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Software designer looks for stocks with a sustainable payout



Software designer

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The portfolio

Includes shares in BCE Inc., Bank of Nova Scotia, Qualcomm Inc., Inter Pipeline Fund, RioCan REIT, as well as exchange-traded funds such as BMO S&P/TSX Capped Composite Index Fund.

The investor

Sabeel Ansari began as a growth-stock investor in the mid-2000s. After the bear market of 2008, he decided to stop "listening to the experts" and become a do-it-yourself investor. His focus also changed to building up a stream of dividends instead of accumulating capital gains.

How he invests

"I always invest for the long term and purchase equities that have a sustainable dividend or distribution," Mr. Ansari says. "I invest in companies that share their profits while I stay invested in them, instead of not seeing any profit until I sell and exit the investment."

He specifically looks for dividend stocks yielding 2 to 5 per cent, with the dividends growing at 4 to 15 per cent annually(BCE, for example). Also on the shopping list are high-yield stocks paying distributions of 5 to 7 per cent (such as Inter Pipeline, which he also owns) and ETFs yielding 1 to 4 per cent. (BMO S&P/TSX Capped Composite Index Fund).Mr. Ansari is getting close to receiving $2,000 annually from his investments. His goal is $12,000 annually by 2021. The rising income he receives every year can be put to work earning more income.

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Recent move

Qualcomm's wireless chip sets are found in the majority of Android, Windows and BlackBerry smartphones. The company's dividend, now paying 2.1 per cent, has been raised 11 years in a row, the last five of which saw an annual dividend growth rate of 13.6 per cent.

Worst move

"Buying shares in BlackBerry [then Research In Motion] in 2008 for $114.99." It appeared that things were looking up. "But not for BlackBerry, which turned out to be at its peak."

Best move

Picking up RioCan REIT at $13.65 in April, 2009, when the yield was 10.3 per cent.

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"Every investment should be well understood. And as Warren Buffett says, 'Forever is a good holding period.'" Mr. Ansari writes on dividend investing and his portfolio at personal finance blog Roadmap2Retire.

Want to share your strategies?


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