Some say that equity markets are “risky.” In today’s world investors can buy 10-year Canada bonds yielding less than 2%. Given inflation in Canada which averages between 2% and 3%, it seems to us that bonds are incredibly “risky.” This is because after the effects of inflation an investor would be guaranteed a loss of purchasing power over 10 years. For a taxable investor the situation is even worse as the government will take up to 50% of your 2% yield, thereby making the total loss of purchasing power over the 10-year term even worse. A Leon Frazer portfolio, on the other hand, has a higher (dividend) yield than a 10-year bond.
Over the long-term, companies that pay and grow dividends significantly outperform the broader market, with the added bonus of also being less volatile. A sustainable growing dividend limits downside to a stock during periods of market panic and provides a consistent signal of progress as time passes. According to our research, over the past three decades, 73% of Canadian stock market performance can be explained by the increases in the underlying dividends.
Fortis Inc., the Newfoundland-based utility company, is one of the largest and longest standing holdings in all Leon Frazer portfolios owing to its exemplary record for increasing dividends. For 40 straight years, Fortis has increased its annual dividend every year, building a perfect “dividend staircase.” Over time the stock price has little choice but to follow the dividend upward. We attempt to build Leon Frazer portfolios with as many of these “dividend staircases” as possible.
By Lenore Davis
Appearing on Business News Network (BNN), March 11, 2013, Ryan Bushell discusses Leon Frazer’s views on companies such as Scotiabank, Pembina Pipeline Corp, PotashCorp, and others. Click picture to view.
Appearing on Business News Network (BNN), January 3, 2013, Ryan Bushell tells investors “now is an important time to be investing in dividend-paying stocks.” Commentary on Bell Aliant, Baytex Energy, Crescent Point Energy, and Canaccord Financial. Click picture to view.
North American markets snapped back in the third-quarter 2012 but the recovery process will be slow and choppy, says Leon Frazer’s Q3 2012 Quarterly Review
Since 1980, 73% of market appreciation can be attributed to increases in dividends so don’t get caught up in listening to all that awful global economic news
Despite the recent out performance of US equities, the Quarterly Review reminds readers that Canadian dollar investors have not made positive returns in the US market for 12 years, and that includes dividends
Investing in blue-chip companies in key industries such as the banking, pipeline, utilities and telecom segments may be boring, but it works, says the Leon Frazer Quarterly Review
Downside volatility, not seen since the global financial crisis, sent shockwaves through markets, reported the Leon Frazer Quarterly Review for the third quarter of 2011. Plus, the Review weighed in on debt, savings and what they means for investors
By Brian Wilson
By Bruce Ball and Dona Eull-Schultz
Saving rates are changing to deal with economic crisis. They may never go back