time to time. And that's a pity because, like we all know, this is the kind of news that brighten your day and week! This or catching a nice trout while out fly fishing.

I see guys owning up to 50 companies and I'm like : how to they do it? (they don't!) I have a 15 and it's hard to keep track of all the changes within the company : mergers, acquisitions, etc. Once I followed a financial letter and the writer was adamant about limiting the stocks you own to 12 or 15; actually he was more leaning on the 8 number!

His rationale : if you limit yourself to strong companies that dominate their sector of activities and have a history of increasing their dividend overt time, the money you invested won't be diluted and you will have a better leverage. Like Benjamin Graham, he was also recommending to own half of your portfolio in bonds. It's other key advice : only buy stock that have fell 10% below their highest price during the year.

That pretty much means you won't buy much stock (valuable one that is) this year. I have to say I pretty much followed his advice. The guys writes a column for a french canadian newspaper, Le Devoir. If you read french (you should by the way, especially if you have been raised in Canada!), go browse through his articles. Very informative.

I can't say I have been hit with a ton of dividend increases in my portfolio lately. But some of the company I own have managed to do well on that front. Johnson and Johnson have increased their dividend for more than 50 years.. so yeah, it's on the top of my list. I bought JNJ in 2010, so that makes it 4 years in a row. Last week, Suncor has increased it's dividend for the second time in a short while. SU and JNJ are my strongest positions so I am quite happy. Royal Bank (RY) has also increased it's dividend twice this year. Conoco Philipps (COP) has also increased its dividend.

I read in the Globe and Mail that there is a strong possibility that Power Corporation (POW) and Power Financial (PWF), two holdings from the Desmarais Family, would increase their dividend this year. These two companies are managed very carefully. I have a big position in these two. So it should be interesting to see how it turns out.

The share of Canadian Pacific (CP) has reached a historic high passing through the 200$ ceiling. Will they split their stock? Or will they increase they dividend? Can't wait to see what the outcome will be. And yes, I am still bitting my hands for selling 50% of my shares while it was up at 75$... I know, I know, hold on dearly to your shares.

Do you see any dividend increase on your side?

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