2 solid dividend stocks trading under $3.00

2 Dividend stocks to check out

One thing I see a lot of people talking about is that they don’t want to buy shares in a company if they don’t have enough to DRIP a full share each time they pay a dividend.

A lot of the time, this means you will need to put down quite a large investment to ensure you can DRIP a full share – for example,  see the table below on 3 of the more popular/most analyzed stocks around, and take a look at  how much of an initial investment you would need to ensure you DRIP 1 full share:

Company Stock Price Dividend # of shares Needed Investment Needed
Royal Bank $99.50 0.98 102 $10,149.00
CN RAIL 107.69 0.455 237 $25,522.53
Fortis 46.02 0.45 103 $4,740.06

First of all – don’t get me wrong – I am not saying any of these 3 would be a bad investment. In fact I own them all inside my Canadian funds.  Today’s post however is for those people looking at a much smaller initial investment – with upside, and who want to ensure they can DRIP a full share.  The 2 stocks I will discuss today (which I currently own) are:

  • Diversified Royalty
  • Western Forest Products

Diversified Royalty ($DIV.TO)

From their website:
Diversified Royalty Corp. (“DIV”) is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV’s objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors.

Currently DIV has 3 royalty streams, which are: AirMiles, Sutton Realty & Mr. Lube.  Div pays a monthly dividend, and currently yields a whopping 7.54%.  The payout ratio is currently above 100%, which in most cases would be a red flag – however they are also sitting on a pile of cash, and have plans to add a 4th royalty stream soon.  Once they do – their payout ratio should drop back below 100%.  Mr. Lube has been a great partner for DIV – and represents the majority of their income stream – which has been growing year over year.

I believe DIV is currently trading at a discount because investors are concerned about the payout ratio (Even though management has been very clear about this, as well as future plans to reduce it).  When DIV inevitably announces their next royalty deal, I would expect the share price to jump back above $3.50 (a 20% gain).  In the meantime, you can sit and collect a juicy 7.5% dividend.

Moneysense also listed DIV as one of their top 50 stocks for 2019. 

Total investment needed to DRIP 1 share per month: $473.60

Western Forest

Western forest is another company I currently own, which I think is undervalued based lumber prices and general USA uncertainty (Trump)..  It is currently trading at just 10X Earnings, and trading at a big discount to its 52 week high.  It also pays a quarterly dividend of 0.0225 (yielding 4.35%).

Western Forest has an impeccable balance sheet (zero debt!) and recently raised the dividend (June 2018).  With a payout ratio of just 45%, the dividend is not only safe – I wouldn’t be shocked to see another increase in the future.

16% of their revenue comes from China – which could also be scaring some investors off, after the recent Huawei debacle – but as long as you are patient, I think Western Forest is a great long term play.  Western Forest has acquired/upgraded some of their plants/processing which will help improve margins going forward.  Western Forest has also been buying back some of their own shares, because they seem to agree the price is currently undervalued.

You can read my full post on why I originally purchased WEF HERE

Total investment needed to DRIP 1 share per quarter: $178.00

Thanks for reading & best of luck in 2019!

A few bloggers I’d like to have a beer with!

Beer with my fellow bloggers!

Tomorrow is Friday – which means twitter will probably be full of “Follow Friday” tweets.  I’ll get it started one day early.

This edition of Follow Friday will include 5 personal finance bloggers that I’d most like to have a beer with.  This means they are people who, aside from having interesting websites I think would be fun to hang out with on a personal level – enjoy having a drink or two with – and share some of the same personal interests (mostly sports and booze 🙂

 

  1. CheesyFinance Even though he is currently having a No Beer in 2019 year- Cheesy is was always on twitter posting pics of some of the rare and interesting beers he is drinking.  Check out his recent post on his reason for no beer in 2019 HERE
    I guess I’ll have to wait until 2020….
  2. Rob @ Passive Canadian Income Rob and I have a lot of similarities.  We are the same age, married, have 2 young children and a dog.  We own a lot of the same stocks, and more importantly we also both like sports and beer.    Aside from being a Maple Leafs fan – everything else about him seems alright.
  3. Sarah @ Smile & Conquer
    Much like Rob – Sarah and I, have a lot in common.   We are both Canadian, close in age, atheists and  big hockey fans.  Her and her boyfriend are Oilers season ticket holders (poor bastards).  Sarah posts tend to be more focused on saving & budgeting vs stock analysis, but she touches on investing as well.  She has a couple of dogs and cats and recently moved into a new house!  When I interviewed Sarah a few months back her answers really resonated with me – and I think she’d fit in well in my social circle.
  4. Sabeel @ Roadmap2Retire: This was the first site I started following/commenting on, which eventually led to the creation of my site.  Although he is not a big cocktail person (pretty sure I could change that) – he loves beer.  What I like most about Sabeel’s site is his knowledge -not just on individual stocks, but the economy, precious metals and general personal finance.
  5. Mark @ MyOwnAdvisor: Mark is probably one of the most successful bloggers in the personal finance space.  He’s been around forever and was one of the first sites I started reading.  More importantly though – he loves beer too!  Along with Roadmap2Retire & CheesyFinance he like to share pics of whatever delicious beer he is enjoying on twitter. He is also a big Senators fan, and oddly enough, the most traffic I ever got in one day, was when he shared a link to my site (the bar section).

 

Anyways, check em out, and if you ever run into them…buy them a beer!

 

 

Stock Picking Contest(s)

Stock Picking Contest

Every year  around this time people start posting their goals, weight loss challenges, recaps of the previous year and my personal favourites: Stock picking contests!

This year I entered two different contests – which are run slightly different.

Contest 1: Roadmap2Retire’s Stock Picking Contest

Sabeel from Roadmap2Retire runs an annual contest where he invites financial bloggers to choose 1 stock they think will perform the best over the next 12 months. Typically whoever wins this contest will pick a weed stock, or some penny stock that happens to jump 60% over the year.  Instead of gambling on something like that, I wanted to pick a stock that I would be comfortable owning, and one that I intend on buying this year.  I probably wont win the contest with a strategy like this, but I’m an investor – not a gambler.

The stock I chose was: Transcontinental (TCL).  I’ve had this company on my watchlist for about 6 months, after it screened very well in my summer stock screen.  I even wrote a follow up post about the company about 2 months ago, after it had dropped in price to a discount of about 30% from its 52 week high.  You can read that full post HERE.

 

Contest 2: AssetBasedLife Stock Contest

Paul from Asset based life is also running a stock picking contest.  This one is a little more in depth, as you are not required to just pick 1 stock and hold it all year.  In this contest, you are given $100,000 (USD) of play money, and can buy as many companies as you’d like.  You can also buy and sell throughout the year.

So far 15 people have registered for this contest, and I am happy to say I am currently sitting in 1st place (up 7.39% in 10 days!).  Obviously there is still a lot of time left to go – but anytime I can brag about beating some fine people like Nelson from Financial Uproar, Paul from AssetBasedLife, DividendGrowthInvestor , Mrtako  and others you know I will!

I am not sure how active I will be in this contest, ideally my picks will continue to make gains, and I won’t have to make many trades.  The strategy I used was to pick companies I am familiar with, which I think have good growth potential and which had recently dipped quite a bit.  Here is the list of stocks I started with:

Stock Price Purchased # of Shares
Artis Reit 9.3 1000
Dollorama 32.37 500
Laurentian Bank 38.7 499
Power Corp 24.52 750
Interrent Reit 12.98 1100
Transcontintenal 19.57 1000
Caledonia Mining 5.72 997
Xcco Technologies 9.18 1500
Richelieu Hardware 22.87 570

Currently all my holdings are up, except for Interrent Reit. which is just down .08%.  My biggest gainers are Laurentian Bank (12.87%) and Richelieu (8.13%).

 

I’ll try to post a quarterly update each month until these contests are done!

 

An absolute beauty! Maraschino Sour

Regular readers of the site, and fellow drinking buddies know I’ve been pretty big into sours lately.  I had bought some lemons over the holidays to serve up whiskey sours for our guests – and I had a few extras lying around. I have also been trying my own twists and different takes on some classics as well – so I made the following:  Maraschino Sour!

Bourbon Sour Cocktail

Ingredients:

3 oz Buffalo Trace Bourbon

1 oz Maraschino Syrup

1 Oz Lemon Juice

.75 oz Egg White

The drink itself was delicious, but what I loved most was how god damn beautiful she looked.  Here is a pic of the foam/froth:

Frothy bourbon sour

To ensure a beautiful frothy foam, make sure you dry shake all ingredients (without ice) as vigorously as you can for about 30 seconds.  Next, add the ice, and shake again for 20 more seconds.  Strain through a fine strainer and enjoy.

You can find other cocktail recipe’s on the “My Bar” tab as well or by clicking HERE

Cheers!