How To Research Stocks

How I Analyze My Stock Picks

  When I go looking for companies in which to purchase shares in I start out by compiling a list of stocks which I am interested in and try to balance them within my portfolio's sector weighting.  Once I have selected a Watchlist of company's I look at a few key pieces of financial information. All of which are readily available either on the company's website, or Google Finance, your brokerages research tools and/or additional sources of financial information. 

Recent Dividend Increases

   Over the past few months a few of the companies that I follow and hold have raised their dividends. I am as always very happy to be the beneficiary of these free 'raises' for holding the stocks.

The following stocks raised their dividends: PPL, AQN, PZA, MFC

Recent Dividend Increases

   In the past month quite a few of the companies that I hold, as well as a couple comparable sector companies have raised their dividends. And as more companies release their earnings I am looking forward to seeing some more dividend increases in the near future. The following companies in my portfolio gave me a raise in the last month: Toronto Dominion Bank (TD), National Bank of Canada (NA), Royal Bank of Canada (RY) and BCE (Bell Media). As well as Canadian Imperial Bank of Commerce (CM) and Rogers Communications (RCI.B).

My 2014 Investing Review and 2015 Goals

     2014 has marked my first full year of investing directly in stocks and collecting dividends. Throughout the year, and a couple months in 2013 I have slowly been building up my dividend stock portfolio. By adding in just small increments, generally between $200-800 a month I have managed to create a portfolio that churns out an estimated $610 a year, or averaged out to $51 a month! In some months, my little accumulation of dividend income has boosted my overall income by up to 4% and could if needed be able to cover a couple reoccurring expenses, or a trip to the grocery store.

The TFSA and Why I Use It

    The Tax Free Savings Account (TFSA) is a relatively new form of registered account for Canadian's to utilize for investing and tax minimization purposes. Made available at the start of 2009, the TFSA allows eligible Canadian residents (18+) to invest their hard earned money tax free! Well, mostly anyways as there are some rules and qualifications to look out for.
    Some quick stats on the TFSA:

The Good Stuff:
- No taxes upon withdrawal of funds.
- No taxes on eligible dividends.
- No taxes on eligible capital gains.
- Cumulative contribution room.
- Once money is withdrawn, contribution room is returned the next year.
- For retirees, money withdrawn does not count against OAS calculations.

The Tricky Stuff:
- Accidentally holding non-eligible investments erases the benefit of the account(Ex. U.S. Stocks).
- Going over the contribution limit means a penalty of 1% of the value over-contributed per month.
- Finding out if a particular investment is eligible or not is not always simple.

Brokerage Review: Scotia iTrade vs. Questrade

    So in this post I will be comparing the Bank of Nova Scotia's trading platform: Scotia iTrade and Questrade's trading platform IQ and IQ Essential. Before I started out investing on my own, the first thing I had to do was figure out, where am I going to do that? So initially I took a look around all the common places(for Canadians anyways) like the big banks: Scotia, TD, Royal Bank, BMO, CIBC. This was around the same time I first started looking for, finding and following investing blogs while researching for brokerage information; you can checkout my blogroll for those helpful sites!

Brief on Analyzing Stocks

    When I go looking for companies in which to purchase shares in I start out by compiling a list of stocks which I am interested in and try to balance them within my portfolio's sector weighting.  Once I'v selected a watchlist of company's I look at a few key pieces of financial information which are readily available either on the company's website, or by simply using Google Finance which has financial information on each company readily available, just search the companies name or its stock ticker. Google Finance also provides access to summarized company Income Statements, Balance Sheets and statement of Cash Flow; however for full detail statement with notes you will need to get that information from the company website if publicly available.

Key Information that I look for are: Ranges, Volume, Market Cap, P/E, Dividends, EPS, Inst. Owned and Financial Statements. Here's my brief breakdown of each:

Next Buy Watchlist: Sept. 2014

    So in August I wasn't able to make any new investments, but this month I will be making an investment and so I have a few companies I am keeping my eye on. Last time I bought more shares of Toronto Dominion Bank (TD), which I am quite happy about since its gone from $55.50 to $57.48 today. Although that does mean it will be more expensive to buy more shares of it in the future.

    For the moment I want to further diversify my holdings and not add to any current positions so my watchlist will not have any of my current holdings; although if a very good opportunity occurs then I might add to a current position. The main one I would be looking to add to is AQN with the aim of having enough shares to DRIP two shares a quarter, as I really like this renewable energy company.

    So my current watchlist includes: Suncor, Manulife, Roger's and REITs

Market Turmoil

    Looks like the markets are getting a little bit shaky today. The S&P/TSX  went down 194.08 points, or 1.25%. The US S&P 500 fared even worse, losing 39.4 points, or 2%. Personally my portfolio dropped 1%, based mostly on Energy and Finances, Veresen (VSN) alone made up ~.05% of my losses today. The market appeared to be shaken from the announcement that Argentina has defaulted on its debt as it attempts to broker a deal to restructure its debts. There is also the ongoing instability in Europe as the Russia/Ukraine, and Israel/Palestine/Hamas conflict continues with fears of escalation in the area that will continue to negatively affect the broader Eurozone.
  

Next Buy Watchlist

    So I'v been able to save up a bit more money to buy a few more shares of a high quality company. I have narrowed down the list of companies but I'm still undecided. Currently based on my portfolio sector weightings of the type of companies I want to be invested in at the moment, I am looking for either Financial or Telecommunication companies.