At the beginning of each year, I build two virtual portfolios. One includes twenty strong US dividend stocks and the other one ten Canadian dividend payers. They are built using my 7 investing principles and they show a strong appetite for growth. I started this tradition in 2012 and here are my results so far:
US portfolio total return: +12.37%
CDN portfolio total return: +14.69%
US portfolio total return: +35.27%
CDN portfolio total return: +19.80%
US portfolios total return: +8.24%
CDN portfolio total return: -1.93%
How do I pick my stocks?
As you can see, creating a great amount of wealth year after year doesn’t come by luck. Some may say it was a great bullish market; however, my portfolios often beat the market (the Canadian market was only up 3.02% in 2012 while my portfolio generated 14.69% return). I don’t pretend to be a guru and do make mistakes. In 2012, I picked RadioShack (RSH) and in 2014, I picked Black Diamond Group (BDI.TO). Both stocks performed horribly in my portfolio. But the overall selection did well and better than most portfolios and indexes.
I usually start my research in December, one month before publishing the book. The first step is to pull out a list of stocks following a strict set of rules. They include earnings, revenues and dividend growth over three and five year periods. The point is to pick companies showing a similar trend for the three data streams (earnings, revenues and dividend growth). This is a good indicator that the company hasn’t played around with accounting principles and generated a big year to fool investors. Then, I look at the dividend yield and dividend payout. Here again, I’m looking for a reasonable yield but my main point of focus is a low payout ratio. My goal is to make sure no company in these portfolios would cut their dividend during the year I select them.
This first filter usually gives me about 50 to 150 stocks per market. Companies with stellar fundamentals will be picked first. It is pretty rare to find a company that is strong everywhere. These are picked automatically. Then, I look at sectors and trends for each fundamental studied. The stronger the trend, the better the chances I will pick the stock. Considering the sector also avoid taking too many companies in the same basket and this forces me to make choices. A classic example is when I search through Canadian stocks. Usually 4 to 6 banks appear and there is always one or two other financials like insurance companies or conglomerates that are added to the list. It doesn’t really make sense to pick 6-8 financials in a 10 holdings portfolio. This is why I try to take 2 or 3 maximum (usually two banks and another financial). I have to leave the others and make a choice for that year.
Once I’ve pulled portfolios together, I look at each stock’s latest quarterly report. I want to make sure the data I’ve pulled out from the past 3 and 5 years are a good mirror of what will happen in the following 12 months. Sometime, you pick a company right before it fails. This usually happens when you only base your investing process on past data. It’s important to look at what has been published recently and how recent events will influence the company in the near future. There will always be uncontrollable news such as the drop in oil prices endured since late in 2014. Nobody saw this coming and that’s part of the game. Then again, this is the idea of not having all companies coming from the same industry.
What’s the purpose of selecting 30 stocks for each year?
The goal behind the Best 2015 Dividend Stocks eBook is to give investors a starting point for their research. We always look for new stock ideas and most investors don’t really have the time to do proper due diligence. While these stocks are not to be taken as recommendations, much of the research has been done for you and the book provides fundamentals data along with my investing theory. I even provide potential risks for each of them. I could have written 5 pages worth of analysis per company and bored you to death. Instead, I’ve condensed all my research into a single page per stock. This is how you get the best of both worlds with the Best 2015 Dividend Stocks eBook.
What are Your 2015 Best Dividend Stocks Results so far?
Stock ideas are only fun when they generate returns, right? Hahaha! As at January 30th 2015, my US portfolio is in line with my benchmark showing only -0.22% behind the Vanguard Dividend Appreciation ETF (VIG) and my Canadian portfolio beats the benchmark by 4.48% (I use iShares Dow Jones Canadian Select Index Fund ETF (XDV)). While true it’s only a month and stocks are showing great fluctuations as new quarterly results are being published every day. However, this seems to be another great start for 2015.
Are you ready to start your portfolio?
If you are looking to start your dividend growth portfolio or simply improve your existing one with fresh ideas, this book is definitely for you. That’s 40 pages worth of solid information for only $4.99.
This year, I offer both versions: PDF or Kindle.
Click on the button below for the PDF file:
Click here to buy the Kindle version (Amazon link)