My investment strategy is simple. I buy solid, blue chip Canadian companies that pay growing dividends that I reinvest.
When looking for companies to invest in, I have six rules that I follow:
- It must have a yield of 4%.
- It must have a low dividend payout ratio.
- It must have a strong cash flow.
- It must have low debt.
- It must have a strong dividend growth history.
- It should have a P/E ratio around 15 or lower.
Investing in blue chip dividend stocks allows you to invest in trusted companies that have been in business for many years. My main objective is to buy shares in these companies when the yield is high, which means the stock price is lower then normal. When I receive dividends in my trading account, I pool them until I have enough money to buy dividend stocks that are attractively priced on my watch list. By reinvesting the dividends, my portfolio increase from compounded growth. Slowly at the beginning, but as more shares are purchased, more dividends flow in until I have a massive portfolio that is built over time.
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