Richard CroftDividend 15 Split Corp.DFN.TOCOMMENTMay 10, 2016

These split shares company give you some leverage. The total return over 20 years has been 8% vs. the TSX which has done no better. Has some good dividends here, but is volatile--when the market goes bad, this really goes bad. 

Takes 15 stocks, splits them into preferred and common, and here you're left with the common shares. The preferred shares get guaranteed dividends, and the common shares get everything else. Coming to more of a historical long-term level, which is stable. People buy this for the dividend, not for capital gains.

Overall, looks like a stable investment. He wouldn't worry about the dividend. He can't recommend a buy on it yet, as he'd have to do some more research to fully understand it as well as the dip in the chart.

Uses leverage. Pays lots of yield. Highly volatile. Can be risky depending on markets.

High volatility shares.
Be prepared for large ups and downs.
Not as defensive as other names.

He is not bullish on Canada and would not play dividends through this one.

They take a basket and they make a common shareholder that they give double dividend by leveraging and a preferred shareholder that they pay 5-5.5%. Sounds great but the basket of stocks has to go up significantly in a rapid way if not you lose money. This is the opposite to buy and hold.

The credit rating is lower on these splits than on dividend shares. Don't waste your time. Buy individual preferred shares.

They take bank stocks, or insurance and in some case energy companies, and then they split it internally into preferred shares or common shares, and then they write covered calls on the common shares. They are getting yields around 13-14%. That brings up the question: How is that possible? He’s been doing coverage calls for 30 years, if he get 10% or 12% he is very pleased, but you’re never going to do that consistently. What they’ve got is a very very good yield but if you take a look at the volatility, and there's a lot of volatility, in 2016 the market was down 15% and this stock was down 60%. In 2007-2008, the market was down 60% and this was down 80%. It’s a yield play. Never trust the yield. You have to look behind and see what’s going on there and what’s creating the yield. He wouldn’t touch this.