What are Dividend Deluxe Bonds and Do You Need Them? [Podcast]



Dividend Deluxe Bonds normally fall into the high-yield stocks. However, to be classified as a deluxe bond, they need more qualities than that… Learn how to differentiate dividend deluxe bonds from dividend traps and know if you need them!

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You’ll Learn

  • A dividend deluxe bond is a company that pays a yield above 4% and that provides a dividend growth policy to at least cover the inflation. What other metrics do we need to find deluxe bonds? What kind of growth can we expect?
  • Most deluxe bonds are stable businesses that would generate a good market cap. Therefore, most small caps would not fit in this category.
  • There’s nothing like examples to better understand a concept so let’s share some! For each, Mike tells us if it’s a Dividend Deluxe Bond or a Dividend Trap and why. We start with a well-known pipeline: Enbridge (ENB).
  • What about Arbor Realty Trust (ABR) that shows a yield above 11%? Isn’t such a high yield a red flag?
  • Mike doesn’t like Target (TGT) much. With now a yield over 4%, is it a dividend deluxe bond or just a defensive play?
  • Canadian Banks had it harder this year. Are they dividend deluxe bonds or dividend growers?
  • A popular stock among high yielders is Main Street Capital (MAIN). Does it meet the requirements for a Deluxe Bond?
  • What about Labrador Iron Ore (LIF.TO), showing a yield close to 9%? As a cyclical and volatile holding, is it stable enough?
  • The ice seems thin between a Deluxe Bond and a Dividend Trap. How can we make the difference?
  • How can investors avoid investing in a company on the verge of cutting its dividend thinking it is a dividend deluxe bond?
  • In the end, does Mike think that investors need deluxe bonds in their portfolios?

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Beware of These 10 Next Dividend Cutters [Podcast]

Hesitating between multiple Dividend Deluxe Bonds? Here’s how to compare them!

Mastering Stock Analysis: A Guide to Comparing Multiple Stocks – Discount Stores Edition [Podcast]


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This podcast episode has been provided by Dividend Stocks Rock.

The post What are Dividend Deluxe Bonds and Do You Need Them? [Podcast] appeared first on The Dividend Guy Blog.

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