This financial crisis appears to be getting worse by the day. The economy is stalled and millions of workers have lost their jobs. 🙁 Did you hear about the man who was fired at a coffee factory? They say he had no filter. 😎 But there is a silver lining here. As the stock market sinks the dividend yields rise. 🙂
Value investing with dividend stocks
Warren Buffett bought 4.3 million shares of Suncor (TSE:SU) last quarter when the stock was trading at roughly $40/share. Today TSE:SU is trading at just $16/share. Buffett is a value investor who only buys profitable companies that have promising growth prospects. Anyone buying SU today would be getting in at a 60% discount compared to what Buffett paid in late 2019. I don’t give stock tips, but I’m just sayin’. 😉
Similar to Buffett I’ve been on the lookout for bargains lately. I purchased many dividend growth stocks throughout this month. In today’s post I will disclose which stocks I bought, why I bought them, and how I have grown my forward dividend income by $7,200 per year. Wowzers! 😀
Narrowing down my options
There are thousands of stocks and ETFs out there. So how did I choose? Well first, I determined which type of investment account to use. This will ensure maximum tax savings. I don’t have much contribution room remaining in my TFSA and RRSP. So most of my new purchases will be in a fully taxable account. This means looking at securities that pay eligible dividends which can benefit from the Canadian dividend tax credit.
I personally like to buy and hold companies that consistently increase their dividends over time. These are known as dividend growth stocks.