Greg NewmanDividend 15 Split Corp.DFN.TOCOMMENTSep 23, 2016

It can work really well, and you can get really nice returns. They do write some covered calls. The underlying basket doesn't go straight up. If it stalls or goes down, you have to pay out the preferred shareholders. Risky.

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.