Good News

Seeking Alpha has a great article about safe dividends on the S&P - good for me anyway.

Check it out : Safe Dividends

I have not been super active on this blog for the past couple of months, but that is part of the beauty of this style of investing for me. I can focus on my personal life, which has become "interesting" - and not worry too much about my investments - and still watch my dividends roll in and or DRIP adding to my portfolio.

Simple Learnings

Going back to my "Doh!" moment, I come to the conclusion that if I am going to make the most of compounding the returns I can gain from this investing style, then I must make certain that any stock that I will wish to make use of DRIP with; I must be sure to purchase enough shares/units to make certain the dividends earned are enough to buy more shares/units.

With that simple concept, I feel as though a light, albeit a small one, has come on.

I have today added another 165 units of HCR.UN bringing my total to 320 which will earn in the ballpark of about $25 a month, enough to get another "free" unit every month, maybe even two....

Newest Step

Heyo Folks -

I have had a bit of a "Doh!" moment this week. I realized that I cannot DRIP part units of most of my stocks - I simply do not have enough dividends coming in to get new shares for the dividends earned.

This now seems like an obvious thought - but like I said I am still learning.

This week I picked up some payments from my REITs - every little bit adds up.

I have spent a good portion of the week reading and learning from a couple of blogs out there notably:

The Passive Income Earner
Dividend Money
and of course
The Dividend Guy Blog
and many others that I visit on a regular basis.

I had some money moved over from an RRSP I had with an old employer - and more to move as I get clearance to move over the profit sharing portion.

With that money just sitting there and not paying it's way; I have been looking for somewhere to put it. That in mind and applying what I have learned from the blogosphere I created a screener and tried to locate a stock to put to work for me.

My screener looked for the following:

• Yield > 4.5%
• EPS growth over previous year > 10%
• Dividend 5 year growth average > 8%
• Dividend Coverage (EPS/Dividend*100) of at least 115%

This screener returned three possibles

• Emera Inc  (TSX:EMA) witha a 57.7% 5 year annualized return
• Wisconsin Energy Corp (NYSE:WEC) with a 48.1% annualized return
• Altria Group Inc (NYSE:MO) with a 142.6% 5 year annualized return

I ruled out Altria right away as it is a tobacco company - as it turns out that matters to me.

That left me with Emera and Wisconsin Energy

Both are in the utilities world. Emera has the much higher yield and the better dividend growth rate. Wisconsin Energy has the better EPS growth and better dividend coverage.

Name	EPS Growth (Projected This Year vs. Last Year)	Dividend Yield	Dividend Growth Rate 5 Year Average	Dividend Coverage
Emera Inc	16%	11%	70%	145%
Wisconsin Energy Corp	30%	5.10%	36%	244%

Ultimately I decided on 100 shares of WEC for a couple of reasons

• A chance to leverage the strength of the Canadian dollar
• WEC looks to have better long term prospects to grow the dividend

Now with both Algonquin and WEC in my portfolio I am a little utility heavy so now need to find my next target. I found a couple of articles which may help one about Microsoft, Dell and Cisco at Frank Voisin and another at The Dividend Pig about Intel.

Let me know what you think!

Getting Started

Hello Folks -

My name is Neil and I am at the early stages of investing. I am, as the title suggests, a beginner to investing.

I have done some studying of investing in growth stocks, value investing and even options trading.

The purpose of my writing this blog is to participate in the online community from which I have read and learned so much. I am NOT advocating that you follow and do what I do; I am NOT an investment professional - so please before you invest consult with a professional - and do your own due diligence.

After much reading and coming to a realization as to what my comfort level is, and my goals, I have arrived at my personal investing strategy.

So here is my mid term goal : Earning $12,000 a year from dividend paying stocks.

My strategy to get there is quite simple - everything in my portfolio must pay. Each stock or unit MUST give back - provide income of some sort or another.

I use TD Waterhouse and Royal Bank Direct Investing for my investing needs and research. I find the TD Waterhouse stock screener easier to use, but use both to research what my next buys will be.

As of today's writing I have about $21,000 in existing investments.

Some of the rules for picking what I put my money into are as follows:

The dividend payout ratio, should indicate that the dividend paid out is sustainable - while leaving enough money on the books to invest back into the company - I am going to look for stocks which have payout ratios of around 60%. (dividend/EPS)

As I am getting a bit of a late start; I am going to be chasing yields a little - going forward the yield has to be over 5% or the stock has to have the potential to increase the dividend and increase the stock price - thus giving me the return I want.

I am going to take advantage of DRIPs where possible - TD Waterhouse does this painlessly - allowing me to pick up more shares or units and not have to pay the broker, taking advantage of compounding my returns over the long term. Currently I am not DRIPing all my stock just MSFT, AQN and HR.UN - the remaining dividends will accrue in my account to give me a nestegg from which I can rebalance or take advantage of buying opportunities.

I will add to this over time and as I learn more.

This should be fun - I look forward to interacting with the online community..