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 here to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr).. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).
I follow 19 stocks in the consumer discretionary category. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Nine (or 47%) are showing cheap by historical median dividend yield. They are the one stock previously named and Canadian Tire Corporation (TSX-CTC.A); Goodfellow Inc. (TSX-GDL); High Liner Foods (TSX-HLF); Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG0, Molson Coors Canada (TSX-TPX.B); Reitmans (Canada) Ltd. (TSX-RET.A) and Thomson Reuters Corp (TSX-TRI).
Note: Showing Le Chateau (TSX-CTU.A) as cheap last month was a mistake.
I follow 10 Consumer Staples stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 20%) are showing cheap by historical median dividend yield. These are Jean Coutu Group Inc. (TSX-PJC.A) and Loblaw Companies (TSX-L).
I only follow two Health Care stocks and both are US stocks. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT).
I follow 12 Real Estate stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD).
I follow 6 Bank stocks. None are showing as cheap by the historically high dividend yield. Five stocks (or 83%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD).
I follow 12 Financial Service stocks. One is showing as cheap by the historically high dividend yield and that is Home Capital Group. Eight (or 67%) stocks are showing cheap by the historical median dividend yield. These stocks are AGF Management Ltd (TSX-AGF.B); 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 Ltd. (TSX-X).
I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF).
I follow 34 Industrial stocks. Three are now showing as cheap by the historically high dividend yield (or 9%). These stocks are Finning International Inc. (TSX-FTT); Hammond Power Solutions Inc. (TSX-HPS.A) and Pason Systems Inc. (TSX-PSI).
Eleven Industrial stocks (or 32%) are showing cheap by historical median dividend yield. These stocks are Ag Growth International (TSX-AFN); Canadian National Railway (TSX-CNR); Finning International Inc. (TSX-FTT); Hammond Power Solutions Inc. (TSX-HPS.A); HNZ Group Inc. (TSX-HNZ.A); Mullen Group (TSX-MTL); Pason Systems Inc. (TSX-PSI); Russel Metals (TSX-RUS); SNC-Lavalin (TSX-SNC); Toromont Industries Ltd. (TSX-TIH) and Transcontinental Inc. (TSX-TCL.A).
I follow 8 Tech stocks. One is showing as cheap by the historically high dividend yield and it is Calian Technologies Ltd. (TSX-CTY). Three stocks (or 38%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT); Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
I follow 10 Energy stocks. Four Stocks or (40%) are showing as cheap by the historical high dividend yield. They are Canadian Natural Resources (TSX-CNQ); Ensign Energy Services (TSX-ESI); Husky Energy (TSX-HSE) and Suncor Energy (TSX-SU). There are six stocks (or 60%) showing cheap by historical median dividend yield. They are the four above and Cenovus Energy Inc. (TSX-CVE) and Encana Corp (TSX-ECA).
I follow 2 Material stocks. One is showing as cheap by the historically high dividend yield and that is Teck Resources Ltd. It is also the only one that is cheap by historical median dividend yield.
I follow 8 of the infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA); TransCanada Corp (TSX-TRP) and Veresen Inc. (TSX-VSN).
I follow 12 of the power type utility companies. One is now showing as cheap by the historically high dividend yield and that is TransAlta Corp. Three stock (or 25%) are showing cheap by historical median dividend yield. These stocks are the one above plus ATCO Ltd (TSX-ACO.X) and Fortis Inc. (TSX-FTS).
I follow 5 of the Telecom Service type utility companies. One stock (or 20%) is showing cheap by the historical high dividend yield and that stock is WiLan Inc. (TSX-WIN). Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE); Shaw Communications Inc. (TSX-SJR.B); and WiLan Inc. (TSX-WIN).
On my other blog I am today writing about Pason Systems Inc. (TSX-PSI, OTC-PSYTF) ... learn more...
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.
No comments:
Post a Comment