With April 2023 coming to a close, I read a couple interesting posts about which is better when seeking dividend yield over the long run.
Before I get into that ... why bother with the accumulation of dividend cash? Investors use it to cover personal expenses, trips, tap into the cash when needed or buy more stock for dividend growth.
Last week I read Globe and Mail's Rob Carrick's article about owning individual stocks over ETF's.
Recently, Matt from Dividend Strategy weighed in on that debate which I'm sure is on a lot of DIY investor's minds, specially those just starting out.
An individual's choice for sure. With a purchase into an ETF like Royal Bank's RCDC, your spread out into a number of top companies and banks by weight but ... your paying management fees and more than likely the monthly cash distributions will remain either steady or fluctuate like a lot of Blackrock's ETFs.
Some folks like the same steady cash distribution coming in so they know what they are getting without guess work or looking it up when distributions are declared.
When buying top companies and Banks individually and doing some research while keeping current on their sites and news, there's no management fees and dividends tend to grow each year or ... remain steady.
There are commission free sites out there where buying stocks comes with no charge like TD's EasyTrade and Wealthsimple Trade (fractional stock 'buys' an option) in Canada.
I prefer dividend growth and the BTSX portfolio provides this with an average current yield of 5.75% over the 10 stocks. The only company I'm not into is AQN in the current BTSX portfolio.
It's not 100% fool proof however and nothing in investing should be considered so. Every once in awhile, a company will stumble and make the decision to lower their dividends for the long or short term until their 'Books" stabilise and generate more cash flow in the future.
Like the football 2000 movie " The Replacements" starring Keanu Reeves and Gene Hackman there are plenty of replacements to choose from to make a winning combination and I own several like Sunlife Financial (SLF) and Telus (T) when it comes to accumulating dividend cash.
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