Don’t we all.

Truth be told, the only stocks that will achieve seriously lofty yields are the ones mired in uncertainty. Want to scoop up shares while smart-money institutional investors and asset managers dump them? I certainly don’t.

Let’s take a look at four stocks with big dividends — and seemingly little else going for them.

OK, boomer – the long-term care fad

Shifting demographics have driven some retail investors toward stocks in nursing homes and the like. There appears to be some sort of delusion that the aforementioned trends aren’t well-known pieces of information to the market at large.

Taking a look at Sienna Senior Living Inc. (TSX:SIA), buyers must be sold on the old folks because the company’s distribution looks like a lousy reason to put your money in this stock.

At nearly 200 times earnings, Sienna is pricey. Further, the company trades at around twice book value and has a sky-high payout ratio while yielding about 5%.

Forget the aging-population story: just look at the numbers. If you want to gamble on stock-picking ideas and speculate on the future, then you would do just as well to load up on a Silicon Valley disruptor.

Risk-on REIT

Who wants to pay over 100 times earnings for a nearly 9% yield? Not me, thanks.

Slate Retail REIT (TSX:SRT.UN) makes me cringe with its combination of weak earnings and a monster payout. How can this company look at their books and justify dividend increases? It truly boggles the mind.

Most disturbing is Slate’s capital recycling program, which has actively driven down net asset value per unit. The REIT’s dispositions have made the trust worth less, not more.

If you bought Slate shares in 2015, then they would be worth the same today as they were then; this is not an index-beating stock. Simply put, chasing this yield probably won’t give you the long-term results that you’re after.

Keep your stay as short as possible

It’s deja vu all over again: Buying a stock at more than 300 times earnings with a 12% yield sounds good, right? Well, not so much.

American Hotel Income Properties REIT LP (TSX:HOT.UN) is by no means a low-risk investment, with a distribution that creeps lower over the years, a share count that grows ever larger, and earnings with no clear direction.

Want to buy some units and use the dividends to pay your utility bill? Consider burning small-denomination bills for heat — maybe you’ll even get a blue flame from a $5 note! Now that’s HOT (.UN)!

Awful jokes aside, this stock has performed poorly in the past and there’s no obvious turnaround in sight. Big monthly distributions don’t make this very narrowly profitable company appealing.

Superior, eh?

With a yield of nearly 6% and earnings per share that amount to around a couple of months worth of distributions, Superior Plus Corp. (TSX:SPB) isn’t a winner in my eyes.

Energy and chemicals haven’t been the place to be for the last while, and the company’s stock currently changes hands at roughly the same price as that of 2010. Notably, today’s shareholders collect a dividend of less than half of what it was at the beginning of the decade.

Could you do worse than invest in Superior Plus? Of course you could. But don’t be expecting outsized returns or a growing payout in the near future.

This year’s results seem comparable to those in 2012, when the company’s shares traded in much the same range as they do presently.

The post Can You Trust These 4 High-Yield Stocks? appeared first on The Motley Fool Canada.

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While other investment styles ascribe value to placing bets on increasing share prices, I much prefer to lock in yield and subsequently see my yield-on-cost ratchet up as time goes by.

Today I want to talk about five stocks that I own personally — and I’m more than happy to have put my money where my mouth is.

Why?

Well, these stocks will pay me more and more with every passing year.

The oligopoly

While a lack of competition in the Canadian telecom market has been burdensome for the consumer, Telus Corporation (NYSE:TU)(TSX:T) has been profiting wildly and demonstrating exemplary shareholder stewardship.

Here’s the thing: You can complain up and down about your cell phone bill or you can buy a couple of hundred Telus shares and have the company hand you back your cash on a quarterly basis.

With Telus, you get to collect a yield of nearly 5% while your payouts grow by a few percentage points every couple quarters.

What drove me to buy into this particular telecom?

I like Telus’s reputation for exceptional customer service and its dominant position in Western Canada.

The mega-merger

Not too long ago, Agrium and PotashCorp were each handsomely rewarding their shareholders with the proceeds of their respective crop nutrients businesses.

Nutrien Ltd. (NYSE:NTR)(TSX:NTR) has continued what its constituents began, leading 2019 with a dividend increase in excess of 7%.

Trading at a quite reasonable valuation and paying almost 4%, the company’s earnings more than cover the distribution and more cash should be on the way to faithful investors in the New Year.

Why bet on agriculture amid a trade war?

Nutrien is a long-term play on a growing global population and declining soil quality as a result of industrial farming practices.

The boring bank

Investors have leaped into the two largest banks in Canada, but there is seemingly less love for Bank of Montreal (NYSE:BMO)(TSX:BMO).

One mixed quarter does not unmake two centuries of good business, and BMO is here to stay.

Pundits proclaimed that low oil prices and troublesome property prices would burn Canadian banks, but they have continuously turned profits. I expect that the same will hold true with the next instance where the sky is allegedly falling.

Get a bit better than 4% on BMO shares and expect dividend growth that continually crushes inflation.

BMO is my pick among the banks because of its attractive valuation and its broad North American diversification.

Coming down the pipe

Between the Spectra Energy acquisition and a problematic regulatory environment, folks have unfairly thrown in the towel on Enbridge Inc. (NYSE:ENB)(TSX:ENB).

A 6% yield was once only possible from Enbridge Income Fund, now absorbed into the massive utility company worth almost $100 billion.

The company has been delivering annual dividend growth of about 10% for a while now, and another hike is due in early 2020.

Enbridge’s true value is not reflected in its share price, and I’m confident that investors will eventually come to their senses.

Transit’s green giant

If governments are going to get serious about climate change, then public transit is going to play an enormous part in that transition.

And who’s going to build those clean-running buses? NFI Group (TSX:NFI).

Who built the Toronto Transit Commission’s first all-electric bus? New Flyer Industries Inc.

Buy the shares up now while they’re on sale and secure a roughly 6% yield from a company with explosive earnings and double-digit annualized distribution growth.

NFI has heaps of upside and a bright future ahead of it. I’m more than happy to ride out some volatility while short-term struggles resolve themselves.

The post My Dividends Can’t Stop Growing appeared first on The Motley Fool Canada.

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Bears will be bears.

Fortunately, we can look past the short-term thinking that has driven these decisions and lock in amazing yields with companies that have sticky customer bases and established brands.

Let’s have a look at five stocks that will line your pockets with dividends and hopefully see some capital appreciation as folks come to their senses.

T-bones beat T-bonds

I’ve never eaten at The Keg – much to the amazement of seemingly everyone – so I can’t speak to the quality of the food, but I can say that the stock looks quite appealing.

Yielding over 6.5%, The Keg Royalty Income Fund (TSX:KEG.UN) pays you monthly and has a history of occasional special dividends.

It’s also easy to like the stock’s low volatility, with a beta of around 0.6, and its reasonable valuation at only 11 times earnings.

Root beer bucks

Between frosty mugs of soda and quaintly-named hamburgers, A&W has all of the nostalgic traits that are sure to lure even the most jaded millennial.

Thing is, A&W Revenue Royalties Income Fund (TSX:AW.UN) is here to stay and has been steadily increasing its distribution since 2017 – over 15% in two years, yes please.

But wait, there’s more: A&W has strong same store sales growth and is continuously growing its royalty pool.

In short, more distributable cash is on its way and unitholders are due for another raise.

From Edmonton with love

Edmonton, AB, 1964 – Boston Pizza and Spaghetti House was born.

Wait, what?

The origins of Boston Pizza Royalties Income Fund (TSX:BPF.UN) are a bit surprising, but customers have kept coming back for over half a century.

Today, shares of the fund will pay you monthly distributions that work out to about 8% annually.

While BP may not be on the same growth trajectory as the companies that we have hitherto discussed, it possesses a margin of safety due to the fact that it only trades about 35% above its book value.

Fresh out of the oven

Depending on where you live in this fine country, either Pizza Pizza or Pizza 73 are household names.

Love it or hate it, Pizza Pizza Royalty Corp. (TSX:PZA) has franchises that are quick, inexpensive, and cemented in our minds.

With a yield of over 8%, the stock pays you well – and monthly – all while trading below book value and at little over 11 times earnings.

If Pizza Pizza’s latest earnings are any indication, the gradual decline in sales may be over and the company might be poised for a return to growth.

A sprinkle of diversification

Believe it or not, Jack Astor’s, Scaddabush, Reds, Canyon Creek, Abbey’s Bakehouse, Duke’s, and the Loose Moose all fall under one banner.

SIR Royalty Income Fund (TSX:SRV.UN) has a portfolio of restaurants that have recently been cooking up a dividend growth rate of about 5% per year.

Trading at around 10 times earnings and yielding a mighty 9%, SIR is serving investors a heap of value with generous side of income.

The post Craving Income? 5 Foodie Funds to Buy appeared first on The Motley Fool Canada.

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Sometimes, however, even high-quality businesses undergo slumps that undo much of the appreciation in the value of their shares.

If you missed out on these three stocks before the last rally, then here is your opportunity to reverse the clock to 2014, or earlier, and ride these stocks back to their previous highs.

Fear not, dear investor, if you own shares in the companies that we will be discussing today — these stocks all have moat-like characteristics that will ultimately see them return to their former glory.

Turn your cellphones off and enjoy the show

Cineplex (TSX:CGX) hovered around its current price from 2011 to 2012.

Formerly a market darling, the media company peaked in 2017 at around twice today’s price.

Broadly speaking, Cineplex has been down in the dumps because there simply haven’t been enough box-office hits.

Compare the films of an explosive year such as 2015 to last year’s and it becomes evident that we have recently been through a drought of blockbusters.

But 2019 is different.

Avengers: Endgame’s wild success is only the beginning of a year full of highly anticipated sequels and Disney remakes.

Looking at the numbers from Q1, all of the pieces are in place: Cineplex has nearly 10 million SCENE members; box-office revenue per patron is on the rise; and, concession revenue per patron is increasing.

While waiting for the company to turn the ship around, you get to collect a dividend that now yields over 7%.

UberEats yourself a bag of popcorn and watch the monthly income roll in.

Save up for a chalet in the Laurentians

Laurentian Bank (TSX:LB) has bounced back from a horrendous end to 2018, but remains roughly as cheap as it was when it hit lows in 2013 and 2016.

Between last year’s mortgage loan review issues and an ongoing restructuring that has most recently seen the elimination of bank tellers, investor confidence in the bank has been iffy at best.

All of the aforementioned noise has left Laurentian trading below book value, at about 10 times earnings, and with a nearly 6% yield.

Add to the equation that earnings are steadily growing and that the dividend has consistently added a couple pennies per year, and it isn’t hard to see the bank gradually grinding back toward previous highs.

Cheers to amazing value

Molson Coors Canada (NYSE:TAP)(TSX:TPX.B) is on sale at 2014 prices, which is around half of the highs that the stock hit in 2016.

Investors seem convinced that marijuana legalization will fundamentally disrupt the alcohol industry.

Here’s the thing: Molson already has a deal in place with Hexo Corp. to produce cannabis beverages when the market permits.

Further, North Americans consumed more than 25 billion litres of beer in 2016; it would take a whole lot of marijuana converts to significantly change the enormous beverage industry that is currently in place.

Right now you can pick up Molson shares slightly below book and at only 12 times earnings. The company’s dividend is growing and yields almost 4%.

The post 3 Stocks Now Cheaper Than They Were in 2014 appeared first on The Motley Fool Canada.

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The sales pitch was all about the amount of the hot commodity that any given company could produce. Broadly speaking, margins were strong and investors were buying stocks based on how quickly companies could get oil out of the ground.

When the party was over, however, it turned out that it wasn’t all about quantity — it was about costs. Disciplined energy companies that pursued projects with the best economics are still alive and well today.

Unfortunately, producers that succumbed to exuberance paid the price. Often laden with debt and running a loss on every barrel, companies took write-downs on reserves that had become worthless and many closed their doors entirely.

But, you might well ask, what does this have to do with marijuana stocks?

Surely demand for cannabis must continue to outstrip supply, supporting market prices?

Surely margins are outstanding and weed companies should soon be rolling in profits?

Well, maybe not.

In the interest of making the connection between the two themes I’m discussing, we will use Canopy Growth (NYSE:CGC)(TSX: WEED) purely illustratively.

The emphasis on capacity

Open up the management’s discussion and analysis documents for pretty much any weed company’s latest quarter and a few things are going to repeat themselves again and again: expansion, production, capacity, and heaps of figures about greenhouse square footage.

It’s déjà vu all over again.

Several short years ago we were reading nearly identical documents talking about ramping up production of barrels of oil equivalent per day, newly purchased hectares of land, and probable reserves.

When I read speculative numbers about supply and very little mention of material sales, it gives me the goodwill and intangibles chills; it makes me wonder whether it will all go up in smoke.

Consider the following sentence about the value of their inventory in Canopy’s report for the year-ended March 31, 2019: “Because there is no actively traded commodity market for [cannabis] plants or dried product, the valuation of these biological assets is obtained using valuation techniques where the inputs are based upon unobservable market data”.

To me that reads like somebody just handed himself or herself a degree in creative accounting.

Show me the margins

Your local drug dealer wouldn’t sell marijuana if it weren’t profitable. Period.

Conversely, weed companies have been continuously selling their investors on the notion that the next variation on their product will be the one that makes it all worthwhile.

First, there was the promise of making big bucks from Health Canada and medicinal marijuana.

Next, the dough was going to come from recreational dried plant.

Hold on, CBD is where the ball really gets rolling.

Don’t worry: money-maker edibles will be legal in the fall.

What’s next, folks?

Year over year, Canopy’s fourth-quarter overall average sale price fell around 11% to about $7.49 a gram. Further, the decline in the fair value of its biological assets amounted to just over $77 million in Q4 alone.

Gross margin before fair value impacts in cost of sales – what a mouthful – is a non-IFRS accounting measure for a reason.

The teachings of black gold

All of the above is to say that commodities, be it oil, gold, or weed, fluctuate in value and tend to go through periods of intense investor interest.

The problem, then, is finding disciplined producers that can keep costs under control and focus upon sustainably increasing shareholder value over the long run.

When doing your research on marijuana stocks, don’t forget the lessons that we learned from oil.

The post Pricey Weed Stocks: A Lesson From Cheap Oil appeared first on The Motley Fool Canada.

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With these two important metrics in mind, let’s examine five high-quality stocks that fullfil both of the aforementioned requirements.

Acadian Timber Corp (TSX:ADN)

Managed by a wholly-owned subsidiary of Brookfield Asset Management, Acadian is a leading timberland operator in New Brunswick and Maine.

As far as value, the company trades slightly below book value at a compelling price-to-earnings multiple of around nine. Acadian has a bit more than 10% of its market capitalization in cash and cash equivalents on its balance sheet.

In 2018, the company returned $1.1225 per share in dividends to shareholders, up a couple of cents over the previous year, and representing a payout ratio of 106%. Over the long term, Acadian has stated that it intends to aim for a payout ratio of 95%.

At its current price, Acadian yields just about 7%.

Gamehost Inc. (TSX:GH)

As Alberta emerges from the painful recession brought on by the collapse in the price of oil, Gamehost’s geographically concentrated hospitality and gaming business looks increasingly attractive. Further, while the company weathered the storm of the oil shock it focused upon cost cutting, which will enhance its profitability going forward.

Gamehost has somewhat of a moat due to the highly regulated nature of its business and the Alberta Gaming, Liquor and Cannabis Commission’s current moratorium on new casino licenses.

Trading at a price-to-earnings multiple of almost 15 and at around two times book value at writing, Gamehost is attractively valued. The company pays a monthly dividend of $0.058, which works out to an annualized yield of roughly 7%.

Chorus Aviation Inc. (TSX:CHR)

Chorus is a holding company with subsidiaries that operate in regional aviation, specialized aviation services, and aircraft leasing. Most investors will recognize the company’s Jazz brand, which operates regional passenger service on behalf of Air Canada.

Diversifying from its core business with Air Canada is Chorus’s key avenue for growth. As of the end of the first quarter, the company had a fleet of over 90 leased aircraft with a net value of about US$1.6 billion. SpiceJet, an air travel company operating out of India, is among Chorus’s newest aircraft leasing customers.

Trading at a price-to-earnings multiple of about 11 and nearly two times book value, Chorus has appealing value. Additionally, the stock’s monthly dividend of $0.04 gives it a hefty yield of almost 6.5%.

Wajax Corp (TSX:WJX)

Industrial parts and service is Wajax’s core business, delivering to a variety of sectors including energy, food and beverage, forestry, and mining. Currently, the company is sitting on an order backlog of over $250 million.

Revenue in the first quarter increased nigh on 10% year over year primarily due to sales gains in eastern Canada driven by an acquisition in 2018. Wajax’s ongoing growth and diversification has the added appeal of lessening its exposure to the volatility of western Canada’s energy sector.

Wajax shares are sitting close to their 52-week low and trade right around book value. The company’s quarterly dividend of $0.25 makes for an attractive yield close to 6.5%.

Laurentian Bank of Canada (TSX:LB)

Laurentian is currently the TSX index’s value bank, as it trades at a discount to book and only nine times earnings at writing. Some critics have called the bank a value trap, but I think that they might be missing the mark.

With a market capitalization of below $2 billion, Laurentian is a relatively small bank, which means that it experiences the volatility of a mid-cap stock rather than the consistency of a large cap. Various short-term issues aside, it’s hard to overlook the fact that Laurentian hasn’t been this cheap in nearly a decade.

Investors who take a chance on Laurentian will be rewarded with a yield of over 6% — one that’s unmatched by its peers.

The post 5 Value Stocks That Pay Over 6% appeared first on The Motley Fool Canada.

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It just so happens that real estate investment trusts, or REITs, allow investors to benefit from the lucrative world of property ownership without the headaches of doing it themselves. Also, as we will explore in this article, REIT investors can collect huge monthly income from these high-yielding stocks while still having the opportunity for capital appreciation.

From highest to lowest yield, here are seven hot REITs with yields over 7%.

Invesque (TSX:IVQ.U)

Healthcare real estate promises to be an enormously lucrative investment as the population ages, and Invesque is uniquely positioned to take advantage of this trend. The company currently operates 100 properties with a total value of around US$1.4 billion.

Trading at a discount to book value and offering a yield of nearly 10.5%, Invesque is the highest-yielding stock of the group.

Slate Retail REIT (TSX:SRT.UN)

100% of Slate’s shopping centres are located in the United States and they are all anchored by grocery stores. With 85 properties valued at roughly US$1.3 billion, the company is geographically diversified and has an occupancy rate of about 95%.

Slate has a forward price-to-earnings multiple of around seven and offers a tantalizing yield of almost 9%.

True North Commercial REIT (TSX:TNT.UN)

With an emphasis on government and credit-rated tenants, True North is an office REIT that strives to build a rock-solid tenant base with minimal turnover. The company’s 46 properties boast an impressive 97% occupancy rate and have a combined value of close to $1 billion.

True North trades at just about book value, with a price-to-earnings multiple of approximately eight and a generous yield of around 8.9%.

BTB REIT (TSX:BTB.UN)

Just about evenly diversified across office, retail, and industrial asset types, BTB is a Quebec-weighted REIT with close to 75% of its leasable square footage located in the province. The company has around 75 properties in total with a total asset value of about $800 million.

BTB trades at a slight discount to book value and only six times earnings, all while offering a superb yield of nigh on 8.7%.

Inovalis REIT (TSX:INO.UN)

Investors who wish to diversify away from North American real estate can do so with Inovalis, which is focused on property in Germany and the Greater Paris Region. Externally managed by Inovalis SA, the company benefits from the real estate and financial expertise of a much larger operator with nearly $10 billion in assets under management.

Inovalis yields not far from 8.1% and has attractive valuation metrics, trading at a price-to-earnings multiple of about 11 and a price-to-book ratio of around 0.8.

Morguard REIT (TSX:MRT.UN)

With a $3 billion real estate portfolio of 49 properties, Morguard REIT is largely focused on office properties and regional shopping malls.

The company trades at only half of its book value and a price-to-earnings multiple of about 10. Morguard REIT yields a little more than 7.7%.

Automotive Properties REIT (TSX:APR.UN)

Consolidating auto dealership properties is the mission of APR, which went public in 2015. The company’s 55 properties are diversified across various Canadian provinces and add up to a value of over $750 million.

APR is the lowest-yielding REIT of the group but still delivers an impressive 7.5%, all while trading at an earnings multiple of around nine.

The post 7 Hot REITs With Yields Over 7% appeared first on The Motley Fool Canada.

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Fast-forward to the present day and these troubles seem far behind us, yet NAFTA anxieties have left their mark on several stocks, thereby creating a number of intriguing opportunities.

Let’s take a look at how you can play your very own Trump card and profit from a handful of undervalued stocks that are due to re-rate in the near future.

Shipping and Logistics

Most directly affected by trade rhetoric were companies that dealt in the movement of goods between Canada and the U.S. In this segment we will examine Algoma Central Corp. (TSX:ALC) and Logistec Corp. (TSX:LGT.A).

Small-cap Algoma operates shipping vessels that move dry and liquid materials throughout the Great Lakes. Increasingly, however, the company’s business is diversifying to include short-sea and cement carrier segments which have meaningfully contributed to revenues.

Algoma sports a growing dividend and steadily improving free cash flow. Trading around 10% above its 52-week low and with attractive valuation metrics, investors in the company get a healthy balance of growth and value with a 3% dividend, to boot.

Logistec’s business, by contrast, is concentrated in cargo handling facilities and environmental services. In 2018, the company made a couple of strategic acquisitions, which focused upon expanding its footprint in the U.S. Gulf Coast.

Also trading around 10% above its 52-week low, Logistec remains significantly more expensive on a relative basis than Algoma, as it is priced for stronger growth. Investors willing to pay a premium for the company’s future potential will collect a yield of a little less than 1% in the meantime.

Automotive parts and suppliers

The auto industry in North America is highly integrated, as parts routinely move across the border for assembly into finished products. The two companies that we will investigate here are heavyweight Magna International Inc. (TSX:MG) (NYSE:MGA) and lesser-known Exco Technologies Ltd. (TSX:XTC).

When it comes to auto parts, $20-billion Magna is impossible to ignore. Geographically speaking, approximately half of the company’s business relies upon North America and trade tension in its largest market weighed on the stock.

Now, Magna trades around 10% above its 52-week low at a price-to-earnings multiple of about 7 and a price-to-book ratio of nearly 1.5. With a consistently growing yield of roughly 3% and superb fundamentals, the company’s shares deserve a second look.

Exco, on the other hand, is a small-cap manufacturer for the die-cast, extrusion, and auto markets. Like Magna, a large portion of the company’s business relies upon industries in the North America.

In terms of valuation, Exco checks the same boxes as Magna, trading at inexpensive multiples and close to its 52-week low. The company offers dividend growth and currently yields almost 4%.

Bottom line

The aforementioned stocks have had their prices negatively affected by a series of circumstances that have largely resolved themselves at this point.

While cyclicality remains a concern in the sectors in which the companies discussed operate, these stocks have strong fundamentals and offer an attractive mix of growth, value, and income at their current valuations.

It might just be time to play your Trump card.

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Another notable cut took place in December when AltaGas chopped its dividend by more than 50%. At the time, the stock’s yield reached into the mid-teens and its payout ratio was far in excess of 100%.

Dividend cuts are the worst nightmare of income investors and can hammer share prices. Conversely, as in the case of AltaGas, removing an unsustainable payout can lift a stock and place it on a trajectory toward renewed success.

Let’s take a look at a few stocks that I think might cut their dividends in 2019. Further, we will take a look at how such cuts may impact their respective stocks.

Akita Drilling (TSX:AKT.A)

Akita, a contractor in the oil and gas industry, has been struggling with profitability since 2015. Meanwhile, the company has not cut its generous payout, which now represents a yield of more than 9%.

Trading at around $8 one year ago, Akita’s share price has been in continuous decline and now sits below $4.

It is hard to gauge to what extent the distribution has cushioned Akita’s fall, but I can’t imagine that many investors expect the company to maintain the current dividend with no earnings and little prospect of an oil recovery in sight.

Maxar Technologies (TSX:MAXR)(NYSE:MAXR)

Formerly MacDonald, Dettwiler and Associates, Maxar is a once high-flying aerospace company that has now come crashing down to Earth. With the precipitous decline of the value of its stock, Maxar’s yield has shot above 20%.

Those following the company might recall Spruce Point Capital’s scathing report in August, which criticised Maxar’s accounting practices and recommended the total elimination of its dividend.

In a sense, a dividend cut from Maxar would all but confirm Spruce Point’s suspicions about the quality of the company and would potentially have a negative impact on the stock. That said, much of that pessimism has already been reflected in the price of Maxar’s stock, so there may not be much downside left.

Ensign Energy Services (TSX:ESI)

Like Akita, Ensign has suffered as a result of weakness in the price of oil. The company currently runs a loss with revenue that is less than half of what it was in 2014.

At its current dividend rate, Ensign pays over 9%. To avoid further erosion of its book value, the company would do well to trim its dividend to preserve capital while commodity prices remain depressed.

Investors can expect the same result as we saw in December, when Cardinal Energy announced its dividend adjustment; the stock took a beating. Long term, however, removing the burden of onerous payments to shareholders will give the company more financial flexibility going forward.

The moral of the story

As 2018 demonstrated, with great yields comes great uncertainty. For 2019, keep in mind that not all dividends are created equal and some can even vanish into thin air.

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But 2019 need not be another year of complacency; with a new year comes a fresh opportunity to clean up your portfolio! A little decluttering and a touch of minimalism can refocus your investments, so they are more purposeful and less stressful to manage going forward.

Here are five ways to tidy up your portfolio for 2019.

1. One account to rule them all

The average Canadian had 1.4 TFSAs in 2016, which is likely 0.4 more than anyone really needs. Consider merging multiple RRSP, RESP, or taxable investment accounts, where additional accounts don’t have a clear reason for being differentiated.

There are a number of reasons why this simple approach is useful. First, fewer statements — that means less math, less paper, and fewer emails. Second, a clearer picture of what each type of account is attempting to achieve, be it growth, income, or tax effectiveness. Lastly, the ease of having everything all in one place cannot be overstated when looking at allocation, performance, and more.

2. Spring cleaning in the winter

35 random shares of stock “XYZ” kicking around? Have a couple holdings that have done nothing and gone nowhere for far too long? Can’t bring yourself to unload that stinker that you’ve been hoping will one day rebound?

Maybe it’s time to clean house.

As much as we want to divorce emotion from our investing decisions, there’s a lot of relief that can come from finally moving past previous investments and saying a last goodbye.

Getting rid of some low-quality underperformers and small positions that will never make a material difference can go a long way toward freeing up some cash and beginning again on a hopeful trajectory.

3. Don’t ditch those mutual funds (or maybe find comparable ETFs)

Cutting fees and costs has been a major trend in investing as of late, perhaps to the detriment of many investors who got along perfectly well owning basic balanced funds.

There is a lot to be said for having a straightforward instant portfolio that does it all, from fixed income to equities. So much so, in fact, that Vanguard has launched three ETFs in Canada that combine old-school mutual fund simplicity with new ultra-low cost appeal.

Vanguard’s Balanced Portfolio (TSX:VBAL), Conservative Portfolio (TSX:VCNS), and Growth Portfolio (TSX:VGRO), each offer a one-stop shop for investors who don’t want the hassle of many discrete holdings.

At the same time, those who use the aforementioned type of product in their portfolio always have the option of having additional positions to tailor their investments to suit their goals.

4. Stop hoarding all the bank stocks

If you own more than a couple of the Big Six Canadian bank stocks, then you should consider taking a look at a long-term performance chart. Simply put, most of the banks tend to perform in line with one another, so holding them all doesn’t really make much of a difference.

Absolutely dead-set on having a smattering of Canadian banks? Consider switching to a sector allocation ETF such as Bank of Montreal’s Equal Weight Banks Index (TSX:ZEB), so you can have a single holding that lets you have a bit of all the banks while also avoiding the headache of re-balancing.

5. Bundling basics

Banks aren’t the only area where folks tend to add redundant stocks — a trap that doesn’t aid diversification and can quickly add confusion.

Again, using BMO’s ETFs as an example, there are a plethora of sector-focused funds such as the BMO Equal Weight REITs Index (TSX:ZRE) and more for industrials, oil and gas, and utilities. In each case, these sorts of products can be used to take a bunch of smaller holdings and combine them into one position.

When evaluating these products, you can take a look at their holdings and compare them to your own portfolio. Oftentimes you will find overlap and sometimes even names that you were considering buying.

Conclusion

Don’t conflate complexity with quality; simple portfolios can perform just as well as their more elaborate counterparts. Tidying up your holdings can help make your investments align more closely with your objectives for the coming year.

Here’s to a minimalist and profitable 2019!

The post 5 Ways to Declutter Your Portfolio for a Minimalist 2019 appeared first on The Motley Fool Canada.

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