Halfway & Taking Stock

 

Halfway through 2022, this year started with a feeling of how spring starts after a long winter. Like a refresh after 2 years of pandemic restrictions but that sort of went off the rails with everything that has happened to date, especially with the cost of living shooting up.

Some folks look to make extra money to keep ahead of climbing expenses in various ways such as a side hustle like the gig economy to extra part-time work to investing.

With investing, the stock market is kind of balancing on a tight rope. There could be a further overall drop in indexes (S&P/TSX in Canada for example) that drag down stock prices or maintain the current bouncing around until a bull market restarts.

Depending on what sectors, companies continue to make more profits like oil/gas, pipeline related, grocery related and most big Banks. A lot of Tech related took major hits to their stock prices this year, which is probably the worst sector currently and some of these companies ranked high in indexes bringing them down but for the most part they seem to be bottomed out in stock price and there's more buying lately. 

On the crypto side, Bitcoin news is not all that great. Currently, BTC is once again bouncing around the 30 grand range but experienced Traders and Data crunchers figure it will crash to around 15 grand before making a rebound next year to 40 grand while the BTC 'halving' approaches in a couple years. That's going by past history cycles but they are assumptions.

As always with investing, it's watch/wait and try and follow the "money". For example, most top Banks in Canada have hiked their cash dividend distributions after huge profits reported once again. Always good foundation stocks to hold or an ETF that holds all of them.

Here is a decent Telecom stock, which I own that has slow but steady growth; Telus Corp (T.TO) with a snippet from a news release about their dividend growth going forward as long as their finances increase as planned. The type of stock I like to add.

In May 2022, we announced our intention to target ongoing semi-annual dividend increases, with the annual increase in the range of 7 to 10% from 2023 through to the end of 2025. This announcement further extends our dividend program originally announced in May 2011 and extended for three additional years in each of May 2013, May 2016 and May 2019. Our long-term Common Share dividend payout ratio guideline is 60 to 75% of free cash flow on a prospective basis.

In May 2022, the TELUS Board of Directors declared a quarterly dividend of $0.3386 per share, payable on July 4, 2022, to shareholders of record at the close of business on June 10, 2022.

The Rock and Iceberg Alley

 

June is one of my favorite months where the weather patterns shift more from rain and wind to more calmer, sunny days but not overly hot or muggy yet on the Atlantic coast of Canada.

I remember well when living on the northeast coast of Newfoundland and looking at the giant icebergs that drifted down from the north along Iceberg Alley with many getting grounded on the rocky shores of the island. Awesome and a huge attraction for visitors to the east coast island province known as The Rock.

June is also the month for some top companies and banks in Canada to go ex-dividend currently within the BTSX method of dividend stock picking and it get's diversified into different sectors.

Always informative reading, Matt from Dividend Strategy gets more into that with his latest post.

Top Telecoms, Banks, Oil/Pipelines, Insurance related and Power producers are a good mix to have in a portfolio.

Bell Canada or BCE, paying dividends for 39 years in the Telecom sector is my choice along with Telus (T) with both having ex-dividend dates this month. 

POW, or Power Corporation of Canada (with controlling interests in Great-West Life) is another top stock I'll add to in June.

In a snippet from Matt's article, this is what I seek and will add to on a steady basis ...

Matt: Absolutely.  Some might argue that government bond yields are safer than these dividends, but there are three important things to remember here.  First, these kinds of stocks have a very long history of paying increasing dividends: ENB – 27 years, EMA – 30 years, BCE – 39 years, and TD – over 100 years!  Second, quality dividend-paying stocks provide capital appreciation in addition to dividend payments whereas bonds do not.  And, third, dividends are taxed far less than bond interest.

Still, short-term fluctuations can make investors nervous.  What would your advice be for readers who might be feeling a little anxious?

Dave: Always in the past, the share prices on these dividend stocks have rebounded after a drop since the yields become too high to ignore. Momentary dips like the ones I have hypothesized should be viewed as buying opportunities.  Blue-chip dividend stocks rarely go on sale but there might be one coming up. And remember, trying to pick the absolute top or bottom of stock price movements is a mug’s game.

Good advice and should be taken just as that ... advice and information from personal perspectives.