SUPERIOR TAX ADVANTAGES Thanks to the enhanced dividend tax cred- it, investors earn substantial tax advantages when investing in Canadian companies. For the majority of investors, a dollar of dividends is worth 1.4 times a dollar of in- terest income received on an after-tax basis. Stated another way, on an after-tax basis, a four per cent dividend yield is equivalent to a 5.6 per cent bond interest yield. For an Ontario investor earning an in- come of $65,000 a year, a $100 bond in- terest payment would net $67 after-tax, while a $100 dividend would net $92. An obvious tax savings. Before making any investment, there are certain things to consider, includ- ing: the sector in which the company operates, the balance sheet and income quality, the length and track record of dividend payouts, the strength of man- agement, and credit quality. POWER YOUR PORTFOLIO Power utilities tend to pass these tests, and therefore dividend-investors rank them among their favourites. Utilities Research Symposium Canadian Memorial Chiropractic College and Colloquium October 24 - 25, 2009 Saturday, October 24 Research Symposium/Annual Conference: Managing Patient Health: Pain and Beyond • Full day of research presentations featuring experts from University of Toronto, Cleveland Chiropractic College, University of Utah and CMCC • Evening reception and keynote address: Imposters in Spine Care – by Carlo Ammendolia, DC, PhD Sunday, October 25 Reconciling Subluxation and Science – A Colloquium Contributing sponsors: Palmer Chiropractic College, National University of Health Sciences • Half day forum with experts from Palmer Chiropractic College, National University of Health Sciences, UOIT, University of New South Wales and CMCC Space is limited, contact us now to reserve your seat! For further information: [email protected], [email protected] 416 482 2340 ext.191 www.cmcc.ca Media Sponsor: Canadian Chiropractor www.canadianchiropractor.ca CANADIAN CHIROPRACTOR | SEPTEMBER 2009 • 33 have long-term contracts to provide an essential service. Power utilities have growth potential that has historically yielded solid, long-term returns, superior to many other market opportunities Utility stocks generally have a low- risk profi le and pay an exceptionally consistent and growing cash stream to investors. Paying out roughly 30 per cent of cash fl ow, they have the ability to re- invest and grow their existing business with fl exibility to fi nance new projects. This growth translates into higher divi- dends and stock prices, over time, and has historically yielded solid long-term returns that are superior to many other market opportunities. As they increased their earnings, the Canadian utility sector also grew their dividend payouts by fi ve per cent in 2005, nine per cent in 2006, four per cent in 2007 and nine per cent in 2008. Utilities have historically been a good investment. The Canaccord Adams util- ity index – which tracks the basket of utility stocks – had a compounded an- nual growth rate of 12.8 per cent over the last 30 years versus 9.5 per cent for the Toronto Stock Exchange (TSX). Fur- ther, these returns were achieved with less volatility than is found in the overall stock market. As of May 15, 2009, utility dividend yields are averaging fi ve per cent, with room for growth in both the dividend yield and stock price. Given the eco- nomic backdrop, and with current mar- ket prices relatively low, this could be an opportune time to consider a defensive investment in a good quality dividend- paying company. •
Chiropractic + Naturopathic Doctor September 2009: Page 33
