Tag Archives: TSX:CTS

Merck: Our Recent Dividend Stock Purchase

Thank God we have maintained a diversified portfolio. Although we feel a bit queasy to see our growth stock holdings fall a lot recently, it’s nothing we’ll lose our sleep over. Besides, my stable dividend stocks have been resilient with some that have appreciated recently! That stability has helped keep us calm despite the growth stock volatility.

Here’s a comparison. Shopify (TSX:SHOP)(NYSE:SHOP) stock has fallen about 20% from its all-time high in about 2.5 months and Converge Technologies (TSX:CTS) has declined about 26% in about 5 weeks. 

pug feeling down

While the main stock we’ll talk about in this article, Merck (NYSE:MRK), has popped about 15% in roughly 2 weeks. First, we’ll go over why we started a position in the dividend stock. Second, we’ll discuss why it recently popped.

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A Canadian Dividend Aristocrat in the Making?!

A Canadian Dividend Aristocrat typically refers to a TSX stock that has increased its dividend for at least five years. Ever wonder what a Canadian Dividend Aristocrat must be like before it actually becomes one?

Let’s rewind a bit. The stock must pay its first dividend and after that, be able to continue increasing its dividend year after year. Therefore, it should generate stable (ideally growing) earnings. 

I believe I have a stock here that is a Canadian Dividend Aristocrat in the making. However, I’m probably way ahead in this thinking because it’ll likely take years before it will pay its first dividend.

Why do I hold shares of this stock now if it pays no dividend? …because if I’m right, this stock is going to give me a whole lot of capital gains before it initiates a dividend. 

Right now, this small-cap stock has better places to allocate its capital. It was no April Fool’s joke when it announced another acquisition on Thursday, which drove the stock price 13% higher. 

Source: Yahoo Finance – TSX:CTS’s April 1, 2021 price action
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