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 272 - CHOOSE YOUR DIVIDEND PAYING STOCKS CAREFULLY
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Welcome to Safe Dividend Investing’s Podcast # 272 on April 25th of 2026.
My name is Ian Duncan MacDonald, and I am the author of 7 investment books. My seventh investment book, Achieving Financial Independence Safely - 200 NYSE Stocks Analyzed and Scored" became available January 3rd on Amazon. You can easily find it by searching in Amazon or Google for "Ian Duncan MacDonald books". For more information on all my books, stock scoring software and podcasts go to www.informus.ca
In this week's podcast I investigate how to safely maximize the income realized from dividends. If investors who did well over six years by investing in the top 20 highest scoring stocks in my my 2020 book "Safer Better Dividend Investing" would their dividend income not have been much higher if they had instead invested in the 20 stocks listed in the book that had the highest dividend yield percentages? I was surprised by what my research revealed.
It is important to do your own research when you are looking for financially strong stocks with long histories of rising share prices and dividend payouts. The stock scoring software that comes with my books helps you in making stock buying decisions. Over the 272 issues of the weekly "Safe Dividend Investing" podcasts you can get many insights into building a safe strong generous portfolio.
Ian Duncan MacDonald
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
imacd@informus.ca
Podcast 272
25 April 2026
Safe Dividend Investing
CHOOSE YOUR DIVIDEND STOCKS CAREFULLY
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast #272, recorded on April 25th of 2026. My name is Ian Duncan MacDonald. I am the author of seven investment books. My latest book was “Achieving Financial Independence Safely – 200 NYSE Exchange Stocks Analyzed and Scored”. It was available for delivery from Amazon on January 3rd. Those trading on the Toronto Stock Exchange can go to my book Canadian High Dividend Investing – 215 Scored Stocks.
To learn more about the benefits of my seven investment books, please visit my website www.informus.ca. Alternatively, you can also do a Google search or an Amazon search for "Ian Duncan MacDonald books”. On Amazon you will find sample chapters and reviews by investors.
In podcast 271 I wrote about how being able to go back to my earlier investment books to see how a stock evolved over five or more years gives me greater confidence in building a strong portfolio.
I described how investing $5,000 in Royal Bank shares in 2020, when it was scoring a 76, would be worth $13,188 in 2026. Over those six years, each share would also have generated $1,770 in dividend income. The Royal Bank’s score of 76 was the highest scoring stock in my 2020 book.
I always recommend, for safe diversification, that a portfolio contain 20 stocks. Since 2020 those who invested in the 20 highest scoring stocks in the book and left their portfolio alone did well. They never had a need to replace any of the 20 stocks. They were able to relax and watch their wealth grow as they lived off their steady reliable dividend payments.
I had wondered whether this rather simplistic investment strategy of just choosing the highest scoring stocks for their portfolio from the book was the best choice if the objective was to realize the highest dividend income.
Only one of these 20 highest scoring stocks had a lower share price in 2026 than its share price in 2020. Several like, the Royal Bank, Canadian Natural Resources, Manulife Financial, AltaGas, Restaurant Brands Bank of Montreal and National Bank saw their share price double within the six years.
Since my primary investment objective is the highest safe dividend income possible, I wondered if investors could have done better if instead of purchasing the top 20 stocks by score if they had purchased the top 20 who were paying the highest dividend yields.
I have now analyzed the top 20 dividend yield stocks from that list on page 321 of my 2020 book “Safer Better Dividend Investing”. Of these 20 highest dividend payers the highest dividend yield was 7.51% for Great West Lifeco (stock symbol GWO).
The lowest dividend yield for the 20 highest scoring stocks was Magna International (stock symbol MG) with a dividend yield of 3.49%. Its score was a 67.
The second highest scoring stock with a score of 74 was Fortis Inc. Its dividend yield was also 3.49%. Even the Royal Bank with highest score of 76 only had dividend yield percent of 4.64%. Only 3 of these 20 highest scoring stocks qualified to be listed in the 20 stocks paying the highest dividend yield percent.
If my primary objective is seeking the highest, most reliable dividend income, it seemed logical to concentrate on building a portfolio of 20 stocks scoring over 50 that were paying the highest dividend yield percents.
I analyzed the 20 of the highest dividend payers. It quickly became apparent that building a portfolio of the highest dividend payers would have been a mistake. While 4 of these 20 highest dividend payers would have more than doubled their share price, 5 of the stocks ceased to exist over the six years. The 5 were real estate and income trusts created by large financial institutions like Brookfield and Manulife. Over the six years the five were either liquidated, delisted or merged into other income trusts. While their investors appeared to have got most of their original investment back, the dividend income they would have been below the income realized from the 20 highest scoring stocks.
Hundreds of income trusts are created each year. Many will survive for two years but hundreds disappear before the fifth year. Large financial institutions are always testing hundreds of possible income trusts, mutual funds, and ETFs. When their testing identifies those that look like their value will grow and be easy to sell, they then list it on a stock exchange. It is then a matter of promoting it as a safe high-dividend income producer. The financial institution’s hope is that when the share price soars they will be able to sell their introductory shares for a large profit. If the new income stock fails to quickly increase in value by millions of dollars it is then either merged into another fund or closed.
Listing a stock on an exchange is expensive. Unlike a manufacturer or a business that produces services or products, a fund can only exist if investors are willing to buy its shares.
If chasing after the 20 highest dividend yield stocks is not the path to accumulating great wealth and neither is chasing after the 20 highest scoring stocks, what is safer?
Further research suggested a compromise. It seems if you selected 20 stocks with scores between 65 and 58 that you would hit a sweet spot where 20 stocks in that scoring range over the next 6 years would show a doubling, tripling even quadrupling in their share price.
In the 20 stocks that fell within this 65 to 58 scoring range, I found examples like Tourmaline Oil whose share price went from $12.84 to $59.76 while generating $22.99 in dividend income between 2020 and 2026 on a dividend yield of 3.73%. Its dividend payouts had increased in tandem with the increase in its share price.
Another example would by Imperial Oil whose share price went from $22.76 to $167.54. Canadian Tire’s share price went from $117.08 to $193.45. It also had the highest dividend payout after the six years of $36.76.
Based on my critical observation that their long-term survival and share price growth are questionable, income trusts and Real Estate Investment Trusts were excluded from this list of 20 carefully selected stocks scoring between 65 and 58. A good, safe portfolio requires both good capital gain and a consistent high dividend income over many years.
Of these 20 stocks chosen their dividend yields ranged between 3.73% and 9.13%. Their share prices ranged between $193.50 and $12.11. Dividend payouts by these stocks over the six years ranged between $6.53 and $36.76. A compromise between high scores and high dividend yields appears to be the secret to realizing a larger dividend income and higher capital gain in a portfolio’s value.
That’s all for this week folks.