Dividend Investing = Smart Investing The strength of companies that pay dividends has made them a key focus of the McCreath Group’s investment strategy for long-term growth. Historically, dividends have accounted for a large part of the total return for stocks. Here are four benefits of investing in dividend-paying stocks that we feel are most important:
Cash Flow for Reinvestment or Income: When you’re receiving a regular dividend payment you can reinvest that money or you can use it to fund living expenses.
Tax Benefits: From a tax perspective, dividends from Canadian companies are hard to beat. Taxable dividends received by Canadian resident individuals from Canadian resident corporations are taxed at lower rates through the Dividend Tax Credit (DTC).
Stability During Market Volatility: When stock markets are under pressure and share prices decline, stocks that pay dividends are often more stable and are the first to recover.
Management Discipline: When a company is paying a dividend to its shareholders, it requires management discipline.
McCreath Group clients own a variety of companies that have increased their dividends on an annual basis.