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.
The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.
For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.
However, no system is perfect. But if you are interested in buy a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.
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.
Of the consumer discretionary stocks, Canadian Tire Corporation (TSX-CTC.A), Dorel Industries (TSX-DII.B A) and Newfoundland Capital Corp (TSX-NCC.A) are showing as relatively cheap by the historical average dividend yield as well as cheap by historical median and 5 year median dividend yields.
Another consumer discretionary stock is showing as cheap by the historical median and 5 year median dividend yields is Goodfellow Inc. (TSX-GDL). Also Leon's Furniture (TSX-LNF) and Thomson Reuters Corp (TSX-TRI) are showing as cheap by the historical median dividend yield. (Note I just added in historical median dividend yield this month. The median values can be different than average values and sometimes a better value to work with.)
Some Consumer Staple stocks are showing as relatively cheap. Jean Coutu Group Inc. (TSX-PJC.A) is cheap by the historical average and the historical median dividend yields. Loblaw Companies (TSX-L) is showing as cheap only by the historical median dividend yield. Rogers' Sugar (TSX-RSI) is cheap using the 5 year median dividend yield.
The US Health Care stocks I follow, that is Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT) are both relatively cheap by the historical average and historical median dividend yields.
Of the Real Estate Stocks, Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD) are showing relatively cheap by the historical average and the historical median dividend yields. Melcor Developments Inc. (TSX-MRD) is also showing as relatively cheap by the 5 year median dividend yield.
The Canadian banks of Bank of Nova Scotia (TSX-BNS) National Bank of Canada (TSX-NA), Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD) are showing as relatively cheap by the historical median and the 5 year median dividend yields. Bank of Nova Scotia (TSX-BNS) and Toronto Dominion Bank (TSX-TD) are also showing as cheap by the historical average dividend yield.
Of the Financial Services stocks, AGF Management (TSX-AGF), CI Financial (TSX-CIX), DirectCash Payments Inc. (TSX-DCI), Gluskin Sheff & Associates Inc. (TSX-GS), Home Capital Group (TSX-HCG), IGM Financial (TSX-IGM), Power Corp (TSX-POW) and TMX Group (TSX-X) are showing as relatively cheap by the historical median dividend yield. Of these, only CI Financial (TSX-CIX), Home Capital Group (TSX-HCG), IGM Financial (TSX-IGM) and Power Corp (TSX-POW) are showing as cheap by the historical average dividend yield.
Of the above Financial Services stocks DirectCash Payments Inc. (TSX-DCI), Gluskin Sheff & Associates Inc. (TSX-GS), Home Capital Group (TSX-HCG), IGM Financial (TSX-IGM), are showing as relatively cheap by the 5 year median dividend yield.
Of the Insurance group Great-West Lifeco Inc. (TSX-GWO, Manulife Financial Corp (TSX-MFC), Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF) are showing as relatively cheap by the historical median dividend yield. Of the above group only Power Financial Corp (TSX-PWF) is showing as relatively cheap by the historical average dividend yield.
Of the industrials Bombardier Inc. (TSX-BBD.B), Finning International Inc. (TSX-FTT), Hammond Power Solutions Inc. (TSX-HPS), and Pason Systems Inc. (TSX-PSI) are showing as cheap historically. Canadian National Railway (TSX-CNR), Canam Group Inc. (TSX-CAM), Canexus Corporation (TSX-CUS), Canyon Services Group (TSX-FRC), McCoy Global Inc. (TSX-MCB), Mullen Group (TSX-MTL), PFB Corp (TSX-PFB), Russel Metals (TSX-RUS), SNC-Lavalin (TSX-SNC), Toromont Industries Ltd. (TSX-TIH), Transcontinental Inc. (TSX-TCL) and Wajax Corp (TSX-WJX) are showing as cheap by the historical median dividend yields.
Of the above stocks, only Canexus Corporation (TSX-CUS), Mullen Group (TSX-MTL), PFB Corp (TSX-PFB), Russel Metals (TSX-RUS), SNC-Lavalin (TSX-SNC) and Transcontinental Inc. (TSX-TCL) are showing as cheap by the historical average dividend yields. Also, Pulse Seismic Inc. (TSX-PSD) is showing as cheap by historical average, but not historical median dividend yield.
Of the industrials, also Exchange Income Corp (TSX-EIF) and Stantec Inc. (TSX-STN) are the only just showing as cheap by 5 year median dividend yield.
There are not many companies in the Tech sector, but Calian Technologies Ltd (TSX-CTY), Computer Modelling Group Ltd (TSX-CMG), and Evertz Technologies (TSX-ET) are showing as relatively cheap by the historical median dividend yield. Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET) are also showing cheap by the historical average dividend yield.
A number of energy stocks also seem cheap. 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 still showing as relatively cheap historically.
Crescent Point Energy Corp (TXS-CPG), Encana Corp (TSX-ECA), Husky Energy (TSX-HSE) and Penn West Petroleum (TSX-PWT are showing as cheap by the historical median and the historical average dividend yields..
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 and the historical median dividend yields.
The infrastructure type utility companies only Enbridge Inc. (TSX-ENB) is showing relatively cheap by the 5 year median. The only utility companies that is showing as cheap, is TransAlta Corp (TSX-TA) which is showing as relatively cheap by the historical average and the historical median dividend yields and ATCO Ltd (TSX-ACO.X) which is showing relatively cheap by the 5 year median.
Of the Telecom Stocks WiLan Inc. (TSX-WIN) is showing as relatively cheap historically. Shaw Communications Inc. (TSX-SJR.B) and Manitoba Telecom (TSX-MBT) are showing as relatively cheap by the historical average and the historical median dividend yields..
On my other blog I am today writing about AGF Management Ltd. (TSX-AGF.B, OTC-AGFMF) ... 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.
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