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5 Tips for Investing in Canadian Dividend Paying Stocks

By Edited May 20, 2016 0 0

Did you know that investing in Canadian dividend paying stocks can be an added boost to your portfolio? Many Canadian companies are often overlooked in place of other companies in the US and other leading nations of the world. If you are looking for some safe investments that can provide dividend income, then you may just find what you are looking for from Canadian companies.

Even though there are some excellent Canadian dividend paying stocks that can make great investments, there are also several questionable stocks that come from Canada. That is why it is important to study up and do your due diligence before you begin investing in any type of security. To make things a little simpler to start, here are 5 tips that should help you invest in Canadian dividend paying stocks.

  1. Watch out for CANROYs - A Canadian Royalty Trust can look like an incredible investment opportunity on the surface. Most of these trusts come with a double digit yield which can make any investor salivate. Unfortunately there is more that makes up these trusts so you need to be aware of any concerns before you spend a dime.
  2. Unknown Market - As with any foreign market, you need to study up on unknown markets to get a feel for how health of its economy. Unless you keep close tabs on Canadian dividend paying stocks, chances are you will need to some research on this new market before you begin investing.
  3. Volume - Some of the highest paying Canadian dividend paying stocks have incredibly low volume. These are stocks that you want to stay away from if you are looking to keep your risks low.
  4. Exchange - Do you know what stock exchange a Canadian dividend paying stock is on? In some cases, the company may trade on multiple exchanges (including the US), which makes it easier to invest. On the other hand, there are plenty of theses types of stocks that trade strictly in Canada, so make sure you check this out before you invest any money.
  5. Exchange Traded Funds - Research any ETF dividend paying stocks that include companies from Canada. Using ETF's (exchange traded funds) to research potential dividend paying stocks is a smart strategy that will save you time. Since much of the research has already been done by the manager controlling the ETF, you can leverage this information that can be used to formulate decisions. Be sure not to use this information as your only reason to invest.
Investing in any kind of security can involve risk. However, if you stick with a plan to invest in quality dividend paying stocks, then you have immediately lowered that risk by focusing on companies with cash. If this is your strategy, then be sure to at least consider investing in Canadian dividend paying stocks to diversify your portfolio.


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