Thursday, March 8, 2018

Something to Buy March 2018

There is always something to buy in the stock market. On Tuesday, 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.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying 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 Something to Buy March 2018 Spreadsheet 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 22 stocks in the Consumer Discretionary category. Three of these stocks (14%) are showing as cheap by the historically high dividend yield and they are DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), High Liner Foods (TSX-HLF, OTC-HLNFF) and Newfoundland Capital Corp (TSX-NCC.A). DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), High Liner Foods (TSX-HLF, OTC-HLNFF) were added to this list.

Eleven (or 50%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B, OTC-DIIBF), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP) Newfoundland Capital Corp (TSX-NCC.A), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI). Goeasy Ltd. (TSX-GSY, OTC-EHMEF) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI) were added to this list.

I follow 12 Consumer Staples stocks. No companies are showing as cheap by the historically high dividend yield. Five stocks (or 42%) are showing cheap by historical median dividend yield. These are AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF) has been deleted from this list and AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF) has been added.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.

I follow 10 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Five stocks (or 50%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN, OTC- ARESF); Granite Real Estate (TSX-GRT.UN, NYSE-GRP.U), H & R REIT (TSX-HR.UN, OTC-HRUFF), Melcor Developments Inc. (TSX-MRD, OTC-MODVF) and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF) has been added to the list.

I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Three stock (or 38%) are showing cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), Barclays PLC (LSE-BARC, NYSE-BCS) and CIBC (TSX-CM, NYSE-CM). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) and Barclays PLC (LSE-BARC, NYSE-BCS) have been added to this list.

I follow 14 Financial Service stocks as I am now following Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF). None are showing as cheap by the historically high dividend yield. Nine (or 64%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B, OTC-AGFMF), Alaris Royalty Corp (TSX-AD, OTC-ALARF), Chesswood Group (TSX-CHW, OTC-CHWWF), CI Financial (TSX-CIX, OTC-CIFAF), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF), IGM Financial (TSX-IGM, OTC-IGIFF) and Power Corp (TSX-POW, OTC-PWCDF). Chesswood Group (TSX-CHW, OTC-CHWWF) has been added to this list.

I follow 6 Insurance stocks. None are showing as cheap by the historically high dividend yield. Five stocks (or 83%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), Industrial Alliance Ins. and Fin. (TSX-IAG, OTC-IDLLF), Intact Financial Corp. (TSX-IFC, OTC-IFCZF), Manulife Financial Corp (TSX-MFC, NYSE-MFC) and Power Financial Corp (TSX-PWF, OTC-POFNF). Intact Financial Corp. (TSX-IFC, OTC-IFCZF) has been added to this list.

I follow 32 Industrial stocks. I have one stock less because HNZ Group Inc. (TSX-HNZ, OTC-CDHPF) has been bought out. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change from last month.

I have 7 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 57% are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF). There is no change from last month.

I follow 16 Services stocks. I have one stock less because HNZ Group Inc. (TSX-HNZ, OTC-CDHPF) has been bought out. None are showing as cheap by the historically high dividend yield. Five stocks or 31% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA), Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). Wajax Corp (TSX-WJX, OTC-WJXFF)) has been added to cheap by historically median dividend yield list.

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. Two stocks or 25% are showing as cheap by historical median dividend yield. They are Barrick Gold Corp. (TSX-ABX, NYSE-ABX) and Methanex Corp (TSX-MX, NASDAQ-MEOH).

I follow 10 Energy stocks. Three stocks or 30% are showing as cheap by the historical high dividend yield. They are Mullen Group (TSX-MTL, OTC-MLLGF), Ensign Energy Services (TSX-ESI, OTC-ESVIF) and Suncor Energy (TSX-SU, NYSE-SU). Ensign Energy Services (TSX-ESI, OTC-ESVIF) and Suncor Energy (TSX-SU, NYSE-SU) have been added to this list. There are five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). This last list has not changed from last month.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), Maxar Technologies Ltd (TSX-MAXR-NYSE-MAXR) and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). This has not changed from last month.

I follow 7 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Four stocks (or 57%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB), Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF) and TransCanada Corp (TSX-TRP, NYSE-TRP). This has not changed from last month.

I follow 12 of the Power type utility companies. ATCO Ltd (TSX-ACO.X, OTC-ACLLF) is showing as cheap by the historically high dividend yield. Five stock (or 42%) are showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Emera Inc. (TSX-EMA, OTC-EMRAF) and Fortis Inc. (TSX-FTS, OTC-FRTSF) Just Energy Group Inc. (TSX-JE, NYSE-JE) has been removed from this list.

I follow 4 of the Telecom Service type utility companies. No stock is show as cheap by the historical high dividend yield. Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) has been removed from this list. Three stocks (or 75%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change on this last list.

On my other blog I wrote yesterday about H & R Real Estate Trust)... learn more. Next, I will write about Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF)... learn more on March 9, 2018 around 5 pm.

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. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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