Canadian banks

[cannew]

(09-14-2015, 03:16 PM)Roadmap2Retire Wrote: Just posted on my blog: Sector Overview - Canadian Banks

Great summary of the Cdn banks. These are definitely Buy, Forget & Add stocks in your portfolio, at least they are in mine and I've yet to be disappointed.

[Rasec]

Still worried about the tax aspect of it, for non US companies (CA in this case) in a normal *taxable* brokerage account, how are taxes held and declared?

Any americans with experience in this case?

[Caversham]

(09-15-2015, 10:35 AM)Rasec Wrote: Still worried about the tax aspect of it, for non US companies (CA in this case) in a normal *taxable* brokerage account, how are taxes held and declared?

Any americans with experience in this case?

I do not yet own any Canadian companies, but my understanding is that Canada taxes the dividend when it's paid, but this can reclaimed by using a "foreign tax credit" when filing income taxes.

[Roadmap2Retire]

(09-15-2015, 10:29 AM)cannew Wrote:

(09-14-2015, 03:16 PM)Roadmap2Retire Wrote: Just posted on my blog: Sector Overview - Canadian Banks

Great summary of the Cdn banks. These are definitely Buy, Forget & Add stocks in your portfolio, at least they are in mine and I've yet to be disappointed.

Agreed. Definitely the "buy and forget" category for most of these banks. I have been adding a few shares regularly through the year and will do doing so. Cant pass up this opportunity when they are trading at PE 10-11 and Forward PE 9-10. EPS growth also looks good for most banks going forward.

[Roadmap2Retire]

Just posted an article on the threats facing Canadian banks from the US/International investor's perspective

http://seekingalpha.com/article/3819186-...ook-threat

[crimsonghost747]

Thanks for the article!
As Dividend Watcher said in the SA comments section the dividends paid in CAD isn't really an issue when still in the reinvesting phase. I know that I never convert my CAD to EUR, I simply buy more from Canada. This will of course change at some point (in a couple of decades?) when I'll actually need my dividends to provide cash for living expenses. But guessing where currencies will be on such a long term... I'm not even going to try. In fact I'm not even sure where I'll be living then, for all I know I could be in Canada using CAD to buy my food.

Right now I see the weakness of CAD more as a good thing for me as I'm regularly converting EUR -> CAD to fund new purchases.

[Roadmap2Retire]

Yup, thats the right way to look at things. As DivWatcher said, it all averages out. And you have the right approach - invest for the long term, keep averaging up or down, and take advantage of the current currency trends when its in favor.

We Canadians are on the losing end currently - with our food prices going off the roof and our central bank governor cheerleading the drop in currency.

[rayray]

(09-15-2015, 10:35 AM)Rasec Wrote: Still worried about the tax aspect of it, for non US companies (CA in this case) in a normal *taxable* brokerage account, how are taxes held and declared?

Any americans with experience in this case?

Taxes are held from the dividend cash distribution in a brokerage account, with the US-CAD Tax Treaty there is no double taxation, as a US investor there is a 15% foreign tax exemption. If CAD investments are held in a retirement account such as a ROTH IRA it's all tax free under the current policies.

In my brokerage account I receive all dividends in cash for later investments, regardless of company-country origin. In my ROTH account it's a mixture of both--all my foreign investments are dripped and currently the US companies are selectively dripped or dividends received in cash unless or until the maximum $5500 is allocated then after that, all dividends are dripped until the new year. In order to be a more disciplined investor I contribute weekly in the ROTH then as monthly dividends come in I allocate the dollars to a stock once the cash reserves hit $1000 to 1500. If I put in $5500 this morning, I won't hold onto it, it will be invested within hours, I have ZERO CONTROL with cash in my account! It's extremely difficult in times like the one we're currently experiencing because I see a lot of great buys and want to invest right now rather then later. Okay, I'll stop now because I went off on a tangent.

[Roadmap2Retire]

Royal Bank Of Canada Dividend Stock Analysis 2017

[Roadmap2Retire]

Toronto-Dominion Bank Dividend Stock Analysis 2017

[Dividend Watcher]

Good article, R2R. Despite the fluctuating exchange rate, I'm quite please with how all the CA banks in our portfolio have performed.

The only concern at this point is that the payout ratio is close to 50% for all of them. IIRC, all the banks have said, at one point or another, that their goal is to maintain the payout ratio in the 40%-50% range. I'm expecting the dividend growth to moderate for the near term unless the rising interest rate environment drops to their bottom line.

[crimsonghost747]

R2R, will we be getting one of these articles for each of the big 5?