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Greg NewmanDividend 15 Split Corp.DFN.TOCOMMENTJul 28, 2017

This really depends on the underlying basket. They come to the market and usually strip out the common shares versus preferred shares. They take the capital from the preferreds, concentrate it and lever it up on the underlying common stock. As a result, you have a much bigger dividend, but you need to have the stocks working for you. If they don’t, you can get twice the risk, and there is usually an expiry of 5-10 years and you can be in a situation of a capital loss.

Greg Newman

Unknown

Unlock Rating

$11.15

Stock price when the opinion was issued

$8.99

As of Aug 12, 2026. Market Open.

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RISKY

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.

DON'T BUY

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.

HOLD

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.

HOLD

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

HOLD

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

DON'T BUY

Simpler portfolio with better growth if you own the individual stocks, where you get both the dividend and capital appreciation. With this one, you're playing dividend vs. capital appreciation.

COMMENT

make

WEAK BUY

These companies are hybrids created by the big brokerages and owned by banks like Woody Gundy. They enhance yield by splitting off the growth portion of a stock from the yield-paying portion. Usually, this works, but you're giving up growth opportunities. Fees are involved, though. He doesn't own these derivatives. Not a bad idea for a retail investor looking to increase income.

DON'T BUY

You get a magnification of performance both on the upside and the downside. So much easier to just buy the individual holdings, collect the dividend, get the capital appreciation, and not pay a fee. Why buy this manufactured security when you can buy the real thing? Doesn't trade well, and you're locked in.

DON'T BUY

It is a split share financial corp. It has a big distribution. There was volatility in three periods from 2011. You have to be mindful of the volatility. There is some leverage involved and downside risk in times of market volatility. He would avoid this at the moment.

DON'T BUY

It is a strip corp. where they strip out the dividend. You will see price shocks on this one. It is highly leveraged. He does not like it. There is a lot of risk here.

DON'T BUY

Yield of the ETF is higher than the components of the underlying stocks. They split the stock into preferred and equity. They sell options out of the equity version. A lot of investors don't know that there is leveraging that can hurt the price, and a high yield comes with risk.

DON'T BUY

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

COMMENT

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.

DON'T BUY

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

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Greg NewmanDividend 15 Split Corp.DFN.TOCOMMENTJul 28, 2017

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