Dividend Day: Labrador Iron Ore Royalty (LIF.T)

While most of my day to day attention is focussed on junior resource stocks - which seem to be holding their own - I also have a few “dividend” payers. Chief among them Labrador Iron Ore Royalties (LIF.T).

I joke about the fact that this is the most boring company in Canada. LIF “provides investors exposure to the iron ore market through its royalty, commission and minority equity interests in Iron Ore Company of Canada, a leading North American producer and exporter of premium iron ore pellets and high-grade concentrate.” It also pays a very good dividend.

This quarter it paid out $0.70 for a 7.114% return, but the dividend has been as high as $2.00 and as low as $0.25 since I have held the company. Not so boring. Since I have held it, LIF has traded below $30 and above $50. Based on my purchase price(s) I have seen just under 10% per annum on the investment.

The iron ore market has its ups and downs. Much depends on the price of pellets in China so, to a degree, LIF is a bet on the Chinese economy. But it is also is, as its website say, exposed to the worldwide iron ore market. Iron ore is not terrifically sexy but it is vital. Demand and price fluctuate but within a fairly narrow range.

My own investment regime is to try to take profits in the juniors and then put about half those profits into more senior dividend paying shares. Over time, the risk profile of my portfolio should get less extreme. Of course, that presumes that there are profits in my batch of juniors, a presumption which requires more than a little faith.

I tend to re-invest the LIF dividends back into LIF. It is annoying that LIF dropped its DRIP program as that means I have to pay the tiny brokerage fee. A few more quarters and my appetite for LIF shares will be sated.

With a bit of luck and the re-opening of the Chinese economy, one of those quarters will have the fun of the super dividend.

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently hold shares in LIF.T and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.]