Something to Buy August 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 August 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. Four of these stocks (17%) 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), and Stingray Digital Group Inc (TSX-RAY.A). There is no change from last month.

Six (26%) 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), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), and Stingray Digital Group Inc (TSX-RAY.A). Goodfellow Inc (TSX-GDL, OTC-GFELF), and Savaria Corporation (TSX-SIS, OTC-SISXF) has been removed from this list.

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.

Five stocks (50%) 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), Loblaw Companies (TSX-L, OTC-LBLCF), Metro Inc (TSX-MRU, OTC-MTRAF), and Saputo Inc. (TSX-SAP, OTC-SAPIF). There is no change from last month.

I follow Five Health Care stocks. One stock (20%) is showing as cheap by the historically high dividend yield. It is Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF). There is no change from last month.

Four stocks (80%) are cheap by the historical median dividend yield. The stocks are 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. One stock (10%) is showing as cheap by the historical high dividend yield. It is Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). There is no change from last month.

There are three stocks (30%) showing as cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ovintiv Inc (TSX-OVV, OTC-OVV), and Suncor Energy (TSX-SU, NYSE-SU). Mullen Group (TSX-MTL, OTC-MLLGF) has been removed from this list.

I follow 8 Bank stocks. One stock (13%) is showing as cheap by the historically high dividend yield and it is and Toronto Dominion Bank (TSX-TD, NYSE-TD). There is no change from last month.

Six stocks (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). There is no change from last month.

I follow 14 Financial Service stocks. Two stocks (7%) are showing as cheap by the historically high dividend yield. They are Power Corp (TSX-POW, OTC-PWCDF), and Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF). There is no change from last month.

Nine stocks (64%) are showing as 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). There is no change from last month.

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). There is no change from last month.

Four stocks (83%) are showing as 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.

One stock (17%) is showing as cheap by historical median dividend yield. It is Stantec Inc. (TSX-STN, NYSE-STN). Bird Construction Inc (TSX-BDT, OTC-BIRDF), and Toromont Industries Ltd (TSX-TIH, OTC-TMTNF) have been removed from this list.

I have 3 stocks I have left with the sub-index of Industrial. One stock (33%) is showing as cheap by the historically high dividend yield. It is Finning International Inc. (TSX-FTT, OTC-FINGF). Russel Metals (TSX-RUS, OTC-RUSMF) has been removed from this list.

One stock (33%) is showing as cheap by historical median dividend yield. It is Finning International Inc. (TSX-FTT, OTC-FINGF). Exchange Income Corp (TSX-EIF, OTC-EIFZF), and Russel Metals (TSX-RUS, OTC-RUSMF) have been removed from this list.

I have 7 Manufacturing stocks. Two stocks (29%) are showing as cheap by the historically high dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), and Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF). Intertape Polymer Group Inc (TSX-ITP, OTC-ITPOF) has been removed from this list.

Three stocks (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). PFB Corp (TSX-PFB, OTC-PFBOF) has been removed from this list.

I follow 16 Services stocks. One stocks (6%) is showing as cheap by the historically high dividend yield. It is Pason Systems Inc. (TSX-PSI, OTC-PSYTF). There is no change from last month.

Four stocks (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). Parkland Fuel Corp (TSX-PKI, OTC-PKIUF), Ritchie Bros Auctioneers Inc (TSX-RBA, NYSE-RBA) have been removed from this list.

I follow 10 Material stocks. One stock (10%) is showing as cheap by the historically high dividend yield. It is Kirkland Lake Gold (TSX-KL, NYSE-KL). There is no change from last month.

Three stock (30%) are showing as cheap by historical median dividend yield. The stocks are Chemtrade Logistics Inc. Fund (TSX-CHE.UN, OTC-CGIFF), Kirkland Lake Gold (TSX-KL, NYSE-KL), and Stella-Jones (TSX-SJ, OTC-STLJF). Barrick Gold Corp (TSX-ABX, NYSE-ABX), and Hardwoods Distribution Inc. (TSX-HDI, OTC-HDIUF) have been removed from this list.

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

Five stocks (50%) 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), 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. No stock (0%) is showing as cheap by historically high dividend yield. Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) has been removed from this list.

Three stocks (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. No stock (0%) is showing as cheap by historical high dividend yield. Evertz Technologies (TSX-ET, OTC-EVTZF) has been removed from this list.

Two stocks (22%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Evertz Technologies (TSX-ET, OTC-EVTZF) 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). This is no change from last month.

Four stocks (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), have been removed from this list.

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

Two stocks (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). There is no change from last month.

On my other blog I wrote yesterday about Stingray Digital Group Inc (TSX-RAY.A, OTC-NONE) ... learn more. Next, I will write about BlackBerry Ltd (TSX-BB, NASDAQ-BBRY) ... learn more on Friday, August 7, 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.

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