Many see Scotia Bank as a buy.

 

The Scotia Bank (BNS) has been on a lot of buy lists for some time now. With the stock price threatening to hit a new low for the year, BNS is looking awfully good. Its dividend of $4.24 is yielding approximately 6.65%. Nice.

This may surprise you but I don't like to chase dividend yield. Too rich a dividend can be a warning. I have enough BNS in my retirement portfolio to satisfy my needs. I do not feel forced to buy more but as the price drops it becomes worth consideration.

I like to buy and hold and because of this I have missed a number of good sell moments. Now, I am changing my approach somewhat. When prices are quite depressed, buy. Hold while the price recovers and then sell some but not all the investment. Keep the core holding but reinvest the funds from the recent sale in another solid, dependable, dividend paying stock. In this way, one can build a more diversified portfolio delivering a solid dividend income.

TRP getting harder to resist

 

TC Energy Corporation (TRP) is getting harder and harder to resist. It is now yielding 7.02%. A very nice yield for anyone but especially appealing to retirees living on their dividend income.

TC Energy is a pipeline and an utilities operator. I understand TC Energy transports about 25% of the natural gas consumed in North America and operates Bruce Power, the nuclear generating facility on the shore of Lake Huron in Ontario. TC Energy is more exposed to the natural gas market than Enbridge, one of its main competitors.

A quick check of the Financial Times shows that TC Energy has:

• 15 analysts covering TC Energy expect the dividend to grow 3.39% in the upcoming fiscal year
• TC Energy Corporation had revenues for the full year 2022 11.88% above the prior year's results
• 17 analysts offering 12 month price targets for TC Energy Corp have a median target of 61.00. This is approximately a 14% increase from recent prices.

If I didn't already have exposure to TRP, I'd be a buyer at today's price. As it is, I am going to wait and see if TRP drops a little more than another two dollars. That would make a new low for the past year. I would find TRP irresistible at that point.

BNS is in bear market territory

 

A lot of folk are bad mouthing the Canadian big banks at the moment. Why? Mortgage loans. And, in the case of the TD Bank, there is an active lawsuit hanging over it in the States. The result, the stock prices of the big six are falling. 

That said: the solvency of the banks is not in question. It may soon be a time to buy. For some, that time might even be right now. The Bank of Nova Scotia is yielding 6.5% today and the dividend is safe. For long term investors who like, or even need, dividend income, this is a very good buy and hold candidate.

Me, I have enough BNS to tide me over. At $65.28, my interest is peaked but I am not buying. If BNS should drop a little more than two more dollars, it will be selling at its lowest price in a year. Below $63, it would be hard to argue that BNS is not a buy. 

If a retiree could put $10,000 into BNS at $62.99, it should yield almost $675 annually indefinitely with steady increases to the dividend payout quite likely if the past is any indication.