Make Money in Stocks

To make money in stocks, first you have to ignore all the people that tell you that you can earn lots of money in a hurry. What all these people want do is sell you their newsletters. Investment newsletter can be quite expensive. That is how the purveyors of newsletters make their money. They do not make it investing. Making money from stocks is a patient game.

Since an email address is on my blog I get all sorts of emails telling me I could make zillions of dollars by buying the investment newsletters of the email sender. There is a lot of stuff that just goes directly to my junk mail file. The people sending these emails could not have read anything on my blog. If they had they might have come to the conclusion that I do my own research on what I buy.

I would recommend few investments newsletters. I had one the other day that starts with how they made over 206.81% in 2 months by investing in Unipixel Inc. (UNXL). This goes to Junk mail. Sometimes people are lucky, especially in an up market. Almost anyone can be an investment genius in an up market. What really counts is how you do when the market crashes. I have been through a number of these and with a solid portfolio I come out just fine on the other side.

What I have done is buy blue chip dividend growth companies and hold them for the long term.

On my other blog I am today writing about Magna International Inc. (TSX-MG, NYSE-MGA) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Investors and Traders

The Buy and Sell Advisor had an interesting article call Investor Thinking versus Trader Thinking, When to Buy and Sell. The author of this piece, Ken Norquay, thinks we should all think like Traders.

He thinks that investor rely mostly on their advisors and on the merits of their investments whereas Traders rely on their own plans and the merits of their trading system. He thinks that traders are less willing to take risk than investors.

I approach trader versus investor quite differently. Sometimes I am an investor and sometimes I am a trader. It depends on the stock. If the stock is a resource stock or one that goes up and down, but nowhere else, I am a trader.

In the main part, I am an investor. I ride the markets up and downs. I certainly did not learn the same lesson the author did from the tops in 2000 and 2008. He says "The lesson we should have learned at the stock market tops in 2000 and 2008 is that holding stocks through a downtrend is financial suicide." The thing is I did quite well through these problem periods.

I decide when I buy a stock whether it is an investment stock or a capital gain stock (i.e. trading stock).

On my other blog I am today writing about Methanex Corp. (TSX-MX, NASDAQ-MEOH) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

10 Best Canadian Stocks

The Motley Fool has just published an article by Matt DiLallo called The 10 Best Stocks in Canada. It is basically a list of the best-performing Canadian stocks of the past decade.

#	Company	Sym.	Div. Adj. 10 Yr. Ret.	Current Market Cap	Div.
1.	Catamaran Corporation	CCT	4099%	$11.9 billion	No
2.	Computer Modelling Group Ltd.	CMG	3570%	$929 million	3.38%
3.	Absolute Software Corporation	ABT	2708%	$350 million	3.43%
4.	Stella-Jones Inc.	SJ	2409%	$2.3 billion	0.84%
5.	Pacific Rubiales Energy Corp.	PRE	2218%	$2.2 billion	10.97%
6.	New Look Eyewear Inc.	BCI	1839%	$300 million	2.74%
7.	Intrepid Mines Limited		1788%	$142 million	n/a
8.	Equity Financial Holdings Inc.	EQI	1463%	$89 million	No
9.	Neptune Technologies & Bioressources, Inc.	NTB	1387%	$169 million	No
10.	MTY Food Group Inc.	MTY	1292%	$650 million	0.99%

This data is from S&P Capital IQ. The Market caps are in U.S. dollars. Returns are as of market close on Dec. 17, 2014.

Catamaran Corporation (TSX: CCT) is in the Health Care industry. A recent price was $58.28 and it has no dividends. It was formerly SXC Health Solutions Corp. and is a provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. I am not interested in a company that pays no dividends.

Computer Modeling Group (TSX: CMG) is in the Software industry. A recent price was $11.85 with a dividend yield of 3.38%. It develops reservoir simulation software for oil and gas companies. This is a company I know and hold.

Computer Modelling Group Ltd. is a dividend growth company and dividend growth over the past 5 and 10 years is at 23% and 38% per year. The last dividend increase was for June 2014 and was a 5.3% increase.

Absolute Software Corporation (TSX: ABT) is in the Software industry. A recent price was $8.16 with a dividend yield of 3.43%. It is a provider of endpoint firmware-persistent security and management solutions for computing devices such as computers, tablets and smartphones.

Absolute Software just started paying dividends in 2013. They doubled the dividend for 2014 and for 2015 there is an increase in dividends of 20%. This is a company of the above I might be interested in.

Stella-Jones (TSX: SJ) is in the Wood Products industry. A recent price was $33.31 with a dividend yield of 0.84%. It is the leading manufacture of pressure treaded wood products in North America. This is a company I follow. It is one of the only two I know about on this list.

On Stella-Jones Inc. dividends have grown at 19% and 26% per year over the past 5 and 10 years. The last dividend increase was for 2014 and it was for 40%.

Pacific Rubiales Energy Corp. (TSX: PRE) Oil & Gas Exploration and Production industry. A recent price was $7.48 with a dividend yield of 10.97%. It is a producer and seller of natural gas and heavy crude oil. The Company also purchases crude oil from third parties to be used as diluents and for trading purposes.

Pacific Rubiales Energy Corp. just started to pay dividends with one quarterly dividend in 2010. Dividend growth over the past 3 years is at 21% per year. The last dividend increase was for 2014 and it was at 9.1%. I am not much interested in oil and gas stocks. They are very risky.

New Look Eyewear Inc. (TSX: BCI) is in the Health Care industry. A recent price was $21.90 with a dividend yield of 2.74%. It is a provider of eye care products and services in Eastern Canada.

New Look Eyewear Inc. is another old income trust company. Dividends declined by 58% in 2010 when it changed to a corporation. They increased the dividends back to the old 2009 level on 2011 and they have not changed since. There are 4 analysts following this stock, but none address dividends. As an income trust they did raise dividends. This stock might be interesting if they start to raise their dividends again.

Intrepid Mines Limited (AUX: IAU) is in the Metals and Mining industry. It is an Australia-based precious metals developer and explorer with operations in Indonesia. As far as I can see it is not currently listed on the TSX as it was dropped in July 2014. It is traded on the Australian exchange (ASX-IAU). The TSX delisted this company because the Company does not currently have a material mining asset in its portfolio.

Equity Financial Holdings Inc. (TSX: EQI) is in the Financial Services industry. A recent price was $9.35 and it has no dividends. It is a financial services company serving the corporate and institutional markets, and the retail mortgage market. I am not interested in a company that pays no dividends.

Neptune Technologies & Bioressources Inc. (TSX: NTB) is in the Health Care Industry. A recent price was $2.22 and it has no dividends. It is a biotechnology company. The Company is engaged primarily in the development, manufacture and commercialization of marine-derived omega-3 polyunsaturated fatty acids (PUFAs). I am not interested in a company that pays no dividends.

MTY Food Group Inc. (TSX: MTY) is in the Restaurant Industry. A recent price was $34.25 with a dividend yield of 0.99%. It franchises and operates quick-service restaurants under multiple banners, which include Tiki Ming, Sukiyaki, La Cremiere, Au Vieux Duluth Express, Carrefour Oriental, Panini Pizza Pasta, Chick 'N' Chick, Franx Supreme, Croissant Plus, Villa Madina, Cultures, Thai Express, Mrs. Vanelli's, Kim Chi, TCBY, Yogen Fruz, Sushi Shop, Koya Japan, Vie & Nam, Tandori, O'Burger, Tutti Frutti, Taco Time, Country Style, Bunsmaster, Valentine, Jugo Juice, Mr. Sub and Koryo Korean BBQ.

MTY Food Group Inc. started to pay dividends with one quarterly dividend in 2010. Dividends have increased by 25% per year over the past couple of years. The last dividend increase was for 2014 and increase was at 21.4%. However, dividend yield is below 1% so I am not really interested in this stock.

On my other blog I am today writing about Stantec Inc. (TSX-STN, NYSE-STN) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Ensign and Mullen

A good reason to sell a stock is if you like another stock better. I was looking to buy a stock I already owned in my Trading Account of which I did not have much of. I was looking at Ensign Energy Services (TSX-ESI), which I have been buying lately, but I had just reviewed Mullen Group Ltd. (TSX-MTL) and I liked Mullen better. I realized that I will book a loss for Ensign and if I held on to it, I would not have a loss. However, I see no problem is buying and selling when both stocks are relatively low.

Although they do not seem to be direct competitors, they both provide services for the oil and gas industry. The main reasons I liked Mullen better was the great Liquidity Ratio. So I decided to analysis the stocks further. The oil and gas industry is not doing well currently because of the relatively low price of oil.

Below is my chart and the items are explained below:

Item	Ensign	Pt	Mullen	Pt
Liquidity Ratio	Below 1.00	-1	Very good	1
Other Debt Ratios	Good	1	Good	1
Dividend Growth Company	Yes	1	Yes	1
Dividend Yield	4.50%		5.64%	1
5 Year Median Div Yield	2.55%		4.44%	1
Dividend Payout Ratios	Better	1
Dividend Growth 5 years	Better	1
Dividend Growth 10 years			Better	1
Dividend Increase 2014	Yes,	1	No, but scores for smart decision	1
Could Cut Dividend			Possible	-1
Total Return			Better	1
Revenue growth			Lately, Mullen Better	1
EPS to end of 2013			Better	1
EPS to end of 2014			Better, especial over past 5 years	1
CFPS to the end of 2013	Better	1
CFPS to the end of 2014	Better	1	But not by much	1
ROE 10 years above 10%	Better	1
ROE 5 years above 10%			Better	1
ROE 5 year median	8.2%		Better 15.8%	1
Comp Inc. ROE to Net Inc.,	Higher, confirms EPS	1	same	1
ROE Comp Inc. 5 yr. median	8.7%		15.8%
Survive low Liquidity Ratio	Possibly not
Survive Dividend Cut			Yes
Insider Ownership	Yes, Chairman 16.7%	1	Yes, Chairman 3.2%	1
Score		9		14

The first thing I like about Mullen is the Liquidity Ratio which is at 2.79. This is compared with Ensign's ratios at 0.89. Ensign's ratio rises to 1.47 with cash flow less dividends. This is still lower than the 1.50 I would prefer for this ratio. However, the fact remains that good Liquidity Ratios help companies survive in the bad times. In the business these companies are in, being able to survive the bad times is a great plus. Mullen scores here.

The Debt Ratios are good for both these companies with Ensign at 2.31 and Mullen at 2.38. Also the Leverage and Debt/Equity Ratios are good for both these stocks with Ensign at 1.76 and 0.76 respectively and Mullen at 1.73 and 0.73 respectively. I looked at Goodwill and Intangible assets and both companies are good here. Both companies do well here.

Ensign has moderate dividends with moderate growth over the past 5 years and good growth over the past 10 years. The current dividend yield is 4.50% but its 5 year median yield is 2.55%. The dividend growth on Ensign is 5.8% and 14.11% per year over the past 5 and 10 years. Mullen currently has a high dividend yield and very good increases. The current dividend yield is 5.64% with a 5 year median of 4.44%. There are a lot of studies that suggests that stocks with higher dividend yields to better over the long term. Mullen does well on higher dividend yield.

Mullen used to be an income trust and did increase and then decrease their dividends going into and out of an income trust. The dividends were increased by 305% to be an income trust and then decreased by 75% when going to a corporation. The 5 and 10 years growth is a negative 5.59% and a positive 26.05% over the past 5 and 10 years. However, if you look at the past 4 years, dividends have climbed by 24.5%. When all is said and done, Mullen probably has better dividend increases.

With Mullen's higher dividends come higher Dividend Payout Ratios. Their 5 year median DPR for EPS and CFPS was at 61% and 33%. The DPRs for 2013 was at 86% and 55%. For Ensign they have 5 year median DPRs for EPS and CFPS at 41% and 15%. The DPRs for 2013 was at 52% and 15%. Ensign certainly does better on DPRs.

For the year 2014, Ensign has increased the dividend by 6.8% but Mullen has done no increases. It is expected that Ensign will have Dividend Payout Ratios of 51% and 15% for EPS and CFPS in 2014. It is expected that Mullen will have Dividend Payout Ratios of 100% and 47% for EPS and CFPS in 2014. Mullen's DPR is expected to go down after 2014.

However, this brings up the possibility of the connection between high DPRs and cutting of dividends. Mullen could be at risk to cut dividends. However, Ensign's low Liquidity Ratio could get it into trouble. Neither company wins here.

Mullen is wise to have no dividend increase in 2014 because of the DPR. I like companies that do the right thing when it comes to dividends. They say they want to have sustainable dividends and they also need cash flow for investment purposes. Mullen certainly scores for making a tough decision and the right one.

The next thing to mention is that I bought Ensign in 2012 and some more in 2013. I have a total return of a negative 17.64% per year. If I had made the same purchases of Mullen, my total return would be a negative 3.10% per year. My total actual loss would have been 26.02% for Ensign. The potential loss for Mullen would have been 4.74%. The above values include dividends. Mullen would score here.

Just looking at the stock prices without the dividends, my loss on Ensign is 20.61% per year or a total capital loss of 30.97%. My loss on Mullen would have been 7.65% per year or a total capital loss of 12.06%.

The Mullen Group has issued stock so their outstanding shares have increased by 7.3% and 2.4% per year over the past 5 and 10 years. This makes their per share values more important. Ensign has not changed their outstanding shares. They both have done Buy Backs of shares.

Revenues growth is important as it is revenue growth that will ultimately drive earnings and cash flow growth. For Ensign, the Revenue per Share is moderate to good with growth at 1.3% and 8.3% per year over the past 5 and 10 years. For Mullen, the Revenue per Share growth is non-existent to moderate with growth a decline of 0.6% and growth at 5.3% per year over the past 5 and 10 years.

Because using an exact number of years does not tell the whole story. In some industries growth can be volatile so looking at the 5 and 10 year growth using 5 year running averages can tell a more complete story. Here Ensign still does better with growth at 2.4% and 9.5% per year over the past 5 and 10 years. However, Mullen shows rather similar results with growth at 3.45 and 6.8% per year. Both companies are growing revenue with Ensign doing better over the past 10 years and Mullen doing better over the past 5 years. If it comes down to what have you done for me lately, then Mullen is ahead here.

The next question is can they translate revenue growth into earnings growth. Ensign had a big EPS decline in 2013 but things are expected to improve somewhat in 2014. EPS growth is down by 12.9% and up by 2.7% per year over the past 5 and 10 years. If you use 5 year running averages, this improves somewhat to a decline of 6.5% and growth of 7.9% per year over the past 5 and 10 years.

For Mullen, EPS grew a bit in 2013 but are expected to decline by 24% in 2014. To the end of 2013, EPS are up by 2.3% and 7.8% per year over the past 5 and 10 years. If you look at 5 year running averages, this improves greatly to growth of 8.7% and 8.4% per year over the past 5 and 10 years. Mullen is better when it comes to EPS growth.

Analysts' estimates tend to improve as we get closer to reporting dates. If we use 2014 estimates for these stocks we find that Ensign's EPS is up by 2.3% and 1.8% per year over the past 5 and 10 years. Using 5 year running averages EPS is down by 6.2% and up by 5.9% per year over the past 5 and 10 years. Here Mullen's EPS has increased by 1.8% and 1.6% per year over the past 5 and 10 years but using 5 year running averages, growth is at 8.7% and 6.4% per year over the past 5 and 10 years. It would seem that Mullen is growing its EPS better.

Can they translate revenue growth into cash flow growth is my next questions. For Ensign, the 5 and 10 year growth in CFPS is at 1.4% and 9.5% per year. If I use 5 year running averages the growth is better at 3.5% and 12.4% per year over the past 5 and 10 years. For Mullen growth is not as good especially over the past 5 years. For Mullen, the 5 and 10 year growth in CFPS is at a negative 4.1% and a positive 10.14% per year. If I use 5 year running averages the growth is better at 0.73% and 10.1% per year over the past 5 and 10 years. Ensign is better here.

If we use analysts' estimates for CFPS, I find that Ensign's growth is at 13.3% and 9.6% per year over the past 5 and 10 years and using 5 year running averages, growth is 4.9% and 11.5% per year. I find that Mullen's growth is at 11.2% and 5.12% per year over the past 5 and 10 years and using 5 year running averages, growth is 2.5% and 9.2% per year. Ensign does better here, but not by much.

When I look at Return of Equity, I find that for Ensign the ROE was below 10% 3 times in the past 10 years, and 3 times in the past 5 years. For Mullen the ROE was below 10% 4 times in the past 10 years and 2 times in the past 5 years. The ROE for Ensign in 2013 is 6.6% and it has a 5 year median value of 8.2%. For Mullen the 2013 ROE is 15.9% and it has a 5 year median of 15.8%. Mullen does better here.

If you compare the ROE on Comprehensive Income, I find that for Ensign the 5 year median ROE is at 8.7% and the 2013 ROE on comprehensive income is 7.8% which is 31.8% higher than the ROE on net income. For Mullen the 5 year median ROE is at 15.8% and the 2013 ROE on comprehensive income is the same as the ROE on net income. They both score here as the ROE on comprehensive income confirms that the net income could be of good quality.

But the ROE on Comprehensive Income for Ensign is just 8.7% with a 5 year median of 8.7%. The one for Mullen is at 15.9% with a 5 year median at 15.8%. Mullen scores here for the higher ROE on comprehensive income.

They both have insider ownership. With both stocks the chairman owns the most. For Ensign the chairman owns shares worth around $423M or 16.7% of the outstanding shares. For Mullen the chairman owns shares worth around $82M and 3.2% of the outstanding shares. They both do well here.

On my other blog I am today writing about Stella-Jones Inc. (TSX-SJ, OTC-STLJF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Dividend Yields

There have been a number of studies that show the higher the dividend yield when you buy a stock, the better the long term gain is. This article from MPL Communications tells the same story along with a lot more information on Dividend paying stocks.

It is interesting that a number of studies show the same sort of results, which is that the higher the yield at the start, the better the stock did in the longer term. I have stocks with low dividend yields and high dividend increases and high dividend yield with low dividend increases and ones in between. What I am going for is a relatively good dividend income increase each year. This is a slightly different thing.

I suspect that the high yields on the stock in Professor Jeremy Siegel study were high because the stock prices were low. This sort of fits into my looking at buying stocks when the relative dividend yield on a stock is more than historical averages or median values.

I do go on about this sort of thing when generally once a month I look at a stock's current dividend yield against its historical and 5 year median dividend yield.

On my other blog I am today writing about Mullen Group Ltd. (TSX-MTL, OTC- MLLGF)) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Warrants

A recent Daily Advisor email talks about warrants. This article is a through review of warrants and if you ever wanted to know what warrants are this is a good, readable explanation.

On my other blog I am today writing about H & R Real Estate Trust (TSX-HR.UN, OTC- HRUFF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Buy Backs

This is an interesting article on Buy Backs from MPL Communications. It talks about the pros and cons to share Buy Backs. This is a subject all shareholders should be interested in.

I am not sure I like stock buy backs. I would rather see a company pay special dividends instead. Buy Backs can hide the fact that outstanding shares have increased due to stock options. They can make it appear than things like EPS is increasing when it is not or not increasing as much as it appears to be increasing.

I certainly do not like it when a company borrows money to do share Buy Backs. This is as bad as borrowing money to pay dividends or distributions.

On my other blog I am today writing about Finning International Inc. (TSX-FTT, OTC-FINGF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Globe & Mail Investors Site

I just noticed that the Globe and Mail has again downsized what they are showing on their site. I do not have a problem with this as I am looking at their investors' site less and less these days. If they think I will subscribe to their site, they probably do not realize how much I can replace all they used to provide with other sites.

I wrote an article in May 2014 pointing out other sites I was also using. See Research Information Sites

On my other blog I am today writing about Finning International Inc. (TSX-FTT, OTC-FINGF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

My computer is in a repair shop

My computer is in a repair shop today, so I do not think I will be doing any post today.

Something to Buy December 2014

There is always something to buy in the stock market. On Monday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

In this spreadsheet I am saying stocks are relatively cheap by comparing the current dividend yield to the historically high dividend yield, the historically average dividend yield and the median dividend yield over the past 5 years. Note that my historical data varies by company.

When I say a stock is showing as relatively cheap historically I mean that the current dividend yield is higher than the historically high dividend yield. When I say that a stock is relatively cheap by the historical average, I mean that the current dividend yield is higher than the historical average dividend yield. When I say a stock is showing as relatively cheap by the 5 year median, I mean that the current dividend yield is higher than the 5 year median dividend yield.

Of the consumer discretionary stocks, Dorel Industries (TSX-DII.B A) is showing as relatively cheap historically. Other consumer discretionary stocks are relatively cheap by the historical average such as Goodfellow Inc. (TSX-GDL), Leon's Furniture (TSX-LNF) and Newfoundland Capital Corp (TYSX-NCC.A).

One Consumer Staple stocks is relatively cheap by the historical average and that is Saputo Inc. (TSX-SAP). Rogers' Sugar (TSX-RSI) is showing as relatively cheap by the 5 year median.

Both the US Health Care stocks I follow, that is Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT) are relatively cheap by the historical average.

Of the Real Estate Stocks, Granite Real Estate (TSX-GRT.UN) is relatively cheap by the historical average and H & R Real Estate Investment Trust (TSX-HR.UN) is showing as relatively cheap by the 5 year median.

Some of the banks still seem to be cheap. These would be Bank of Nova Scotia (TSX-BNS) and Royal Bank (TSX-RY) which are showing as relatively cheap by the historical average.

Of the Financial Services stocks, AGF Management (TSX-AGF) is still showing as cheap historically. CI Financial (TSX-CIX), Home Capital Group (TSX-HCG), IGM Financial (TSX-IGM) and Power Corp (TSX-POW) are showing as relatively cheap by the historical average. None of the Insurance group is show as cheap.

Of the industrials Hammond Power Solutions Inc. (TSX-HPS), PFB Corp (TSX-PFB) and Transcontinental Inc. (TSX-TCL) showing as relatively cheap historically. Also, Bombardier Inc. (TSX-BBD.B), Canam Group Inc. (TSX-CAM), Finning International Inc. (TSX-FTT), Pason Systems Inc. (TSX-PSI), Pulse Seismic Inc. (TSX-PSD) and SNC-Lavalin (TSX-SNC) are showing as relatively cheap by the historical average.

Other industrials are showing as relatively cheap by the 5 year median. They are Canexus Corporation (TSX-CUS), Canyon Services Group (TSX-FRC), Exchange Income Corp (TSX-EIF) and Wajax Corp (TSX-WJX)

There are not many companies in the Tech sector, but Calian Technologies Ltd (TSX-CTY) is showing as relatively cheap historically and Evertz Technologies (TSX-ET) is showing as relatively cheap by the historical average.

A number of energy stocks also seem cheap. Examples are Canadian Natural Resources (TSX-CNQ); Canadian Oil Sands Ltd (TSX-COS), Cenovus Energy Inc. (TSX-CVE), Ensign Energy Services (TSX-ESI) and Suncor Energy (TSX-SU) are showing as relatively cheap historically. Penn West Petroleum (TSX-PWT) is showing as relatively cheap by the 5 year median.

I have two materials stocks and both are showing up cheap. Teck Resources Ltd (TSX-TCK.B) is showing as relatively cheap historically. Barrick Gold Corp. (TSX-ABX) is showing as relatively cheap by the historical average.

The infrastructure type utility companies are not cheap. The only utility companies that is showing as cheap, is TransAlta Corp (TSX-TA) which is showing as relatively cheap by the historical average.

Of the Telecom Stocks Shaw Communications Inc. (TSX-SJR.B) and Manitoba Telecom (TSX-MBT) are showing as relatively cheap by the historical average. WiLan Inc. (TSX-WIN) is showing as relatively cheap historically.

On my other blog I am today writing about Crescent Point Energy Corp. (TSX-CPG, OTC-CSCTF)...continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

Dividend Stocks December 2014

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield. See my spreadsheet at dividend growth stocks that I just updated for December 2014.

On this list,

• I have 13 stocks with a dividend yield higher than the historical high dividend yield,
• I have 37 stocks with a dividend yield higher than the historical average dividend yield and
• 39 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list two months ago,

• I had 10 stocks with a dividend yield higher than the historical high dividend yield,
• I had 46 stocks with a dividend yield higher than the historical average dividend yield and
• 41 stocks with a dividend yield higher than the 5 year average dividend yield.

When I did my list in January 2014,

• I had 9 stocks with a dividend yield higher than the historical high dividend yield,
• I had 45 stocks with a dividend yield higher than the historical average dividend yield and
• 39 stocks with a dividend yield higher than the 5 year average dividend yield.

Of the stock that I follow 13 have raised their dividends since last month. Dividends raises are denoted in green. They are

Canadian Tire (TSX-CTC.A)
CI Financial (TSX-CIX)
Enbridge Income Fund Holdings Inc. (TSX-ENF)
Equitable Group Inc. (TSX-EQB)
Exchange Income Corp (TSX-EIF)

Gluskin Sheff + Associates Inc. (TSX-GS)
Goodfellow Inc. (TSX-GDL)
Home Capital Group (TSX-HCG)
IGM Financial (TSX-IGM)
Inter Pipeline Fund (TSX-IPL)

Savaria Corporation (TSX-SIS)
Superior Plus Corp. (YTSX-SPB)
Telus (TSX-T)

Also, Stantec Inc. (TSX-STN) has a two for one split occurring since I last updated my spreadsheet.

I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical average dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

However, you should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth Stocks . You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies .

On my other blog I am today writing about PFB Corp. (TSX-PFB, OTC-PFBOF) ...continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.