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 it is 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 October 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). Note that my spreadsheet was having problems with stocks that had US dividends and therefore underestimated cheap stocks.
I follow 22 stocks in the Consumer Discretionary category. Five of these stocks (23%) are showing as cheap by the historically high dividend yield and they are DHX Media Ltd. (TSX-DHX, OTC-DHXMF), Dorel Industries (TSX-DII.B, OTC-DIIBF), High Liner Foods (TSX-HLF, OTC-HLNFF), Newfoundland Capital Corp (TSX-NCC.A) and Stingray Digital Group Inc (TSX-RAY.A). Dorel Industries (TSX-DII.B, OTC-DIIBF) has been added to this list.
There was a big drop in price on DHX Media Ltd and analysts think it is in trouble. See Stock Chase.
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), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Newfoundland Capital Corp (TSX-NCC.A), Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF), Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF) and Stingray Digital Group Inc (TSX-RAY.A).
Dorel Industries (TSX-DII.B, OTC-DIIBF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP) has been added to this list. However, they should not have been taken off the list. This is a problem with my spreadsheet and stocks with Dividends Paid in US$.
I follow 11 Consumer Staples stocks. No companies are showing as cheap by the historically high dividend yield. Five stocks (or 46%) 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), Loblaw Companies (TSX-L, OTC-LBLCF), Metro Inc. (TSX-MRU, OTC-MTRAF) and Saputo Inc. (TSX-SAP, OTC-SAPIF). Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF) has been removed from this list.
I only follow three Health Care stocks. None of these stocks are showing as cheap by the historically high dividend yield. Two or 67% are cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). There is no change from last month.
I follow 10 Energy stocks. One stock or 10% are showing as cheap by the historical high dividend yield. It is Mullen Group (TSX-MTL, OTC-MLLGF). This is the same as last month.
There are four stocks (or 40%) 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), and Mullen Group (TSX-MTL, OTC-MLLGF). There is no change from last month.
I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 25%) are showing cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), and CIBC (TSX-CM, NYSE-CM). There is no change from last month.
I follow 14 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 57%) 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), 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). CI Financial (TSX-CIX, OTC-CIFAF) has been added back 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), Power Financial Corp (TSX-PWF, OTC-POFNF) and Sun Life Financial (TSX-SLF, NYSE-SLF). Intact Financial Corp. (TSX-IFC, OTC-IFCZF) has been removed from this list.
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. 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). Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) has been added to this list. However, it should not have been taken off the list. This is a problem with my spreadsheet and stocks with Dividends Paid in US$.
I follow 16 Services stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 25% 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) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). Canadian National Railway (TSX-CNR, NYSE-CNI) and Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA) has been added to this list. Ritchie Bros Auctioneers Inc. (TSX-RBA, NYSE-RBA) should have been on this before, but it was not due to it US$ dividend.
There was a big drop in price with Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF), the company missed some numbers and market over reacted. See Stock Chase.
I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. Two stock or 25% are showing as cheap by historical median dividend yield. The stocks are Barrick Gold Corp (TSX-ABX, NYSE-ABX), Hardwoods Distribution Inc. (TSX-HDI, OTC-HDIUF). Barrick Gold Corp (TSX-ABX, NYSE-ABX), has been added to this list. However, it should not have been taken off the list. This is a problem with my spreadsheet and stocks with Dividends Paid in US$.
I follow 10 Real Estate stocks. None of these stocks is showing as cheap by the historically high dividend yield. This is the same as for last month.
Five stocks (or 50%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN, OTC- ARESF), Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF), Granite Real Estate (TSX-GRT.UN, NYSE-GRP.U), H & R REIT (TSX-HR.UN, OTC-HRUFF) and Melcor Developments Inc. (TSX-MRD, OTC-MODVF). There is no change from last month.
I follow 4 of the Telecom Service stocks. 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 from last month. Telecom Services is a new category for TSX and these companies are no longer under Utilities.
I follow 8 Tech stocks. One is showing as cheap by historical high dividend yield and that is Maxar Technologies Ltd (TSX-MAXR-NYSE-MAXR). There is no change from last month.
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). There is no change 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 43%) 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). Enbridge Income Fund Holdings Inc (TSX-ENF, OTC-EBGUF) has been added to this list.
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 stocks (or 57%) 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). This has not changed from last month.
On my other blog I wrote yesterday about Le Chateau Inc. (TSX-CTU, OTC-LCUAF)... learn more. Next, I will write about K-Bro Linen Inc. (TSX-KBL, OTC-KBRLF) ... learn more on Friday, October 5, 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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