Canadian investors love their big dividends. The Canadian high dividend approach can also be arranged to create a more defensive portfolio. That can have a meaningful benefit for a retiree and for those who desire to own a portfolio with less volatility. That lower risk portfolio can be easier to handle in troubling times. Experiencing the positive reinforcement of a growing dividend stream can lead to better behaviour. Those growing dividends can help create more stable retirement funding with less sequence of returns risk. We’re building the Canadian big dividend portfolio on the Monday Reads.
Yes, there was no Sunday Reads. I was up in Haliburton at a friend’s cottage (getting the docks ready for winter) and we experienced a power outage. I had no internet. So we’ll have the Sunday reads on Monday.
On Saturday I offered the defensive big dividend portfolio that featured the Hamilton enhanced Utilities ETF. That offers investors the option to use an ETF that can bolt on defensive blue chip utilities. The ETF offers a current yield of over 6.6%. And by ‘bolt on’, you could add that ETF to your existing core Canadian ETF or stock portfolio. In the post I did a bolt-on to Vanguard’s High Dividend – VDY. You might use iShares XIU, or the BMO Low Volatility ETF or other as your core. Saturday’s post also offers up defensive options for U.S. and global markets.
The Sunday reads on Monday
Let’s kick off at My Own Advisor, where Mark offers the more dividend increases edition. Last week delivered some very good news on the dividend front, especially for those in the Canadian energy dividend space. On Canadian Natural Resources (CNQ.TO) Mark offered …
The Calgary, Alberta-based company raised its quarterly dividend to 85 Canadian cents, as energy companies focus on returning the excess profit to shareholders. With this, the company has raised its quarterly dividend twice so far this year for a total combined increase of 45% to C$3.40 per share annually.
I hold CNQ and also Tourmaline (TOU.TO) that raised its dividend 11.1% and then offered a special dividend of $2.25 per share. My oil and gas exposure in my RRSP account is over 10%. Telus (T.TO) also offered a nice raise, and so on and so on.
On Findependence Hub we take a closer look at inflation thanks to Alizay Fatema, Associate Portfolio Manager, BMO ETFs.
Here is a very good post on CTVnews.ca, showing the G7 inflation rates and interest rate hikes. You’ll also find the GDP growth and decline rates in recessions. It’s a very good interactive chart-fest.
This chart is interactive and will run to show G7 inflation rates from 2019 to present.
“When inflation has previously gone to levels as high as it is right now, it’s usually been slow to drift lower again,” a recent note by economists at Deutsche Bank warned. Their research shows that, historically, after spikes in the inflation rate, price increases were still above the pre-shock rate five years later.
The inflation watch was a topic on this week’s Making Sense of the Markets on MoneySense. Kyle also took a look at earnings on both sides of the border.
Dividend Hawk dives in a little deeper on the earnings front. The Hawk also offers the stock reads of the week. One of my favourites, CVS Health was mentioned …
CVS reports third quarter Non-GAAP EPS of $2.09, 6.09% over last year’s result and $0.10 higher than expected. Revenue improved 10% to $81.2 billion, $4.42 billion higher than expected. For full year 2022 management raised Adjusted EPS guidance range to $8.55 to $8.65 from $8.40 to $8.60 and raised cash flow from operations guidance range to $13.5 billion to $14.5 billion from $12.5 billion to $13.5 billion.
I have long suggested CVS as a wonderful play on the healthcare and pharma space. CVS was up 6.5% for the week, and is up about the same over the last year. The stock is hanging in there.
Covering the week we also look to Banker on Fire with the greatest hits, Volume – 42.
And here’s a topic and direction I’m interested in – retirement for introverts, on FiPhysician. We have embrace a lifestyle by design. That can be a little more of a challenge for those of us who lean to the more introverted life.
Dividend and portfolio updates
Rob at Passive Canadian Income offers his October update.
At Tawcan, Bob gives us his Q3 goals and resolutions update.
There’s a TFSA portfolio update on My Prudent Life.
And from Dividend Daddy –
My October 2022 dividend total is $6,676.33
This means that in October:
- I earned $215.37 every day from dividends ($6,676.33 / 31 days).
- I earned $39.74 per hour from dividends (assuming a 9-5pm job).
- I earned $8.97 every hour of every day of the month from dividends.
- My top 3 dividend earners this month were Bank/Utilities related with 38.5% of my monthly dividend total:
- Bank of Nova Scotia ($1,075.32) – 16.1% of my monthly dividend total
- TORONTO-DOMINION BANK ($911.36) – 13.7% of my monthly dividend total
- Algonquin Power & Utilities Corp ($583.08) – 8.7% of my monthly dividend total
And here’s the October update on Our Financial Life.
Always consider the cost of your Canadian home bias. And then in retirement, don’t sell yourself short by attempting to live off the dividends. The lower yielding stocks often offer better returns and allow for greater diversification. Head to stocktrades.ca for more info and ideas on that approach.
Thanks for reading. Have a great week. Don’t forget to follow this blog.
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