Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
Podcast 234 - Learn by Scoring HIGH DIVIDEND STOCKS -BCE, Best Buy and Betterware de Mexico
Welcome to Safe Dividend Investing's Podcast 234 - (9 August 2025)
Ian Duncan MacDonald has started to write another investment book on stocks traded on the New York Stock Exchange and the NASDAQ. It will be called “2025 Edition – America’s 200 Strongest High Dividend Stocks – Analyzed and Scored”. It is being written for investors who fear making investing in individual stocks because they fear losing the savings, they may have spent a lifetime accumulating.
Ian's books always show investors an easy, safe way to pick financially strong companies who pay high dividends . Stocks that can provide a generous, reliable, growing income while also increasing the value of their portfolio.
Unlike mutual funds and other investment vehicles where investors have no control over their investment, self-directed investors who create a manageable portfolio of 20 stocks from the 200 analyzed and scored stocks will know exactly what they are invested in and why they chose each stock for their portfolio.
Ian is inviting those wanting to gain self-confidence in self directed investing to follow along in his podcasts over the next few months as he scores and analyzes a sampling of financially strong, high dividend stocks from his new book. Today he is scoring, comparing and analyzing BCE Inc, Best Buy Company Inc and Betterware De Mexico.
For more information on self-directed investing go to my website www.informus.ca or listen to the previous 233 weekly podcasts. The first 160 podcasts are devoted to answering questions from investors just like you.
Ian Duncan MacDonald
imacd@informus.ca
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
Canada, M9P 3R7
Toronto Telephone - 416-245-4994
New York Telephone - 929-800-2397
imacd@informus.ca
Safe Dividend Investing
9 August 2025
Podcast 23
Greetings to listeners all around the world. Welcome to Safe Dividend Investing’s Podcast # 234, on August 9th of 2025. My name is Ian Duncan MacDonald; I am an author of six investment books.
I am well into creating my new investment book to be called “2025 Edition – America’s 200 Strongest High Dividend Stocks – Analyzed and Scored”. Like all my other investment books it is being written for those who fear losing all the money that they may have spent a lifetime accumulating.
My objective is to show you how an easy it is to select financially strong companies that will not only provide you with a generous, reliable dividend income but also growing the value of their stock portfolio. Unlike blindly entrusting your life savings to the so called “investment professionals” (whose hidden agendas and incentives may not be in your best interest) a self-directed investors knows exactly what they are invested in and why they chose each stock.
As a self-directed investor you gain free access to the free research tools that your bank probably has available. They allow you to narrow your search down from thousands to the best 20 financially strong, high dividend stocks for your portfolio.
In selecting your stocks you will go through the same process I am now going through to select the 200 financially strongest stocks paying high dividends to go into my new book. I fed the following criteria into my bank’s stock selector program to arrive at the 200:
(1) were listed on the New York Stock Exchanges and the NASDAQ.
(2) were common shares, preferred shares were excluded.
(3) had a dividend yield percent of 5 percent or more.
(4) had a share price of $5 or greater.
(5) had an Operating Margin of 3% or more.
200 stocks give readers a good choice in selecting the 20 best. 20 is large enough to give a portfolio safe diversification yet small enough for an investor to easily build and manage their portfolio. My books supply the detailed information that allows investors to make a logical informed choice of which 20 will go into their portfolio.
Last week I reviewed the first 3 stocks in my alphabetical list of 200 stock. This week I have chosen the first three stocks whose company name begins with the letter “B”.
By analyzing these 3 stocks along with me, you will see how easy it can be for you to become a confident, self-directed investor.
The three stocks selected for this week are:
(1) BCE Inc (stock symbol – BCE) a Canadian based company
(2) Best Buy Co Inc (stock symbol – BBY) a US company
(3) Betterware De Mexico De CV (stock symbol - BWMX) a mexican based company
To help investors make stock comparisons I freely supply my IDM stock scoring software to those purchasing my books from Amazon.com. The books clearly describe how the scoring system works and even shows how to calculate the scores manually without the assistance of the IDM software. Calculating a score is a big help in choosing safe stocks for your portfolio.
The first data selection element to be considered is a stock’s current share price. A high share price is an indication of strength. It is a stock in demand. The highest share price of the three was for BBY at $66.48, the two lowest were BCE at $23.42 and BWMX was $13.97. (All amounts are in US dollars).
The second element for consideration was the share price 4 years ago, in July of 2021. Back then, BBY was at $114.84; BCE was at $50.75 and BWMX was at. 41.40. All three stocks have had large decreases in their share prices over these last 4 years. BWMX had the greatest percentage of decline while BBY had the largest dollar decline but the lowest percentage decline.
The third element is the book value of the shares. Book value is a financial evaluation of worth as calculated by accountants. BWMX with a book value of $1.66 was furthest away from its current share price of $13.97 while BCE with a book value of $13.57 was closest to its current share price. BBY’s book value of $23.48 was less than half of its current share price.
Strong stocks whose book value is close to their current share price or even exceeding the share price which makes their purchase seem like a bargain. It is like paying for a Honda Civic and getting a Lexus.
The fourth element and fifth element are how many investment analysts have given a stock a “buy” and a “strong buy” recommendations. Despite my research indicating an analyst is lucky to accurately predict future stock prices 50% of the time, I included analyst recommendations because they do motivate some investors to buy or sell stocks which thus impacts share prices.
Interestingly BWMX had NO buy or strong buy recommendations. BCE had 2 buy recommendations and BBY had 7 buy recommendations and one strong buy recommendation. I define a strong buy as an analyst’s predicted share price 50% higher than its current share price
The sixth element was the dividend yield percent. BCE was paying a dividend yield of 5.47%, BBY’s dividend yield was 5.72% and BWMX’s 9.38% dividend yield wat more than 50% higher than the other two. Since dividends are paid out of profits, they are usually a good indicator of a company’s financial strength. However, sometimes a weak company will pay an unusually high dividend to attract and hold onto shareholders who do not consider all elements in choosing the stocks for their portfolio.
The seventh element was the operating margin. It reveals the amount of money left over after operating expenses are deducted from revenues. The higher the operating margin percentage, the stronger the stock. BCE’s operating margin of 12.90%, was almost six times greater than the 2.82 % for BBY and a little higher than the 10.487% for BWMX.
To drive up their operating margins, good managers are focused on increasing revenues with as little increase in expenses as possible. However, certain industries have much lower profit margins than other industries. It is wise to compare operating margins of other companies in the same industries to get a better idea of what the operating margin is telling you about a company’s financial health.
The eighth element was the stock's share trading volume. High trading volumes usually, but not always, indicate rising prices for a stock in high demand. BBY had 1,142,396 shares traded that day. BCE had 500,415 shares traded, which was followed by BWMX had 153,878 traded shares. Such events as national holidays can impact the trading of shares. A sudden high volume of shares traded, can indicate high demand or rejection of the stock.
The final element was the price-to-earnings ratio. It is not unusual to see hot speculative stocks with ratios of 300 to 1 or even in extreme cases 1,000 to 1. I always think of price-to-earning as seeming to indicate how many months of profits it would take to earn back the money invested in a stock. BBY had the best Price-to-Earning’s ratio with 16.2x. BWMX Price to Earnings ratio was also good at 16.5x and BCE’s 76.4x ratio indicates much weaker earnings.
When all these sub elements were entered into the scoring software and the resulting sub-scores for each element were added together the total grand score for BCE was 44 BBY was 62 and BWMX was 41 . The IDM scoring software rates stocks between 0 and 100. The highest score I have ever calculated was an 86. The lowest was 3. I personally avoid adding stocks to my portfolio that score under 50. (Most stocks score under 50). T
The higher the score, the stronger the stock appears to be, however there can be exceptions. The highest score may not always be your best choice for your portfolio. A score in the fifties might be paying a much higher dividend yield and be a better choice than a score of 70. That is why it is always recommended that you next do a further check of historic share prices and dividend payouts going back, year by year, to 1999.
You are looking for a trend over the 25 years in which both the share prices and the dividend payouts are increasing. It would be unusual to see consecutive increases each year but over many years there should be an upward trend.
You are also looking for stocks in which the executives of the company believe in consistently sharing their profits with their shareholder/owners by paying dividends. Once such a dividend habit is established, the managers will often control expenses and revenues to maintain dividend payments that tend to rise as share prices rise. These dividend increases help keep your dividend income well ahead of inflation.
When I did a history check on the three stocks I found that BCE’s share price was listed at $11 in 1999 and paying a dividend 9 cents per share. .By 2009 the share price was at $21 and paying a dividend of 39 cents. In 2019 the share price was at $45 and paying a dividend of 79 cents. In 2024 the share price was down to $34 and paying a dividend of one dollar.
BBY did not pay a dividend until 2004 when the share price was $32 and dividend payout was 6 cents. By 2014 the share price was at $31 and the dividend was at 17 cents. In 2024 the share price was at $84 and the dividend was at 94 cents.
BWMX was not listed on the New York Stock Exchage until 2019 when the share price was $10 and there was no dividend paid. A dividend was not paid until 2020 when the stock had risen to $15 and was paying a dividend of 43 cents. In 2024 the stock was still at $15 and the dividend had dropped to 38 cents.
The final historical record to check is to do a Google search of the three stocks including their company name, stock symbol and the words “complaints” and “legals”. The BCE and BWMX searches revealed no significant legal actions or complaints. The BBY search disclosed various complaints and legal actions related to deceptive pricing, quality and employee treatment. (You might go to the written transcript that accompanies this podcast and review the information that was provided on each of the three stocks).
As you can see from these three stocks, the perfect stock does not exist. If you had to make a choice which one of these 3 stocks would you choose? Why have you excluded the other two?
Just using easily accessible data and common sense you have analyzed and chosen a stock.
While scoring stocks helps protect your investment, your safety is also increased when you initially invest equally in a portfolio of 20 strong stocks. With 20 stocks only 5% of what you have in any one stock would ever be at risk. Generating between 6% and 8% in annual dividend income while also generating an annual capital gain, most years, of 9% or more makes a significant loss in your total portfolio highly unlikely.
(FOR MORE INFORMATION ON HOW THIS APPROACH TO INVESTING CAN GUIDE YOU TO A SAFE, PROFITABLE GROWING PORTFOLIO VISIT my website www.informus.ca Until next week’s podcast this is Ian Duncan MacDonald encouraging you to become a successful, wise, self-directed investor.