Topic: Dividend Stocks

Dividend Stocks: TSI launches first new investment advisory in 15 years

November 4, 2016|by Pat McKeough

Add Comment

Whatever success you have had with dividend stocks, now you can expect to have much more.

In the first new investment advisory I have issued in 15 years, we introduce a new key to dividend investing.

We have developed a powerful new proprietary rating system that will help you unlock the full power of dividend stocks.

Our ratings scale will help you answer this all-important question about the stocks you invest in: will they keep on paying, and raising, their dividends?

The Growing Power of Dividends Learn everything you need to know in '7 Winning Strategies for Dividend Investors' for FREE from The Successful Investor. The Best Canadian Dividend Stocks to Buy: REITS Canada and other Top Canadian Dividend Stocks.  I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

A company that continues to pay and increase its dividend will have growing sales and earnings, sound management, a strong position within its industry and, often, hidden assets waiting to be unlocked.

These are the stocks that will keep on rewarding investors like you.

Our Dividend Sustainability Ratings will lead you to them. You will find these ratings only in our new advisory, TSI Dividend Advisor. We release the first issue today.

8 key factors to select the best dividend stocks

Companies can fudge earnings reports, but they can’t fake dividends. They are a clear sign of investment quality.

Dividends alone can generate as much as a third of your total returns over time. And usually with much less risk than stocks that don’t pay dividends.

Good companies will do everything they can to keep their dividends secure, and raise them whenever they can. They will rely on rising revenue and earnings, so you can usually count on rising capital gains as well over time.

Chances are, you’ve done reasonably well with some dividend stocks. Now you can do even more.

We use 8 key factors to determine whether a company is likely to keep on paying, and raising, its dividend.

Here’s quick look at just how our Dividend Sustainability Ratings work:

2 points for a long-term record of dividend payment. Steady dividends are the prime measure of strength and stability. We trace a company’s dividend record over the past 10 years.

2 points for a recent dividend increase. We trace increases over 5 years, to get a timely reading on the company’s commitment to dividend increases.

1 point for management’s public commitment to a dividend. Executives don’t like to be called out by the media or shareholders for failing to keep their word.

1 point for being in a non-cyclical industry. Resource and Manufacturing stocks are more likely to reduce their dividends when the economic cycle is against them. Stocks in more stable sectors get an extra point.

1 point for limited exposure to exchange rate/political risk. Exchange rate risk can often be offset by strong revenues. But we shun political risk.

2 points for an attractive balance sheet.  We insist on a strong balance sheet with a manageable level of debt. How a company spends its money is important, too.

2 points for a record of earnings and cash flow. A strong balance sheet can only be maintained with a regular revenue and earnings to generate steady cash flow.

1 point for industry prominence. Companies that anticipate advances in their industry and withstand strong competition also have the confidence to pay dividends year after year.

TSI’s Dividend Sustainability Rating does the work for you

With these ratings, you have accurate measurements you can use for dividend stocks in three categories:

• 10 points or better, stocks with the Highest Sustainability Rating;
• 7 to 9 points, stocks with Above Average Dividend Sustainability;
• 4 to 6 points, stocks with an Average Dividend Sustainability Rating.

You can see at a glance just how likely it is that a stock you own will keep on paying you a dividend. And by extension, just how long this company is likely to be successful on all fronts.

And you can quickly see which among the hundreds of dividend stocks on the market are the right buys for you.

You can trust these ratings. With our long history of assessing stocks for our subscribers and our wealth management clients, we know what to look for. We put our experience and knowledge to work sifting through the hundreds of dividend paying stocks on the North American markets on your behalf.

What’s more, we have made it easy for you to decide where a particular dividend stock will fit in your investment portfolio.

Four Portfolios of Dividend Stocks make your choices easier

In TSI Dividend Advisor, you will get regular reports on the dividend stocks we believe are the best investments.

We will also alert you to dividend stocks that may appear attractive—often due to high yields—but that are unlikely to sustain their apparent success.

You will also get our guidance on how to select dividend stocks for your portfolio. We give you four portfolios that sort these stocks from the most conservative to the more aggressive.

The portfolio names tell you what the stocks in each one will contribute to your portfolio. The first two focus more on income. The next two give added emphasis to capital gains.

• Income Growth Dividend Payer The stocks in this portfolio have a history of providing investors with steady income. They have paid dividends for years, and have regularly raised their dividends (each has raised its dividend for at least the past 10 years).

• Conservative Growth Dividend Payer This portfolio contains well-established stocks with a pattern of steady revenue and earnings. Investors can generally look forward to routine growth in capital gains as well.

• High-Growth Dividend Payer In this portfolio you will find stocks that enjoy rising share prices as well as significant growth spurts. Because they pay steady dividends as well, they can offer an attractive combination of income and rising capital gains.

• Cyclical Dividend Paying Stocks Stocks in cyclical industries often see their share prices fluctuate. The best of them stand to rise significantly with recovery—and reward investors with dividends that grow steadily in all markets. You also get our top choices among Real Estate Investment Trusts (REITs) and income trusts.

Selecting stocks from these four portfolios, you can build a portfolio that is right for your needs, right for the changeable markets ahead and—best of all—ideally suited for building wealth for years to come. 

When you see how our approach works, I think you’ll agree it’s unlike anything Canadian investors have been offered in the past.

For more information on TSI Dividend Advisor and our Dividend Sustainability Ratings, please click here.