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Income Production

Here is a list of solid income-producing trusts and corporations with which I have experience, that have monthly or quarterly distributions greater than any interest-paying bank that I know of and are easily acquirable. For Canadians at least, these can all be purchased through your broker. The distributions have been reliable over the period that I have followed them at least (i.e., distributions every month or every quarter).

All of these can be traded on the Toronto Stock Exchange (TSE). For discussion or updates not shown here, check my blog.

Note that the yields shown below are the effective base yields (i.e., neglecting special distributions during the year) and are attainable if one were to acquire units at the prices shown below. No assumptions, considerations or adjustments have been made regarding present or future income tax, although this may be included in future updates to this page. The distributions from the income trusts are raw present income distributed to the investor who, in a worst-case scenario, would pay tax as though the income were pure interest.The dividends from the corporations are treated as dividends.

2006-Sep-30: added Shiningbank Energy Income Fund (SHN.UN) to this list.

2006-Oct-31: Halloween Treat - Canada's Finance Minister sliced a large portion (C$30+ billion) from the value of the income trust holdings in investors' portfolios by changing the tax rules. As of 2006-Dec-15, with no further clarification as yet from the minister, no reductions in distributions have been announced for the trusts shown here.

2007-Jul-11: Shining Bank Energy Income Fund merged with PrimeWest Energy Trust.

2008-Mar-24: added Foremost Industries Income Fund to the list. Foremost has been listed on the TSX as an income fund since 2001-Dec-31 and has paid distributions quarterly since then without fail (2001 - $1.00, 2002 - $0.70, 2003 - $0.80, 2004 - $1.35, 2005 - $0.57, 2006 - $1.45, 2007 - $1.60, 2008/Q1 - $0.25). This fund has grown quickly in the last 6 or so years and appears to be managed very well.

2008-Dec-15: Sentry Select Diversified Income Trust (TSX:SDT.UN) announces distribution guidance for 2009, reducing monthly distributions to 0.026 per unit per month.

2009-Jan-4: Although the market prices for these income funds have been slowly returning, there is still a good opportunity to acquire cheap high income-generators such as those shown here, which all exhibit solid performance and reliable distributions with very few downward adjustments over the years that I have followed their progress.

2009-Aug-14: Sentry Select Diversified Income Fund converted from a closed-end fund (SDT.UN) into a mutual fund (NCE1032).

2010-Feb-4: Canwel Building Materials Income Trust converted from a trust (CWX.UN) into a corporation known as Canwel Holdings Corp (CWX).

2010-Nov-1: Yellow Pages Income Fund converted from a trust (YLO.UN) into a corporation known as Yellow Media Inc (YLO).

2010-Dec-15: Foremost Industries Income Fund voluntarily delisted and wound down.

2011-Jan-1: Badger Income Fund converted (BAD.UN) from a trust into a corporation known as Badger Daylighting Ltd (BAD).

2011-Jan-1: Rogers Sugar Income Fund converted (RSI.UN) from a trust into a corporation known as Rogers Sugar Inc (RSI).

2011-Jan-3: Penn West Energy Trust converted from a trust (PWT.UN) into a corporation known as Penn West Petroleum Ltd (PWT).

Fund/Corporation
Symbol
Unit Price (2011-02-11)
Present Annual Distr., $C
% Yield (of 2011-02-11 price)
Approximate distr. date
months followed
Sentry Select Diversified Inc Fund NCE1032 4.31 0.31 7.2 30th of month 96
Rogers Sugar Inc RSI 5.63 0.34 6.0 30th of month 83
Yellow Media Inc YLO 6.01 0.65 10.8 15th of month 69
Canwel Holdings Corporation CWX 5.25 0.40 7.6 15th of every 3rd month 68
Penn West Petroleum Ltd PWT 26.45 1.08 4.1 15th of every 3rd month 55
Cominar Real Estate Inv Trust CUF.UN 21.52 1.44 6.7 15th of month 61
Boston Pizza Royalty Inc Trust BPF.UN 14.57 1.01 6.9 30th of month 60
Badger Daylighting Ltd BAD 20.92 1.02 4.9 15th of month 59
Foremost Inc Fund delisted n/a n/a n/a n/a n/a

If you would like to try linking to a spreadsheet with more up-to-date information, please click here for a new browser window with a viewable spreadsheet for these trusts and corporations.

As one can see from the table, these trusts and corporations, are very good income producers. I understand that some investors are nervous when "trust" is mentioned, but in the meantime, the distributions provide good yields. Investing in these companies would give income generated from the sale of building materials, commodities, energy, real estate, advertising, etc. thus giving some capital stability while providing healthy distributions throughout each month from the profitable underlying companies.

Having said that, Sentry Select Diversified Income Fund shown above is significantly different from the others listed in that the fund's holdings are already diverse, being invested in energy, resources, power, utilities, consumer, industrials, securities, real estate and bonds. The excellent management of the NCE1032 portfolio has resulted in good, reliable performance for many years. This certainly makes one believe that they should hold as many units of this mutual fund as possible. The fund also offers a good DRIP (Dividend reinvestment Program) which provides a further bonus of no trading fees for unit acquisition. Yellow Media Inc also provides a DRIP program.

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