Keyera Corp T.KEY

Take profit? Or hold..

[Cheadle12]

7+% yield still (I'm locked in at 15% on my original capital invested as I bought around $12-$14  per share.

Not sure if I hold and collect the monthly div, or take my profits and move into a name that has higher upside/more catalysts.. 

Thoughts here team?

[BlueJay2020]

Well, it largely depends on what alternative you are thinking about and why. The yield on cost is irrelevant at this stage (although impressive!).  I bought in at an average of $18, starting around $13 - I was buying for capital appreciation and the yield, and soon it will be just a yield play for me - and that's fine as I am primarily an income investor.   I don't see

[SargeX]

Hey Blue How she go? Excellent post with some great insights. I'd also add EMA and FTS as good buys as I think the reaction to the recent bond yield increase is an over-reaction and has now been priced into these guys. Ciao   Sarge

[Cheadle12]

Check Timbercreek Financial.  Stable, diversification and a nice ~8% yield.   I keep it along with ChemTrade and some REIT's + Midstreamers in my Income portfolio.  

[BlueJay2020]

Yeah, I used to hold a bit of Timbercreek, but it didn't have enough torque for me at the time. I might go back to it now.  As you say, nice and stable and good distribution (not a dividend). Used to own Chemtrade as well - in fact I keep getting drawn back to it because of the yield.  Too volatile for me, and I don't really understand the business and therefore when is a good

[fakmiz]

It depends where you hold the stock; in an RRSP, or TFSA. If in a straight investment account you would have to consider Capital gains tax which could be substantial.(depending on # of shares you hold). If in a RRSP or TFSA why sell as the dividend is tax free. Also are you in for the short term investment/return or long term ?In any event a 15% return on your initial investment is a good return

[SargeX]

I always find it interesting when people say dividend income is tax free in an RRSP. In the long haul, it is actually far from it and holding a Cdn eligible dividend in an RRSP is eventually taxed as income when it is withdraw. The marginal rate for the 2nd tax bracket for income in Alberta is 30.5%, If the dividend is in a non-reg account, then you pay as you go at marginal rate of 7.56%. Pay me

[Cheadle12]

Clearly you've never done your CFA Sarge. Time value of money?  Compound interest?  Staggered withdrawals? If it's your "Retirement" income and you only need a small amount to live on, it's in a very low tax bracket when withdrawing.   Also many creative options to move money into non-equities still within the RRSP and buy real estate and various other

[bcsc]

Is it not a fact that by holding an equity that pays an elligible dividend in your RRSP that you are in fact paying tax each and every year since tax is paid at the corporate level and since you hold in a registered account you cannot claim the dividend tax credit ?

[SargeX]

I'm not sure who you are directly this at. What I said was that if the stock is in a non-reg account, then you pay tax each year at a reduced rate because of the dividend tax credit. If it is in an RRSP, when you withdraw that dividend, it is treated as income and taxed at a higher rate.

[micromike]

RRSP is just a tax deferral program. In theory you are at a higher tax bracket when you are working so it makes sense to use it. It’s also an insurance policy if by chance you lose your job and are not working for a year or two. You can dip into it.   On the downside If tax rates keep going up then are you really saving taxes? When you retire and your income is just as high as or higher then

[bcsc]

The Dividend Tax Credit is not a tax break, it is an acknowledgement of the fact that taxes have been paid at the corporate level.  By holding eligible dividend paying stocks in your RRSP you are not deferring taxes at all, but agreeing to pay taxes twice, albeit perhaps at a preferable rate. Pay now and pay later. When it comes to capital gains one must decide if the deferal and change in

[bcsc]

Hi Sarge, Sorry for any confusion, my comment was not neccessarily directed at anyone or any post in particular, just adding to the topic in general. As you can probably tell I think we have been oversold on the wonders of RRSPs. However, as a newly retired self employed person (for the last 25 years), I believe the primary benefit is the fact that it induces one to save in the first place and

[SargeX]

Hey bcsc Thanks for the reply and for clarifying your opinion. I actually totally agree with you. I've been retireed for 8 years and my wife and I live off dividend income. My wife was stay at home so I always contributed to either my RRSP or a spousal RRSP. We have done very well with our investments and will be facing OAS clawback once we both convert to RRIFs.  In hindsight, I wish I

[hawk35]

Hi Sarge.  I've read some of the replies to your posts on tax in registered vs non-registered accounts.  Your 100% correct in your logic.  Not sure where these guys are coming from.  My wife and I also have registered and non-registered accounts.  30 years ago I had a six figure income plus bonus so tax savings on my RRSP contributions made it worth doing dispite the

[SargeX]

Hey Hawk Always a pleasure to hear from you and thanks for weighing in. I hope all is going well. You definitely have done a lot of things right and your plan sounds very solid.  I also totally like your comment about the kids. Many of the kids in our kids generation are going to get very large inheritances. I really like it that we can do that as our kids are great kids and them and the

[Cheadle12]

Excellent input Sarge, Hawk.   Real content, helpful for readers. Thank you ! ~ The Great Cheadle.

[Cheadle12]

The more I think about it, the more I think you both should venture over to the Crew Energy board.  Lots of intelligent dialogue. No dividend with Crew (income seekers I'd presume).. but a very well run company and the market price will eventually catch up to the value.  Just ask Oldnagger over there.. smart guy. I like my monthly dividends too..but also keep some growth names.. CR