Thursday, May 7, 2020

Something to Buy May 2020

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 dividend yield test in this note is a quick way of finding possible stock buys.

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. However, this is just a place to start. It is a good idea to check the stock with other tests, especially the P/S Ratio test.

For other testing, like P/E Ratios, P/S Ratios, P/CF Ratios, P/BV Ratios and Price/Graham Price Ratios, you use estimates or data from the last reported financial quarter.

If a stock is showing as a buy using the dividend yield test, I usually like to verify it is a buy by doing a P/S Ratio test. Here you compare the current P/S Ratio to the 10 year median P/S Ratio. If the current P/S Ratio is lower than the 10 year median, then the stock is a buy. I note that Morningstar gives a current P/S Ratio. The 10 year median ratio is shown in my review of a stock. The 10 year median ratio in a review is good for one year from the date of review.

This historical dividend yield test 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 10 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 May 2020 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 23 stocks in the Consumer Discretionary category. Five of these stocks (22%) are showing as cheap by the historically high dividend yield and they are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), and Stingray Digital Group Inc (TSX-RAY.A). BRP Inc (TSX-DOO, NASDAQ-DOOO) has been removed from this list.

Eleven (or 49%) of Consumer Discretionary are showing cheap by historical median dividend yield. They are Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF), Goeasy Ltd (TSX-GSY, OTC-EHMEF), Goodfellow Inc (TSX-GDL, OTC-GFELF), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Linamar Corporation (TSX-LNR, OTC-LIMAF), Magna International Inc. (TSX-MG, NYSE-MGA), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF), Savaria Corporation (TSX-SIS, OTC-SISXF), and Stingray Digital Group Inc (TSX-RAY.A).

BRP Inc (TSX-DOO, NASDAQ-DOOO), Dollarama Inc (TSX-DOL, OTC-DLMF), Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF), and Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) has been removed from this list. Both Keg Royalties Income Fund (TSX-KEG.UN, OTC-KRIUF), and Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) have cut their dividends.

I follow 10 Consumer Staples stocks. No stocks are showing as cheap by the historically high dividend yield. There is no change from last month.

Seven stocks (or 70%) are showing cheap by historical median dividend yield. These are Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Lassonde Industries (TSX-LAS.A, OTC-LSDAF), Loblaw Companies (TSX-L, OTC-LBLCF), Metro Inc (TSX-MRU, OTC-MTRAF), North West Company (TSX-NWC, OTC-NWTUF), and Saputo Inc. (TSX-SAP, OTC-SAPIF). Lassonde Industries (TSX-LAS.A, OTC-LSDAF) has been added to this list.

I follow Five Health Care stocks. One stock (20%) of these stocks is showing as cheap by the historically high dividend yield. It is HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF). Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) has been removed from this list.

Five (100%) are cheap by the historical median dividend yield. The stocks are Chartwell Retirement Residences (TSX-CSH.UN, NYSE-CWSRF), HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF), Johnson and Johnson (NYSE-JNJ), Medtronic Inc. (NYSE-MDT), and Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF). There is no change from last month.

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, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF), Ovintiv Inc (TSX-OVV, OTC-OVV), and Suncor Energy (TSX-SU, NYSE-SU). Cenovus Energy Inc (TSX-CVE, NYSE-CVE), Husky Energy (TSX-HSE, OTC-HUSKF), and Mullen Group (TSX-MTL, OTC-MLLGF), have been removed from the last. Cenovus Energy Inc has suspended its dividend and Husky Energy has cut their dividends.

There are Five stocks (or 50%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF), Mullen Group (TSX-MTL, OTC-MLLGF), Ovintiv Inc (TSX-OVV, OTC-OVV), and Suncor Energy (TSX-SU, NYSE-SU). Cenovus Energy Inc. (TSX-CVE, NYSE-CVE), and Husky Energy (TSX-HSE, OTC-HUSKF), has been removed from this list.

I follow 8 Bank stocks. Two (25%) is showing as cheap by the historically high dividend yield and it is and CIBC (TSX-CM, NYSE-CM) and Toronto Dominion Bank (TSX-TD, NYSE-TD). Barclays PLC (LSE-BARC, NYSE-BCS) has been removed from this list. Barclays have suspended their dividends. Toronto Dominion Bank (TSX-TD, NYSE-TD) has been added to this list

Six stocks (or 88%) are showing cheap by historical median dividend yield. They are Bank of Montreal (TSX-BMO, NYSE-BMO), Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM), National Bank of Canada (TSX-NA, OTC-NTIOF), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD). Barclays PLC (LSE-BARC, NYSE-BCS) has been removed from this list.

I follow 14 Financial Service stocks. Three stocks (21%) are showing as cheap by the historically high dividend yield. They are Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF), IGM Financial (TSX-IGM, OTC-IGIFF), and Power Corp (TSX-POW, OTC-PWCDF). Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B, OTC-AGFMF), and Alaris Royalty Corp (TSX-AD, OTC-ALARF) have been removed from this list.

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), IGM Financial (TSX-IGM, OTC-IGIFF), Onex Corp (TSX-ONEX, OTC-ONEXF) and Power Corp (TSX-POW, OTC-PWCDF). Chesswood Group (TSX-CHW, OTC-CHWWF) has been removed from this list. It has cut its dividend temporarily.

I follow 5 Insurance stocks. Two stocks (40%) are showing as cheap by the historically high dividend yield. They are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), and Manulife Financial Corp (TSX-MFC, NYSE-MFC). IA Financial Corp (TSX-IAG, OTC-IDLLF) has been removed from this list.

Four stocks (or 83%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF), IA Financial Corp (TSX-IAG, OTC-IDLLF), Manulife Financial Corp (TSX-MFC, NYSE-MFC), and Sun Life Financial (TSX-SLF, NYSE-SLF). 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 showing as cheap by the historically high dividend yield. There is no change from last month.

Three stocks or 50% is showing as cheap by historical median dividend yield. They are Bird Construction Inc (TSX-BDT, OTC-BIRDF), Stantec Inc. (TSX-STN, NYSE-STN), and Toromont Industries Ltd (TSX-TIH, OTC-TMTNF). There is no change from last month.

I have 3 stocks I have left with the sub-index of Industrial. Two stocks (67%) are cheap by the historically high 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.

Three stocks or 100% are showing as cheap by historical median dividend yield. They are Exchange Income Corp (TSX-EIF, OTC-EIFZF), 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. Three stocks (43%) is showing as cheap by the historically high dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF), and Intertape Polymer Group Inc (TSX-ITP, OTC-ITPOF). Ag Growth International (TSX-AFN, OTC-AGGZF) has been removed. It has cut its dividend.

Five stocks or 71% are showing as cheap by historical median dividend yield. They are Ag Growth International (TSX-AFN, OTC-AGGZF), 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). Ag Growth International (TSX-AFN, OTC-AGGZF has been removed from this list.

I follow 16 Services stocks. Two stocks are showing as cheap by the historically high dividend yield. They are Pason Systems Inc. (TSX-PSI, OTC-PSYTF), and Transcontinental Inc (TSX-TCL.A, OTC-TCLAF). Canadian National Railway (TSX-CNR, NYSE-CNI), and Ritchie Bros Auctioneers Inc (TSX-RBA, NYSE-RBA) have been removed from this list.

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), Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). Ritchie Bros Auctioneers Inc (TSX-RBA, NYSE-RBA), and TFI International (TSX-TFII, OTC-TFIFF) has been removed from this list.

I follow 10 Material stocks. No stock (10%) is showing as cheap by the historically high dividend yield. Methanex Corp (TSX-MX, NASDAQ-MEOH) has been removed from this list.

Six stock or 60% are showing as cheap by historical median dividend yield. The stocks are Barrick Gold Corp (TSX-ABX, NYSE-ABX), Chemtrade Logistics Inc. Fund (TSX-CHE.UN, OTC-CGIFF), Hardwoods Distribution Inc. (TSX-HDI, OTC-HDIUF), Stella-Jones (TSX-SJ, OTC-STLJF), Supremex Inc (TSX-SXP, OTC-SUMXF), and Teck Resources Ltd (TSX-TECK.B, NYSE-TECK . Methanex Corp (TSX-MX, NASDAQ-MEOH) has been removed this list.

I follow 10 Real Estate stocks. Two stocks (10%) are showing as cheap by historically high dividend yield. They are H & R REIT (TSX-HR.UN, OTC-HRUFF) and Melcor Developments Inc. (TSX-MRD, OTC-MODVF). Melcor Developments Inc. (TSX-MRD, OTC-MODVF) has been added to this list

Siv stocks (or 60%) are showing as cheap by historical median dividend yield. They are Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF), First Capital Realty (TSX-FCR.UN, OTC-FCXXF), Granite REIT (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). There is no change from last month.

I follow 3 of the Telecom Service stocks. One (33%) stocks is showing as cheap by historically high dividend yield and it is Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR). There is no change from last month

Three stocks (or 100%) 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.

I follow 9 Tech stocks. One stock (11%) are showing as cheap by historical high dividend yield. It is Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF). Evertz Technologies (TSX-ET, OTC-EVTZF) has been removed from this list.

Four stocks (or 44%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), Quarterhaill Inc (TSX-QTRH, NASDAQ-QTRH), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Enghouse Systems Limited (TSX-ENGH, OTC-EGHSF) has been removed from this list.

I follow 7 of the Infrastructure type utility companies. One stock (14%) is showing as cheap by historical high dividend yield. It is Enbridge Inc. (TSX-ENB, NYSE-ENB). Keyera Corp (TSX-KEY, OTC-KEYUF) has been removed from this list.

Four stocks (or 57%) are showing cheap by historical median dividend yield. They are Enbridge Inc. (TSX-ENB, NYSE-ENB), Keyera Corp (TSX-KEY, OTC-KEYUF), Pembina Pipeline Corp (TSX-PPL, NYSE-PBA) and TC Energy Corp (TSX-TRP, NYSE-TRP). AltaGas Ltd (TSX-ALA, OTC-ATGFF), and Brookfield Infrastructure Partners (TSX-BIP.UN, NYSE-BIP) have been removed from this list.

I follow 10 of the Power type utility companies. One stock is showing as cheap by historical high dividend yield. This is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no changed from last month.

Two stocks (or 20%) are showing cheap by historical median dividend yield. Those stocks are ATCO Ltd (TSX-ACO.X, OTC-ACLLF), and Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). Fortis Inc (TSX-FTS, OTC-FRTSF) has been removed from this list.

On my other blog I wrote yesterday about Power Corp of Canada (TSX-POW, OTC-PWCDF) ... learn more. Next, I will write about Ag Growth International (TSX-AFN, OTC-AGGZF) .... learn more on Monday, May 8, 2020 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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