Official Long-term Investments Thread

[roopi]

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Seem relatively stable to me, but I am open to opinions before I open a position.

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There's a right and a wrong reason to buy CJ. You're basically flipping a coin with their dividend since it depends on where oil goes. Almost never a good idea to buy a struggling company purely for the dividend since a high dividend usually indicates high amount of risk. Ask yourself if its really worth taking on so much risk for an additional 3% yield when you can buy Enbridge or something similar that pays out 5%. Chesswood (CHW) is a equipment leasing company that pays out a similar dividend and their underlying business a lot more stable although still economically sensitive. Makes more sense to buy CJ because the assets are undervalued (60% of book value) while getting paid to wait for valuation to appreciate.

From the statements you posted it does sound stable. But just read what Manhattan said. IMO he is exactly right.

[JDMMAN]

roopi - looks like your assessment on PEYTO might be right, apparently on BNN there was an analyst that says their dividend will potentially get cut to 3.9%.

[zhao]

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No company pays out 8-9% a year for long. Either they make more money so the yield isn't that high or they cut the dividend.

That is easily proven wrong, and not exactly how dividends work. First off, I agree that 5-6% is the sweet spot of dividends if that is what you're saying, and anything over that really really needs to be distrusted and looked in to very hard. A 9% dividend IS a huge red flag. But that said, here is some examples of what i've owned where your statement is proven wrong. I'm sure there are other examples out there as well.

Rogers sugar (RSI):

Dividend of 0.09 a share 1/4ly, or 0.36 a share per annum. It has been this for over half a decade, and prior to that it was .085.
stock price 5 years ago was 6.50, fell to $4ish, held that range for a couple years, and then traced back up to 6.50+.

The math says for 2 years after its crash from 6.50 down to 4.0x it held its dividend as it was sustainable, and that translates in to a 8-9% dividend during that entire time. What does that mean for the stock? well, it traced back up to 6.xx eventually because a sustainable dividend at 8-9% is very attractive. Why did the share price fall and the dividend stay good? Because there was nothing wrong with the company's balance sheet or profitability, and the falling share price could be blamed on what moves stock besides profit... which is a lot: speculation, distrust of the market they are in, hype, greener pastures elsewhere, ect. A falling share price does not guarantee a loss/decline of profits, or a dividend not being sustainable.

Chorus Aviation Inc (CHR):

I did the math/DD on CHR too when it was around $7, and back then it had a 7% or so dividend (and a year before that it had over a 8% dividend with a share price under $6), and it was totally sustainable. That was a hell of a safe investment as that company crept up to $9.8x a share over the course of the year. My wife and I bought in at 7.25 (I sold shortly after to move on to... greener pastures) and she just sold it at 9.7x, she made 35% off the share price + the awesome dividend on top of that. If i told her to buy enbridge during that same period like her brother did, she would have lost 4% off share prices and not broken even off the dividend.


So when you say CJ is garbage because it has a 8-9% dividend, I say, if the dividend is sustainable, you likely have a company that will trace up to where the dividend is 5-6%, and that means someday this should easily be a $7+ company, and that is a hell of an investment. Of course if the dividend is not sustainable that changes everything, but my DD said above 50 a barrel it should be ok. My DD also says it isn't a struggling company and is doing ok. Currently we have quite the cushion on that, so to me it seems like a fairly safe bet given the potential upside. For my level of risk its actually a bit boring. I owned it briefly this year, but dividend stocks are not for me right now. My wife however just bought it in the $4.7xs, because she does not like the risky stuff i tend to buy, tends to hold stuff longer, and tends to never sell stuff until she makes something off it, meaning a dividend stock like this is a good fit for her.


As for risk, if people want no risk, GICs are good for that. Of course an Oil dividend stock is risky if oil goes down; that's probably exactly why this stock is sitting at $<5 a share when with similar fundamentals it was double that last year. Enbridge has risk too; that stock could be $40 a share within a year as its been on a downward slope all year. PPL is another good dividend stock IMO; I like that a lot better than enbridge personally, not that enbridge is crap, but enbridge is a different breed of stock than stuff like CHR was, or CJ is now, or even PPL. I'd buy RSI over enbridge right now too even though they are on about par for potential growth imo, but RSI is fairly predictable (likely it'll hit close to $6 again at some point, and hover around 6.30 for most of the time, and randomly go up to 6.50ish, then rinse and repeat). Everything worth investing in has risk, and the important thing is to find the amount of risk you're comfortable with, do your own DD, and try to pick something that could be a no brainer.


and as for 3% more not being a lot... imo, when you take in to account inflation averaging out to eating 2% of your return, 3% more is double what you are getting ahead by.

[JustinL]

CJ looks like a speculative move to me. They're losing money and paying a big dividend, somethings going to give or they're going to need a big turnaround in profitability. I like dividend companies for my long term stuff because the share price is less volatile and the return is somewhat more certain. I prefer real estate, banks and mortgage companies in my dividend group as the revenue stream to pay the dividends is quite stable. Sure they may not rocket up in value like a marijuana stock, but that's not really the point of a long term investment.

[ExtraSlow]

What about a guy who's been holding cj for several years? FML this is why I am trying to stop buying individual stocks.

[ickyflex]

I don't think any energy company is a long term hold unless it's midstream.

CJ you are holding for the medium term for a reasonable dividend and capital appreciation. The dividend is sustainable @ $47 WTI and their acquisition from last year has a few more assets they want to sell off from the core piece they wanted. Those assets are now worth more today in today's price environment.

It's holding back because differentials for CDN Heavy/Light oil are both in the shitter. Light oil is at a $10 diff vs $2 historical. So thats $8 off the table not being realized. If differentials tighten and market continues to rally you'll likely get a reasonable return for holding something a bit more higher risk. Balance sheet is cleaner than others.

If you want the exposure it's not a bad play to be in, but by no means is this a 10 year hold

[OTown]

Bit the bullet a month ago and bought some BlackBerry stock. Very happy so far with their performance and return. The company is really making a turn-around

[roopi]

For people looking for a steady dividend/income stream with a high payout take a look at DGS Dividend Growth Split Corp. It is a managed fund with a fee (don't recall the amount but I believe around 0.06%). At the beginning of 2010 the price was about $8.00 and today it's about $8.00. In that time frame there have been some highs and lows of $10/$4 but overall pretty steady if you are looking for long term. Of course the history doesn't mean anything but something to look at if you are looking for income. You can view all the details here: http://bromptongroup.com/funds/fund/dgs/overview

Dividend History:
2017 - $1.20/year
2016 - $1.20/year
2015 - $1.20/year
2014 - $1.20/year
2013 - $1.20/year
2012 - $1.20/year
2011 - $1.20/year
2010 - $1.20/year
2009 - $0.70/year
2008 - $1.19/year

[taemo]

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For people looking for a steady dividend/income stream with a high payout take a look at DGS Dividend Growth Split Corp. It is a managed fund with a fee (don't recall the amount but I believe around 0.06%). At the beginning of 2010 the price was about $8.00 and today it's about $8.00. In that time frame there have been some highs and lows of $10/$4 but overall pretty steady if you are looking for long term. Of course the history doesn't mean anything but something to look at if you are looking for income. You can view all the details here: http://bromptongroup.com/funds/fund/dgs/overview

Dividend History:
2017 - $1.20/year
2016 - $1.20/year
2015 - $1.20/year
2014 - $1.20/year
2013 - $1.20/year
2012 - $1.20/year
2011 - $1.20/year
2010 - $1.20/year
2009 - $0.70/year
2008 - $1.19/year

nice 14+% yield.
is it monthly or quarterly?

nvm I fail at reading

Distribution
Class A1 (monthly) : $0.10000
Preferred (quarterly) : $0.13125

[suntan]

DGS's distribution is mostly ROC. This is basically a ponzi scheme.

[dirtsniffer]

Could you explain this more to me?

[roopi]

It's not a Ponzi scheme. They are returning part of the NAV to you in the yield not someone else's capital. So you could look at it as if the yield really isn't that high since part of it is capital.

Disclosure: I do not own any of this and I only posted it for people looking for income.

[tonytiger55]

What are your guys thoughts on CPO...? (Cobal Power Group)

[ExtraSlow]

You mean cobalt? So thinly traded it'll be really hard to get in and out at target prices. Although sometimes that can be an advantage as sometimes you can scoop shares below the posted quote.

[tonytiger55]

Yeah sorry I meant Cobalt.

College at work was raving on about it months ago. Heard it on the news this morning. Am tempted for a buy and hold.

[ExtraSlow]

It's wildly speculative. I'm not a mining guy so I can't speak to the future possibilities, but they have been loosing money pretty steadily. Only source of income is issuing new shares or giving away shares in exchange for more mineral rights. Looks like they plan to do a lot more of this as well, so your percentage of the company will only shrink over time.

Right from their most recent statement:
Liquidity
As an exploration company, Cobalt Power Group Inc. has no regular cash in-flow from operations, and the level of operations is principally a function of availability of capital resources. To date, the principal source of funding has been equity financing. As at October 31, 2017, the Company had $1,322,175 in cash (January 31, 2017 - $190,809). For the foreseeable future, as existing properties are explored and developed, the Company will continue to seek capital through the issuance of equity, strategic alliances or joint ventures, and debt, of which the Company currently has none.

[J-D]

Anyone have any thoughts on ALA (AltaGas) or RNW (TransAlta Renewables)? Both seem to have taken quite a dive lately but maybe entering oversold territory?

Biggest risk with ALA seems to be a lot of folks betting against the WGL merger.

[OTown]

WGL merger, as well as some debt/financing questions. But otherwise I am holding onto my ALA. Great dividend

[roopi]

Purchased for long term holding today:

1. BNS - Shittiest performing bank stock so decided to buy it.
2. MOGO - Fintech stock with potential of takeover or if they can start turning a profit this will be a double IMO.

[dirtsniffer]

Good opportunity this morning to increase or open in cpg.