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 235 - Scoring for Book: CABLE ONE - CAL-MAINE FOODS - CANADIAN NATURAL RESOURCES
Welcome to Safe Dividend Investing's Podcast 235- (16 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;
(1) CABLE ONE INC (STOCK SYMBOL CABO)
(2) CAL=MAINE FOODS INC (STOCK SYMBOL CALM)
(3) CANADIAN NATURAL RESOURCES LTD (STOCK SYMBOL CNQ)
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
16 August 2025
Podcast 235
Greetings to listeners all around the world. Welcome to Safe Dividend Investing’s Podcast # 235, on August 16th of 2025. My name is Ian Duncan MacDonald; I am an author of six investment books.
I continue to work on 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 easy it is to select financially strong companies that will not only provide you with a generous, reliable dividend income but also grow the value of your stock portfolio. This is unlike blindly entrusting your life savings to a so called “investment professionals” (whose hidden agendas and incentives may not be in your best interest). A self-directed investor can not only save thousands of dollars in investment fees and commissions but know exactly what they are invested in and why they carefully chose each stock.
As a self-directed investor you gain free access to the free stock research tools that your bank probably has available. They allow you to narrow your portfolio 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 for my new book. The following are the criteria I fed into my bank’s stock selector program to identify 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.
These 200 stocks give readers a good choice in sorting out the 20 best for their portfolio. Twenty is large enough to give a portfolio safe diversification, yet small enough for an investor to easily build and manage their portfolio.
In the two preceding weeks I reviewed six stocks in my alphabetically sorted list of 200 stocks. This week I have chosen to review the first three stocks whose company name begins with the letter “C”. By analyzing these 3 stocks along with me, I will show you see how easy it can be for you to become a confident, self-directed investor.
The three stocks selected for this week are:
(1) Cable One Inc (stock symbol – CABO) a US based company
(2) Cal-Maine Foods Inc (stock symbol – CALM) a US company
(3) Canadian Natural Resources Ltd. (stock symbol - CNQ) a Canadian 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. It even shows how to calculate the scores manually without the assistance of the IDM software. Calculating a score is a big help in choosing the safest stocks for your portfolio.
The first data selection element to be considered in your selection 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 these three was CAB0 at $127.02, the two lowest were CNQ at $29.92 and CALM was $107.53. (All amounts are in US dollars).
The second element for consideration was the share price 4 years ago, in July of 2021. Back then, CABO was at $2,067.12; CALM was at $35.57 and CNQ was at. 16.61. CALM has more than tripled its share price in the four years. CNQ almost doubled its share price while CABO share is now only at about 5% of its 2021 share price. A stock whose share price is growing is another sign of strength. A shrinking share price is warning sign to consider.
The third element is the book value of the shares. Book value is a financial evaluation of worth as calculated by accountants. CABO with a book value of $319.61 was almost triple its current share price of $127. Furthest below its current share price was CALM with a book value of $35.57, about a third of its current share price. CNQ’s book value of $23.48 was about half of its current share price.
Strong stocks whose book value is close to their current share price or even exceeding the share price make the purchase of that stock seem like a bargain. It is like paying for a Chevrolet and getting a Cadillac.
The fourth and fifth elements are how many investment analysts have given the stock “buy” and “strong buy” recommendations. My research indicates that an analyst is lucky to accurately predict future stock prices 50% of the time, I included analyst recommendations in the scoring because they do motivate some investors to buy or sell stocks which thus impacts share prices.
Interestingly CABO and CALM had NO buy or strong buy recommendations. CNQ had 6 Buy recommendations and 1 strong buy recommendation. I define a strong buy as an analyst’s predicted share price is 50% higher than its current share price
The sixth element was the dividend yield percent. CALM was highest paying a dividend yield of 7.77%, CNQ’s dividend yield was 5.72% and CABO’s was now 0% which was unusual since at the time CABO was selected for the book, CABO was then paying a dividend of 5% or more. I explain what has happened at CABO since then.
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 desperately hold onto shareholders who do not consider all the information 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. CALM’s healthy operating margin of 36.05%, led with CNQ following slightly behind at 28.53% and CABO way behind with an unhealthy minus 11.78%.
To drive up their operating margins, good managers focus 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 normal operating margin for a company in that industry is.
The eighth element was the stocks share trading volume. High trading volumes usually, but not always, indicate rising prices for a stock in high demand. CNQ had 3,803,818 shares traded that day. CALM had 749,722 shares traded, which was followed by CABO with 189,540 traded shares. Special events like a national holidays can impact the trading of shares. An unusual sudden high volume of shares traded can indicate either high demand or rejection of the stock and must be investigated further.
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 indicating how many months of profits, it would take to earn back the money invested in a stock. The lower the ratio the better.
CALM had the best Price-to-Earning’s ratio at 4.3x. CNQ’s Price to Earnings ratio was also good at 10.5x and CABO’s minus 1.4x ratio is unusual and requires further investigation.
When all these sub elements were entered into the IDM scoring software and the resulting sub-scores for each element were added together the total grand score for CALM was 69, CNQ was 67 and CAB0 was 45 .
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).
The higher the score, the stronger the stock appears to be. However, 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 income producing choice than a score of 70. That is why it is always recommended that you always take the time to check historic share prices and dividend payouts going back, year-by-year, to 1999.
What you are looking for is a healthy trend over the 25 years in which both the share prices and the dividend payouts were 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 confirm 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, you will often see these managers increasing dividend payouts to keep pace with their rising share prices. These dividend increases keep your dividend income well ahead of inflation.
When I did a history check on the three stocks, I found that CABO was not listed on the stock exchange until 2015 when its share price debuted at $399. No dividend was paid until the next year, 2016, when a dividend of $1.50 was paid on a share price that had risen to $534. Dividends rose to $2.95 in 2024 even though the share price fell that year to $341.
Company executives can control revenue and expenses to generate the profits that pay dividends. They have little control over speculators who control the company’s share price.
CALM’s share price in 1999 was $1.09 but it did not pay a one cent dividend until 2004 when its share price had climbed to $5.66. By 2014 its share price was $38.45 and it was paying a dividend of $0.22. In 2024 its share price had climbed to $70.32 and was paying a dividend of $0.77.
CNQ was not listed on the stock exchange until 2000 when its stock traded at $1.88 and no dividend was paid until the next year 2001 when the stock was at $1.80 and it paid a dividend of one cent. By 2006 the stock was at $13.16 and the dividend had doubled to 2 cents. In 2016 the stock was $14.81 and the dividend payout was 12 cents. In 2024 there was a dividend of 53 cents on a stock then trading at $37.06.
The final historical stock record to check is to do a Google search of the each stock including their company name, their stock symbol and the words “complaints” and “legals”.
CABO’s search revealed they had suspended dividend payments on May 1, 2025 due to a class action legal investigation citing possible breaches of federal securities regulations. This was in regard to alleged inflated projections.
CALM was found to be under investigation by the Anti-Trust Division of the Department of Justice over their high price of eggs. CALM is the largest egg producer in the USA. Its sales had doubled over the previous year’s sales while increasing their net income five times greater than the previous year.
CNQ faced its usual legal scrutiny and complaints related to environmental concerns and pipe line decommissioning.
As you can see from these three stocks, the perfect stock does not exist. However, if you had to make a choice which one of these 3 stocks would you choose? Why have you excluded the other two? By being able to make such a choice you have shown that you are capable of analyzing a stock.
While scoring stocks helps protect your investment, your safety is also greatly increased when you initially invest equally in a portfolio of 20 strong stocks. With 20 stocks only 5% of what you have invested in any one stock would ever be at risk because you would be generating between 6% and 8% in annual dividend income while also generating an annual portfolio capital gain, most years, of 9% or more. The odds of you ever realizing a significant loss in your total portfolio are highly unlikely. If you chose to invest your dividends back into your portfolio you can expect to see your portfolio doubling within 5 years.
(FOR MORE INFORMATION ON HOW THIS APPROACH TO INVESTING CAN GUIDE YOU TO A SAFE, PROFITABLE GROWING PORTFOLIO VISIT my website www.informus.ca and listen to all 234 of my weekly Safe Dividend Investing podcasts.
Until next week’s podcast this is Ian Duncan MacDonald encouraging you to become a successful, wise, self-directed investor.