A split share is where a company issues two classes of shares. The capital shares get all or most of the capital gains and losses; the preferred shares get most of the dividend income.
For example, Dividend 15 Split Corp, symbol DFN on Toronto, is a split-share company that holds shares of 15 companies. These include: Bank of Montreal, BCE, TD Bank, TransCanada Corp., Telus, Enbridge and others. Dividend 15 Split Corp. has two share classes: Dividend 15 Split Corp. capital shares (Toronto symbol DFN), and Dividend 15 Split Corp. preferred shares (Toronto symbol DFN.PR.A).
We may like a lot of the stocks that a split share company holds-but our view is that it’s a rare investor who needs dividend income but not capital gains, or vice versa. We think you are better off investing directly in the underlying firms. That way you’ll avoid the yearly management fees and other costs.
We think split share companies just turn good investments into speculations. You get all the risk of an equity investment, but none of the long-term security of owning a stock. Avoid both classes of split shares.
At TSI Network, we recommend using our three-part Successful Investor philosophy:
Discover how to put an extra strength in your portfolio with our specific advice on how to identify high-quality dividend stocks. It’s all in our report, Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing. And it’s yours FREE!
Split-share corporations come with inherent drawbacks that can hand investors unexpected and unwelcomed costs sooner than they’d planned
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A: M Split Corp is a split-share company that holds a substantial block of shares of Manulife Financial, a leading Canadian insurer.
Manulife is a buy recommendation of our Canadian Wealth Advisor newsletter.
“Split corps” are a type of investment product that financial institutions create to provide… Read More
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A: Dividend 15 Split Corp., $10.88, symbol DFN on Toronto (Shares outstanding: 31.6 million; Market cap: $343.8 million; www.dividend15.com), is a split-share investment corporation that holds shares of 15 companies: BCE Inc., CI Financial Corporation, Bank of Nova Scotia, Thomson Reuters, National Bank of Canada,… Read More
A: Dividend 15 Split Corp., $10.85, symbol DFN on Toronto (Shares outstanding: 34.7 million; Market cap: $376.5 million; www.dividend15.com), is a split-share investment corporation that holds shares of 15 companies: BCE Inc., CI Financial Corporation, Bank of Nova Scotia, Thomson Reuters, National Bank of Canada,… Read More
In the fifth in our series on RRSPs, we explain how taking cash out of your RRSP can be turned into an opportunity to make your portfolio within the plan even stronger.
In last week’s article on registered savings plans (Three ways to make the… Read More
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As we stated in last week’s article on RRSPs (What you need to know to build… Read More
Every Monday we feature “A Stock to Sell” as our daily post. With every stock or investment we recommend as a sell, we give you a full explanation of why we advise against investing in it at this time. This week, we… Read More
Canadian Banc Corp. is a split-share company with two types of stock: capital shares ($12.85, symbol BK on Toronto) and preferred shares ($10.26, symbol BK.PR.A on Toronto).
The company holds shares of the six biggest Canadian banks.
Split-share companies typically issue two classes of stock. Usually the… Read More
Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' FREE Special Report from The Successful Investor.
How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.
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