Tag Archives: NASDAQ:CMCSA

How to Create a Passive Income Portfolio

To create a passive income portfolio, you can invest in bonds or stocks that generate interest or dividend income without you having to lift a finger. I prefer to invest in stocks which have outperformed bonds in the long run.

I also like the concept of investing in stocks because I’m owning stakes in businesses and benefiting from their profits (although I also take on their risks). This is markedly different from purchasing bonds for which you’re lending your money to governments or corporations for interests in return.

In fact, dividend investing is my favorite way to generate passive income. There are so many safe dividend stocks to choose from. Even in a booming stock market like today, you can still find quality businesses at good valuations.

Here’s how to create a passive dividend income portfolio:

  • Buy stocks that offer safe dividends at good valuations
  • Diversify but don’t di-worsify
  • Aim for a low-maintenance portfolio that’s replicable, scalable, and can be largely automated
grow a money tree

Buy stocks that offer safe dividends

The U.S. and Canadian stock markets offer yields of 1.8% and 2.8%, respectively. There are plenty of safe dividend stocks that offer higher yields of about 3-6%.

However, typically, the higher the yield of a stock, the slower its dividend growth will be. (Sometimes, high yielders don’t increase their dividends.) Similarly, low yield stocks tend to increase their dividends faster. Typically, dividend growth stocks are safer and better than stocks that simply maintain their dividends.

Buy stocks at good valuations to protect your invested capital and maximize your gains.

Here are a few examples.

A high yield example

NorthWest Healthcare Properties REIT (TSX:NWH.UN) owns a high quality portfolio of medical office buildings and hospital properties in major markets in Canada, Brazil, Germany, The Netherlands, Australia, and New Zealand.

The healthcare REIT generates stable cash flows from having a high occupancy of about 96% and a weighted average lease expiry of 13 years. Additionally, it gets organic growth from having more than 70% of its net operating income indexed to inflation. It also has CAD$370 million projects in its development pipeline that’ll also add to growth.

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Top U.S. Dividend Growth Stocks for January

The U.S. stock market, using SPDR S&P 500 ETF Trust (NYSE:SPY) as a proxy, has bounced about 8% from a low in December. The ETF has some strong resistance at the US$270 range. It needs to break that range and make a new high to indicate that the correction that started in October won’t continue.

technical chart showing SPY bouncing from Dec 2018 low
Source: Stockcharts

Despite the market rebounding, there are still some good-value quality U.S. dividend growth stocks for long-term investing. Here are two out of seven top U.S. dividend ideas I wrote about here in December. They’re still great buys today.

dividend income
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Is It Time to Buy Walt Disney?

The main content for this article first appeared in the Seeking Alpha Marketplace service DGI Across North America, in which other stable, long-term companies were discussed.

Conservative investors should give Walt Disney (NYSE:DIS)  another look, as the stock has been consolidating and earnings catching up.

Disney World in Orlando

Disney World in Orlando

Walt Disney: The Business

Disney is a conglomerate of content. It owns Pixar (acquired in 2006), Marvel (2009), Lucasfilm (2012). And of course, Disney profits from its franchises via its theme parks, movies, and merchandises.

Recent News

In December 2017, Disney announced that it’ll acquire certain key 21st Century Fox assets. Here’s the press release and here is some additional info from NBC News. This will be a positive for Disney, as Fox has popular entertainment properties, including X-Men, Avatar, and The Simpsons. The acquisition could also lead to cost savings of more than $2 billion.

The Fox acquisition is expected to close by June 2018. From the Disney press release:

Prior to the close of the transaction, it is anticipated that 21st Century Fox will seek to complete its planned acquisition of the 61% of Sky it doesn’t already own. Sky is one of Europe’s most successful pay television and creative enterprises with innovative and high-quality direct-to-consumer platforms, resonant brands and a strong and respected leadership team.

However, Comcast (NASDAQ:CMCSA) has joined in on the bid for Sky. Perhaps the increased uncertainty around Sky is why Disney dipped recently.

The dip is a great opportunity to nibble some Disney. The stock now yields 1.6%, which is my minimum yield target for the stock. My conservative estimate is that the company has the capacity to grow its dividend at a rate of 7-10% for the next few years. Read More