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Email this5:32 am
September 11, 2013
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RetireEd, read post #48 again, it's there.
Dividends paid out to you are included in your income that year, plus you get the tax credit that year, then done, no other effect.
Return of capital is not included in income that year, it just reduces your cost base for purposes of capital gains/losses calculation in the future year that you sell the shares.
When at the beginning the post says "Dividends pay out each year: $1.50" I would say instead "Amounts pay out each year" because only $.50 is the declared dividend, the other $1 is return of capital.
As far as optimization outside registered plans, you'll have to run your own scenarios based on your income level, sources of income and deductions/credits, marginal tax rates, social benefits received, etc. For example, I've heard that if you have no other sources of income you can earn about $50K a year in eligible Canadian dividends and pay zero tax. The best mix is highly dependent on your specific situation.
4:04 pm
September 7, 2018
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MG said
In fact, the 5 big banks in Canada did NOT have ANY capital gain in 2020 as a group. So, no, 11% return was NOT achieved for bank shares in 2020. Here are the closing prices on December 31st of the last 2 years:2019, 2020, % Incr/(Decr)
CM $108.06, $108.72, 0.8%
RY $102.75, $104.59 , 1.8%
BNS $73.35, $68.80, (6.2%)
TD $72.83, $71.92, (1.2%)
BMO $100.64, $96.78, (3.8%)If you held just one share of each of the 5 banks, you would be down 1.5%. If you happened to hold more of the losers, you would be down even more. Yes, the capital loss is offset somewhat by the dividend but you can see that the return is nowhere near the claimed 11%.
I thought it would be fun to see what the current value of bank shares is so I am listing the closing values today January 15-21.
CM $113.67
RY $108.40
BNS $70.21
TD $75.42
BMO $100.63
It will be interesting to review these values again as 2021 marches on - perhaps an approx 11% return INCLUDING THE DIVIDENDS (4%-5% annually) paid quarterly might be achieved for the year. The return will be an interesting comparison to HISA/GIC returns while approximately 1% to 1.90% right now but likely moving lower in 2021. Normally the banks (flush with cash reserves right now) would be raising their dividends at this time, but we know OSFI has not approved such as yet, but it will come.
4:27 pm
April 2, 2018
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Could you dig out value of these shares as of 2020, 2019, 2018, 7,6 and so we can see which one grows fastest?
That will be interesting...
4:44 pm
January 9, 2011
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Its interesting picking a couple of random dates, but without an offset for the simple overall market change, it doesn't indicate that much.
TSE Composite Index;
Dec 31 - 17,428.66
Jan 15 - 17,908.88
Up 2.75% due primarily to US politics and vaccines.
With this climate and banks' US ownerships, I would expect the weighted average gain for those banks would be better than the overall. Yes I agree a spot value for each over 5 years would 'improve' the sampling.
The main accomplishment of almost all organized protests is to
annoy people who are not in them.
7:41 am
September 7, 2018
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dougjp said
TSE Composite Index;
Dec 31 - 17,428.66
Jan 15 - 17,908.88
Up 2.75% due primarily to US politics and vaccines.
Yes, US politics and vaccines but also continuing low interest rates.
7:48 am
February 1, 2016
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It might be better to evaluate over a longer period of time. Here is a table of bank stocks we have held for a number of years:
10:25 am
March 30, 2017
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rodeworthy said
It might be better to evaluate over a longer period of time. Here is a table of bank stocks we have held for a number of years:
I dont think cad banks drip have 3-5% discount for years..
Its hard to beat the return of cad banks in the long term, esp since the mid 90s. But if you go farther back pre 90s, cad banks were a dud for a long time too.
12:52 pm
April 6, 2013
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Common shares of the Canadian banks have been decent investments. Not sure if they were that hard to beat.
Those non-standard return numbers are not meaningful or comparable to return numbers one commonly sees.
If one applies the same non-standard calculation to the TSX 300 Total Return Index, then, from the start of 2005 to the end of 2020, one gets
((63,846.13 / 21,444.89) - 1) / (2020 - 2005 + 1) = 0.124 = 12.4% per year
In contrast, the standard compounded internal rate of return number is
(2020 - 2005 + 1)√ 63,846.13 / 21,444.89 - 1 = 0.071 = 7.1% per year
6:24 pm
April 18, 2022
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(Reuters) - The cost to insure bonds of Goldman Sachs, Morgan Stanley and Citigroup against default hit two-year highs on Monday
7:50 pm
December 12, 2009
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pooreva said
Could you dig out value of these shares as of 2020, 2019, 2018, 7,6 and so we can see which one grows fastest?
That will be interesting...
pooreva, off the top of my head, in terms of capital appreciation, CM has probably had the greatest run in the past couple years, but it also, aside from BNS, had the most to catch up, having been a bit of a laggard. NA has also done well, as has CWB. RY and TD are also solid continuous YoY performers.
Currently, BNS remains a bit of a perennial dog in terms of Canadian bank stocks.
Cheers,
Doug
Full and Fair Disclosure: I own CM, BNS, TD, CWB, and HSBC (via the UK register). I also own GWO (a life insurance holding company).
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