Logo The Connolly Report (about dividend growth common stocks) has been published since 1981 by Thomas. P. Connolly, B.Com ('64). The ideas about the strategy are on-line now inside dividendgrowth.ca It is blog of a few pages a month plus links, special one page White Paper summaries now and then, and a lot of dividend growth data. The entire Graham data and explanations mentioned in Rob Carrick's July 2020 column is there too. This blog will continue into 2024 and hopefully beyond. Access is $50. This is a one time fee. Some ten years of blog, reports and dividend data are inside. You are paying for this and the strategy developed over forty two years of research and practice.

Becoming a subscriber for $50 ( a one time fee) provindes you access to over 40 years of research. dividendgrowth.ca will, most likely, remain open well into 2025. There will be the usual big CAGR dividend (year-by- year and price. data sheet in December 2024 (preliminary data this September). This was mentioned in Rob Carrick’s Saturday August 19, 2023 column.

To hook you up for access our daughter Denise needs:

New access at $50 is handled by Denise):

Denise Emanuel

475 Scarborough Road

Toronto, ON M4E 3N3

denise@dividendgrowth.ca

E-transfers are handled by Denise

The strategy of dividend growth investing will progressively earn you a higher than market returns, in the area of 12% eventually, when properly executed. A lot depends upon the kind of person you are. A patient, disciplined person will succeed. If you seek promises of instant success, high yields and a list of stock recommendations, to put it bluntly, go somewhere else. We provide ideas and data: you decide. I follow the principles of the old masters: John M. Keynes, Ben Graham, Arnold Bernhard, Philip Fisher, Stephen Jarislowsky and Warren Buffett. Modern portfolio theory is rejected. We do not mention beta. Risk is not volatility and can't be diversified away. As intrinsic value grows, equities become less risky than bonds. In the main, dividend growth drives capital growth. ♣ Our most recent data sheet has some 30 dividend growth stocks with year-by-year dividend data for the last decade, plus price in 2011 and 2021 and CAGR of both dividends and price, much like Rob Carrick's column, as evidence that as the dividend grows, so does the price. This is the secret of what we do: it is a double double. Income goes up, capital grows too.

Tom Connolly's address:

Tom e-mail: connolly@kingston.net

E-transfers are arranged by e-mail with Denise also.

(If you would still prefer to pay by cheque be sure to include your e-mail address so we can set up your access and notify you with an automated e-mail when access is set up. Cheques payable to Denise Emanuel.)

White Page topics inside dividendgrowth.ca:

Many yield charts inside this site go back into the 1980s. Low yields signal expensiveness. 

♦ Which stocks do we select? The companies with at least a decade of steadily growing earnings and dividends. An initial yield of 4% or so, remember, plus dividend growth of 5% or so (the average of our lists) builds us to 12% . . . eventually. As best you can, forget about fluctuating prices. Realize your income and capital are growing behind the current turmoil.

DIVIDEND GROWTH INVESTING:

We do not want professional management of our money. Why not? ▪ Professionals are indoctrinated by modern portfolio theory 2. ▪ Professionals are constrained by benchmarks: they cannot lag their peers. “ The measuring rod itself often causes trouble” Economist May 5 2018 ▪ Professionals are too active - “Trading is Hazardous to your Wealth” ▪ Professionals are short-term oriented. Value is in future cash flow. There’s client pressure – For instance, why don't I have more FAANGS in my portfolio? ▪ Professionals have way too many securities in their portfolios. * ▪ Professionals buy at the wrong time (W. Buffett’s Forbes column, Aug 6 1979) The efficient market [hypothesis] isn't always…just usually. It's a big mistake. ▪ Professionals focus and measure too much on price. We want cash flow in retirement. ▪ Professionals lean toward equal weighting rather than owning more of the best firms. * Most professionals do not beat the market.

Some Mentions in the Press since 1981 (other than Rob Carrick's Report on Business columns in 2015, 2016, 2017 and 2018)

The information and opinions on this site must not be considered investment advice. The information is intended to be for educational purposes. I used to teach Business. I never was, nor ever will be, an investment advisor. No particular security or investment product is recommended or has ever been recommended. I supply some data, you blend this with information from other trusted sources, then you make the decisions. Opinions can change without notice. Opinions offered here can never be a substitution for independent analysis and due diligence. This site may contain forward-looking statements. Your guess as the future value of any security is as good as mine. Forecasting is dangerous enterprise. There are risks involved with investing. As Peter L. Bernstein says in Against the Gods, “Investors must expect to lose occasionally on the risk they take. Any other assumption would be foolish.” p. 284

Copies of the Connolly Report were available at the Cobourg Public Library, the main North York Public Library on Yonge Street (way up in what I used to call Willowdale, before highway 401 went in…I grew up in Lawrence Park (north Toronto) and started my education at Blythwood Public School, the West Vancouver library on Marine Drive, the Guelph library and The National Library of Canada

My retirement plan is very simple. When they are sensibly priced, I buy common stocks of companies which have a good record of increasing dividend payments and hold them and hold them for the rising income.

Can you think of a better retirement asset? Growing income. And no MER. And no maintenance or maturity date. I don't understand why people switch to bonds in retirement. Have you ever known a bond to increase its interest rate? I don't buy bonds, or G.I.C.s. I seek to produce consistent returns from individual dividend-paying common stocks rather than risk the chance of stellar gains that might come with go-go stocks.

Here's one more example I just computed as the Bank of Montreal announced a second dividend increase for 2004 as I key this in early September 2004. Our BMO dividend goes up to .44 a quarter in November 2004 ($1.86 a year). In February 2004 our payment was .35 That is a 25% increase in one year. The yield on our $5.78 price in 1985 is now 30% (1.76/5.78). The price of BMO has more than quadrupled too. We paid $9,250 for 400 shares in 1985: with two, two for one, stock splits in 1993 and again in 2001, we now have 1600 shares valued at $86,400. We are not selling: we are holding for the 30% yield and future dividend increases. Here's another example. In 2005, Fortis shares split 4:1. We originally bought our first 500 Fortis shares in March of 1995 at $24.62 a share…some $12,300 in total. In the fall of 2005, ten years later (you have to be patient with this strategy), Fortis mailed us our new 1,500 share certificate (the 4:1 split). In total we now have 2,000 shares of Fortis. As I key this the price of FTS is close to $25…about what we paid for our 500 shares originally. Now our 2,000 shares are worth $25 times 2000 = $50,000. That's not all. In early 1996, I thought Fortis was still a good buy, so we added to our position with another 500 shares. They too are valued at $50,000. So, we have $100,000 in Fortis…just one stock in a portfolio of some 10 stocks. All, but one, have done the much same thing. We're not selling. This investment yields 9.4%. Work it out. Fortis' dividend after the split is 64¢ a share. We have 4000 shares now. Our annual income from the Fortis shares is 4000 times .64 = $ 2,560. That's about what we paid for our original 500 shares. In 2006, if Fortis increases its dividend again, and I expect it will (in 2005 the dividend increase was 12.5%) our income will go up too. Can you think of a better retirement asset?

Financial planners (now calling themselves wealth managers) because they know little about stocks, sell most people mutual funds or ETFs (high commissions). Then, when retirement comes, they recommend withdraws from the funds of 4% or 5% each year. Mutual funds are not noted for providing growing income, so retirees often begin eating into capital right away. When the market collapses, as it did in 2008, retirees worry they will not have sufficient capital to fund retirement. I have no such worry. The dividend growth strategy does not depend upon capital appreciation. It counts on dividend growth. The common stocks I own begin with higher yields and, with annual dividend increases, as the examples above illustrate, the yields grow. When it comes to retirement, I live from the income. I don't need to count on the capital gains. Appreciation of the stock price, however, will occur, eventually, as the dividends increase. These gains are my retirement bonus…the extra trip each year or helping the kids with their mortgage payments. How dependable are the dividends, you ask? Well, I only buy stocks of companies which have solid earnings, electrical utilities, pipelines, banks, and food retailers mostly. And further, I want companies which have paid dividends for a least a decade, preferably more: 20 years is a good standard. Dividends are surer than capital gains. The idea of growing income is so simple. I don't understand why more folks don't do it. Think about these ideas.

Increasing income is the key. Say you are 50. Assume further that you buy a common stock with a 5% yield and that over the next few decades the dividend grows at 4% a year. By the time you are 69, you could be getting over 12% on your money. Consider this too: if the common stock with the growing income is in your RRIF, you might not ever have to touch the original capital in your RRIF. Whether the market goes up or down in the short term is irrelevant. The growing dividends can supply a good portion of your retirement income and, in most cases, your capital grows along with the dividend. I've been retired twenty four years and withdrawing from my RRIF for eleven years. Not only is my original capital still intact, it has more doubled. The 4% maximum withdrawal rule, often touted by planners, does not apply provided you set up your dividend growth strategy well before retirement. Think closer to a 5% figure. Some sixty Canadian companies increase their dividends each year: learn which companies, understand dividends, discover the ramifications of dividend increases. Dividend-paying common stocks are safer. Some companies have had double digit dividend growth for years. You'll be delighted when you discover the essence of the dividend growth investing strategy. Some more information on this retirement strategy will be available at dividendgrowth.ca from time to time. Here's why you have to get out of mutual funds, not be put into ETFs and learn to invest on your own. “Between 1984 and 2002, the stock market index made returns of 12.2 per cent a year. The average mutual fund investor made 2.6 per cent.” Hard to believe, eh! Margaret Wente, Globe and Mail p.A23 December 11, 2003