Thursday, April 5, 2018

Something to Buy April 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 April 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). There is no change from last month.

Seven (or 32%) 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), Goeasy Ltd. (TSX-GSY, OTC-EHMEF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF). Dorel Industries (TSX-DII.B, OTC-DIIBF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP) and Thomson Reuters Corp (TSX-TRI, NYSE-TRI) have been deleted from this list.

I follow 12 Consumer Staples stocks. No companies are showing as cheap by the historically high dividend yield. Six stocks (or 50%) are showing cheap by historical median dividend yield. These are AGT Food and Ingredients Inc. (TSX-AGT, OTC-AGXXF), Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), 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 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. Four stock (or 50%) are showing cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM) National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Barclays PLC (LSE-BARC, NYSE-BCS) has been deleted and National Bank of Canada (TSX-NA, OTC-NTIOF) and Toronto Dominion Bank (TSX-TD, NYSE-TD) have been added.

I follow 14 Financial Service stocks. 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), Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF), 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 deleted from this list and Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) has been added.

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). There is no change from last month.

I follow 32 Industrial stocks. 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. Three stocks or 43% 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. None are showing as cheap by the historically high dividend yield. Three stocks or 19% 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) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Wajax Corp (TSX-WJX, OTC-WJXFF) and Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA) have been deleted from this list.

I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. No stocks are showing as cheap by historical median dividend yield. Barrick Gold Corp. (TSX-ABX, NYSE-ABX) and Methanex Corp (TSX-MX, NASDAQ-MEOH) have been removed from this list.

I follow 10 Energy stocks. Two stocks or 20% are showing as cheap by the historical high dividend yield. They are Mullen Group (TSX-MTL, OTC-MLLGF) and Ensign Energy Services (TSX-ESI, OTC-ESVIF). Suncor Energy (TSX-SU, NYSE-SU) have been deleted from 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. Four stocks (or 50%) 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) and Maxar Technologies Ltd (TSX-MAXR-NYSE-MAXR). Sylogist Ltd (TSXV-SYZ, OTC-SYZLF) has been deleted from this list.

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. Only ATCO Ltd (TSX-ACO.X, OTC-ACLLF) is showing as cheap by the historically high dividend yield. This has not changed from last month.

Five stock (or 42%) are showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Emera Inc. (TSX-EMA, OTC-EMRAF), Fortis Inc. (TSX-FTS, OTC-FRTSF) and Just Energy Group Inc. (TSX-JE, NYSE-JE). Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN) has been removed from this list and Just Energy Group Inc. (TSX-JE, NYSE-JE) has been added to this list.

I follow 4 of the Telecom Service type utility companies. No stocks are showing as cheap by historically high dividend yield. 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 from last month.

On my other blog I wrote yesterday about Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)... learn more. Next, I will write about Russel Metals Inc. (TSX-RUS, OTC- RUSMF)... learn more on Friday, April 6, 2018 by 11 am.

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.

7 comments:

  1. I was wondering if Emera tsx belonged in the group of "cheap by historical high dividend yeild, or cheap by historical median dividend yeild. It is listed in both groups. Also, I was wondering which group BCE, telus and Shaw belong in. They are also listed in both groups (cheap by historical high dividend yield and cheap by historical median dividend yeild.
    Thanks

    ReplyDelete
  2. They can be in both groups if the stock is really cheap. However, I did make a mistake on Emera and it is only cheap by historical median dividend yield and the Telecoms are only cheap by by historical median dividend yield.

    I have fixed my report accordingly.

    ReplyDelete
  3. Thanks for the excellent information.

    ReplyDelete
  4. There are so many nice utilities on the TSX. I noticed you have stopped following AQN - tragic, as I like them. Do you like Northland power? Pays 5.3%, 22% stock appreciation over 5y. Whoops, payout 117%!

    ReplyDelete
    Replies
    1. I am still following AQN. It is just not mentioned as it is not relatively cheap.

      I last reviewed Northland Power Inc. (TSX-NPI, OTC-NPIFF) here on Friday, December 8, 2017 around 5 pm.

      Susan

      Delete
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