Thursday, February 25, 2021

Algonquin Power and Utilities

Algonquin Power & Utilities is a Top Pics for Robert Rapier on Money Show site. Symbols are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN). I follow this company.

On my other blog I wrote yesterday about ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more. Next, I will write about Russel Metals Inc (TSX-RUS, OTC-RUSMF) ... learn more on Friday, February 26, 2021 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.

Tuesday, February 23, 2021

Top 100 dividend stocks of 2021

Each year Money Sense puts out a list of the 100 top dividend stocks for the year. 2021 is not different. This list was put out on January 22, 2021 this. The list is on the Money Sense site.

The stock that got the top grade of A are listed below.

No Name Ticker Price Yield Grade
1 Manulife Financial Corp MFC $22.40 5.00% A
2 Genworth MI Canada Inc MIC $43.52 4.96% A
3 iA Financial Corp Inc IAG $56.35 3.44% A
4 Power Corp of Canada POW $29.46 6.08% A
5 Great-West Lifeco Inc GWO $29.14 6.01% A
6 Capital Power Corp CPX $34.95 5.87% A

On my other blog I wrote yesterday about Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more. Next, I will write about ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more on Wednesday, February 24, 2021 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.

Thursday, February 18, 2021

Beardstown Ladies

This is an interesting article from the Investment Reporter on Daily Advice. These ladies had boasted a return of 23.4% from 1983 to 1993 and got fame and celebrity. However, it all turned out to be a mistake. Read the tale in this article.

On my other blog I wrote yesterday about Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more. Next, I will write about Manulife Financial Corp (TSX-MFC, NYSE-MFC) ... learn more on Friday, February 19, 2021 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.

Wednesday, February 17, 2021

Working Capital

Some analysts, when they calculate a company's cash flow from operations, exclude changes in working capital. That is, they exclude changes in current assets and current liabilities. When I look at cash flow and cash flow per share on my spreadsheets, I exclude changes in working capital. The Investment reporter discusses this subject here.

This is what they say on this subject:

When we calculate a company’s cash flow from operations, we exclude changes in current assets and current liabilities. Under this system of measuring cash flow, the higher the cash flow the better.

But some companies include changes in current assets and liabilities when calculating cash flow. We think including changes in current assets and liabilities may mislead you. After all, firms that do well often find their current assets increase, which reduces their cash flow. By contrast, firms that do poorly often end up with lower current assets, which increase their cash flow. Looked at this way, lower reported cash flow can be better.

They go on to give an example:

Let’s compare, for example, two firms that manufacture widgets. Firm One is booming. In fact, its sales of digital widgets doubled from $100 to $200 in 2014. Firm Two’s sales of analog widgets, by contrast, fell by half, from $100 to $50.

Let’s say both firms’ receivables total 20 per cent of their sales. This means Firm One’s receivables will have increased from $20 at the start of 2014 to $40 at the beginning of this year. These higher receivables will have used up an extra $20 of cash. Meanwhile, Firm Two’s receivables will have fallen from $20 to $10. This frees up $10 of cash.

Let’s also say both firms keep inventory at half their sales. Firm One’s inventory will have increased from $50 at the start of 2014 to $100 at the start of 2015. This higher level of inventory will have used up $50 cash. Firm Two, by contrast, will now only need $25 of inventory. This will free up $25 of cash. In this example, Firm One will have put $70 cash into its growing operations ($20 in receivables plus $50 in inventory). Firm Two, by contrast, will find its shrinking working capital needs will have freed up $35 ($10 from receivables and $25 of inventory).

What this means is that Firm One’s reported cash flow will likely come in lower than Firm Two’s, if you choose to include changes in current assets. Calculating cash flow this way could give unsuspecting investors the false impression that Firm Two’s higher cash flow means that it’s doing better than Firm One.

To side-step this problem, we calculate cash flow excluding changes in current assets and liabilities. You, too, should exclude changes in current assets and liabilities when calculating cash flow. But at the same time, rely on common sense. Use common sense when calculating cash flow

It’s best to know why changes in current assets and liabilities occur. Say a firm has moved to ‘just-in-time’ manufacturing. Under this system, supplies are brought to a factory just in time to make a few more units. This, of course, means less cash is tied up in supplies and inventory. Cash is freed up from greater efficiency, not from a slowdown in sales.

Increasing inventory, by contrast, can indicate that a lot of it may only sell at marked-down prices, which squeezes profit margins. Similarly, a firm may extend less credit if there’s an increasing likelihood that customers will fail. In this case, lower investment in receivables stems from prudence rather than a drop-off in orders. By contrast, rising receivables may indicate more bad debts instead of growing operations.

In short, it’s best to use your common sense when you examine changes in current assets and current liabilities.

Other Discussions on this subject are show below:

In this entry Investopedia discusses how changes in working capital affect a company's cash flow. This Investors Friend article explains what working capital is. Morning Star has an article about cash flow from Operating Activities.

On my other blog I wrote yesterday about Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more. Next, I will write about Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more on Wednesday, February 17, 2021 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.

Thursday, February 11, 2021

Toromont and Finning

On Daily Advice there is a recent review of Toromont and Finning Stocks by Scotiabank equity research analysts Michael Doumet and Jonathan Goldman. Both these companies are Caterpillar Inc dealers. I own Toromont Industries Ltd (TSX-TIH, OTC-TMTNF) and have since 2007. I follow Finning International Inc (TSX-FTT, OTC-FINGF).

On my other blog I wrote yesterday about Canadian National Railway (TSX-CNR, NYSE-CNI) ... learn more. Next, I will write about Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more on Friday, February 12, 2021 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.

Tuesday, February 9, 2021

Banks and Ratios 3

All my charts are using data from the financial year ending in October 2020, except when otherwise noted, for these banks.

For dividend paying stocks, the Dividend Payout Ratios are important. For the DPRs, lower ratios are better ratios. For Banks the DPR for EPS is the most important one. When looking at these ratios, it would appear that Nation Bank has the best one, which is the lowest one. Last year the National Bank also had the lowest payout of EPS at 40.40%. The DPR payout expect is in the 40 to 55% level for banks. On this basis all the banks BNS and CIBC have DPRs that are too high. Last year all banks were fine.

The problem with cash flow is that for banks they tend to be volatile and often negative. A lot of analysts ignore the Cash Flow of banks.

Bank 2021 Symbol DPR for EPS DPR for CFPS
Bank of Montreal BMO 55.76% 39.63%
Bank of Nova Scotia BNS 67.92% Neg CF
CIBC CM 70.80% 63.36%
Royal Bank RY 54.48% 45.15%
National Bank NA 49.30% 38.55%
TD Bank TD 48.37% 49.00%

I have started to look at Dividend Payouts compared to Free Cash Flow. The problem I have with checking dividends against Free Cash Flow is that different sites sometimes have different values for FCF. This is a continuing problem.

When Shares are issued for Stock Options, you want a company that issues around the same relative number of shares for its industry. Of course, the lower the number of shares issued for stock options; the less money comes out of the earnings for shareholders. In the value column, I am putting in the book value of the stock options at the end of the calendar year.

For the 2020 financial year, all the banks issued stock options at a lower percentage of outstanding share. The value of the stock options in 2020 was also lower according to their book value. Again this year, National Bank gave out the highest percentage of their outstanding shares and also the highest in book value.

Bank 2021 Symbol Shares ‘% of Shares Value $M
Bank of Montreal BMO 0.564 0.09% $40
Bank of Nova Scotia BNS 0.942 0.08% $59
CIBC CM 0.824 0.18% $87
Royal Bank RY 1.043 0.07% $80
National Bank NA 2.318 0.69% $111
TD Bank TD 1.500 0.08% $79

In 2019 financial year CIBC has the lowest percentage of their shares issued for stock option purposes at 11%. They also had the lowest book value cost at $52M. National bank gave the highest percentage of outstanding shares and BNS options was at the highest amount.

Bank 2020 Symbol Shares ‘% of Shares Value $M
Bank of Montreal BMO 0.962 0.15% $62
Bank of Nova Scotia BNS 4.111 0.34% $253
CIBC CM 0.512 0.11% $52
Royal Bank RY 1.900 0.13% $136
National Bank NA 2.951 0.88% $122
TD Bank TD 2.300 0.13% $124

Since I was looking for performance on a long term basis, I want to include the dividend growth and total return for the 6 banks that I cover.

Below is a chart showing the long term growth of dividends for these banks. Certainly, in most cases the 15 to 30 years growth is better than the 5 and 10 years growth. The TD Bank has the best ones over most periods. The National Bank has the second highest dividend increase over most periods. It was the same last year.

Symbol 5 Yr. 10 Yr. 15 Yr. 20 Yr. 25 Yr. 30 Yr.
BMO 5.51% 4.16% 5.63% 7.45% 7.79% 7.15%
BNS 5.77% 6.27% 6.92% 10.37% 10.27% 9.30%
CM 6.39% 5.28% 5.36% 7.82% 8.60% 7.53%
RY 6.19% 7.58% 8.01% 9.61% 10.77% 9.42%
NA 7.22% 7.68% 9.37% 10.63% 10.80% 6.91%
TD 9.23% 9.81% 9.57% 10.03% 11.18% 9.77%

The other thing I looked at was long term total return. This is calculated from December to December. It will include both capital gains and dividends. It is a compound growth rate per year. Here I am looking for total return of 8% per year or more. All the banks achieved that with the 5 years ending December 2020.

Symbol 5 Yr. 10 Yr. 15 Yr. 20 Yr. 25 Yr. 30 Yr.
BMO 8.79% 9.93% 7.70% 8.78% 13.08% 15.69%
BNS 9.55% 6.32% 6.96% 10.88% 15.59% 18.49%
CM 8.99% 8.26% 6.80% 9.03% 12.70% 12.82%
RY 11.46% 11.41% 9.68% 11.36% 16.43% 14.90%
NA 14.68% 10.83% 8.97% 12.62% 15.49% 14.91%
TD 10.08% 10.92% 9.50% 9.52% 15.44% 14.46%

Last year, when I was reporting in 2020, mostly the banks achieve an 8% return per year over the past 5 years except for BNS and CIBC when I was reporting on the 5 years ending December 2019.

Symbol 5 Yr. 10 Yr. 15 Yr. 20 Yr. 25 Yr. 30 Yr.
BMO 8.12% 10.49% 7.68% 12.26% 14.03% 14.47%
BNS 6.48% 8.48% 8.16% 13.26% 15.88% 15.88%
CM 6.42% 9.80% 12.42% 11.01% 13.57% 12.44%
RY 8.96% 9.98% 12.49% 14.54% 16.57% 13.78%
NA 10.62% 12.72% 10.80% 15.29% 16.25% 12.13%
TD 9.43% 12.20% 11.08% 10.07% 15.83% 12.89%

The next thing to cover is how well the banks cover their deposits with assets. In this case, the lower the ratio the better. TD has the lowest and best ratio and last year Royal Bank had the lowest and best ratio..

Bank 2021 Symbol Deposits Cov
Bank of Montreal BMO 0.95
Bank of Nova Scotia BNS 0.93
CIBC CM 0.82
Royal Bank RY 0.72
National Bank NA 0.73
TD Bank TD 0.71

The last thing I want to cover how much an investor would earn if they bought shares with $1,000 on December 31, 1988. On this basis, Royal Bank is the winner with total return of $32,534.75. BNS is a close second at $31,339.68. (Last year the positions of RY and BNS were reversed.) CIBC had the lowest total return at $15,797.49 with National Bank close at $18,168.55.

Symbol Spent Shares Worth Divs Pd Total
BMO $1,000.02 142.86 $13,825.99 $8,895.89 $22,721.88
BNS $998.98 273.50 $18,816.80 $12,522.88 $31,339.68
CM $1,000.06 80.78 $9,182.26 $6,610.23 $15,792.49
RY $1,000.03 211.87 $22,159.48 $10,375.27 $32,534.75
NA $1,000.04 173.92 $12,459.63 $5,708.92 $18,168.55
TD $1,000.00 224.72 $16,161.86 $7,433.18 $23,595.04

On my other blog I wrote yesterday about Canadian Pacific Railway (TSX-CP, NYSE-CP) ... learn more. Next, I will write about Canadian National Railway (TSX-CNR, NYSE-CNI) ... learn more on Wednesday, February 10, 2021 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.

Thursday, February 4, 2021

Something to Buy February 2021

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. See my Spreadsheet .

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 price 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 February 2021 Spreadsheet above 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. None of these stocks (0%) are showing as cheap by the historically high dividend yield. 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), Goodfellow Inc (TSX-GDL, OTC-GFELF), Leon's Furniture (TSX-LNF, OTC-LEFUF), Magna International Inc. (TSX-MG, NYSE-MGA), and Stingray Digital Group Inc (TSX-RAY.A). High Liner Foods (TSX-HLF, OTC-HLNFF), has been deleted 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. None of these stocks (0%) are showing as cheap by the historically high dividend yield. HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF) has been removed from this list.

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 9 Energy stocks. Husky Energy has been bought by Cenovus Energy. One of these stocks (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 four stocks (44%) showing as cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Mullen Group (TSX-MTL, OTC-MLLGF), Ovintiv Inc (TSX-OVV, OTC-OVV), and Suncor Energy (TSX-SU, NYSE-SU). Mullen Group (TSX-MTL, OTC-MLLGF has been added to this group.

I follow 8 Bank stocks. None of these stocks (0%) is showing as cheap by the historically high dividend yield. There is no change from last month.

Four stocks (50%) are showing as cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), CIBC (TSX-CM, NYSE-CM), Royal Bank (TSX-RY, NYSE-RY), and Toronto Dominion Bank (TSX-TD, NYSE-TD). There is no change from last month.

I follow 13 Financial Service stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Eight stocks (62%) 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 Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF), Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF), CI Financial (TSX-CIX, OTC-CIFAF), Element Fleet Management Corp (TSX-EFN, OTC-ELEEF), IGM Financial (TSX-IGM, OTC-IGIFF), and Power Corp (TSX-POW, OTC-PWCDF). Element Fleet Management Corp (TSX-EFN, OTC-ELEEF) has been added to this group.

I follow 6 Insurance stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Five stocks (83%) are showing as cheap by historical median dividend yield. These stocks are Genworth MI Canada Inc (TSX-MIC, OTC-GMICF), 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 33 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 7 Construction stocks. No stocks are showing as cheap by the historically high dividend yield. Aecon Group Inc (TSX-ARE, OTC-AEGXF) has been removed from this group.

One stock (14%) is showing as cheap by historical median dividend yield. It is Aecon Group Inc (TSX-ARE, OTC-AEGXF). Stantec Inc. (TSX-STN, NYSE-STN) has been removed from this group.

I have 3 stocks I have left with the sub-index of Industrial. None of these stocks (0%) is showing as cheap by the historically high dividend yield. There is no change from last month.

Two stock (66%) 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 of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Two stocks (29%) are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), and Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF). There is no change from last month.

I follow 16 Services stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.

Three stocks (19%) are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Transcontinental Inc (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). Pason Systems Inc. (TSX-PSI, OTC-PSYTF) has 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.

Four stock (40%) 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), Kirkland Lake Gold (TSX-KL, NYSE-KL), and Stella-Jones (TSX-SJ, OTC-STLJF). There is no change from last month

I follow 10 Real Estate stocks. No stocks (0%) are showing as cheap by historically high dividend yield. There is no change from last month.

Three stocks (30%) are showing as cheap by historical median dividend yield. They are Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF), Melcor Developments Inc. (TSX-MRD, OTC-MODVF), and SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). First Capital Realty (TSX-FCR.UN, OTC-FCXXF),) has been removed from this group.

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

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 stocks (0%) are showing as cheap by historical high dividend yield. There is no change from last month.

Two stocks (33%) are showing cheap by historical median dividend yield. They are Evertz Technologies (TSX-ET, OTC-EVTZF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF), has been removed from this group.

I follow 8 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 (50%) 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). There is no change from last month.

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 (30%) are showing as 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 AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more. Next, I will write about Absolute Software Corporation (TSX-ABT, OTC-ALSWF) ... learn more on Monday, February 05, 2021 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.

Tuesday, February 2, 2021

Dividend Stocks February 2021

The Blogger Stock Trades Canada has on his site a list of Canadian stocks that have cut their dividends. If you want to stay update on dividend cuts, this seems to a good place to keep an eye on. You might also want to get the free weekly newsletter from Canadian Stock Channel which says what might be the best Canadian Dividend Stocks to buy at the present time.

First, I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand, I do follow of good number of great dividend growth stocks.

The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. Some use the 10 year average or median yield rather than the historical ones. I use median yields, always. See my spreadsheet at dividend growth stocks that I just updated for February 2021.

On this list,
  • I have 5 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 43 stocks with a dividend yield higher than the historical average dividend yield
  • I have 61 stocks with a dividend yield higher than the historical median dividend yield and
  • 71 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list last list in January 2021,
  • I have 7 stocks with a dividend yield higher than the historical high dividend yield,
  • I have 43 stocks with a dividend yield higher than the historical average dividend yield
  • I have 65 stocks with a dividend yield higher than the historical median dividend yield and
  • 71 stocks with a dividend yield higher than the 5 year average dividend yield.
When I did my list in January 2014,
  • I had 9 stocks with a dividend yield higher than the historical high dividend yield,
  • I had 45 stocks with a dividend yield higher than the historical average dividend yield and
  • 39 stocks with a dividend yield higher than the 5 year average dividend yield.
If you had one share of each stock, total dividends last month would be $168.78. This month dividends would be $169.80. It can vary as because some stocks are paid in US$ and so this figure is affected by currency exchange. Of the stock that I follow 7 stocks has raised their dividends since last month.

Allied Properties REIT (TSX-AP.UN, OTC-APYRF)
ATCO Ltd (TSX-ACO.X, OTC-ACLLF)
Canadian National Railway (TSX-CNR, NYSE-CNI)
Canadian Utilities Ltd (TSX-CU, OTC-CDUAF)
Metro Inc (TSX-MRU, OTC-MTRAF)

Mullen Group (TSX-MTL, OTC-MLLGF) *
Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF)

*Mullen Group’s dividend is back to their old dividend after a suspension and cut in dividends in 2020.

Also, I have changed Kirkland Lake Gold (TSX-KL, NYSE-KL) dividend in paid in US$, not CDN$. This change was made in 2020 and I did not record that. I am now showing this dividend in the equivalent CDN$ on my spreadsheet. Le Chateau Inc (TSX-CTU.H) has a symbol change from CTU to CTU.H. The OTC US symbol is gone.

Of the stocks I follow, 2 stock has cut their dividends. They are both REITs.

First Capital REIT (TSX-FCR.UN, OTC-FCXXF)
RIOCAN REIT (TSX-REI.UN, OTC-RIOCF)

Of the stocks I follow, 0 stocks have suspended or terminated their dividend.

Of the stocks I follow, the following declined the most in their stock price.

Name Exch Sym Exch Sym Chge SP
Methanex Corp TSX MX NASDAQ MEOH -27.58%
Reitmans (Canada) Ltd TSX RET.A OTC RTMAF -25.00%
Ritchie Bros Auctioneers TSX RBA NYSE RBA -14.66%
Element Fleet Mge Corp TSX EFN OTC ELEEF -11.21%
Alimentation TSX ATD.B OTC ANCUF -10.10%
Calian Group Ltd. TSX CGY OTC CLNFF -9.73%
Supremex Inc TSX SXP OTC SUMXF -9.31%
HLS Therapeutics Inc TSX HLS OTC HLTRF -9.06%
Barclays PLC LSE BARC NYSE BCS -8.76%
H & R REIT TSX HR.UN OTC HRUFF -8.50%

Of the stock that I follow, these stocks gained the most in their stock price.

Name Exch Sym Exch Sym Chge SP
Pulse Seismic Inc. TSX PSD OTC PLSDF 19.79%
Computer Modelling TSX CMG OTC CMDXF 21.52%
Obsidian Energy Ltd TSX OBE OTC OBELF 24.14%
Bombardier Inc. TSX BBD.B OTC BDRBF 27.08%
TFI International TSX TFII OTC TFIFF 29.62%
WildBrain Ltd TSX WILD OTC WLDBF 34.64%
Atlantic Power Corp TSX ATP NYSE AT 41.57%
Just Energy Group Inc TSX JE NYSE JE 43.72%
Ballard Power Systems TSX BLDP NASDAQ BLDP 46.84%
Blackberry Ltd. (RIM) TSX BB NYSE BB 112.80%

Most of my stocks started out as Dividend Payers. Currently 21 stocks are not paying any dividends and this would be some 13.8% of the stocks that I follow. Three of these stocks never had dividends, so 12.7% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Trigon Metals Inc. (TSX-TM, OTC-PNTZF).

I am 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 10 year median dividend yields (P/10Y). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.

There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.

The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.

You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.

Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also 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.

Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.

The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.

See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.

On my other blog I wrote yesterday about Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more. Next, I will write about AGF Management Ltd (TSX-AGF.B, OTC-AGFMF) ... learn more. learn more on Wednesday, February 03, 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 website for stocks followed and investment notes. 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 or StockTwits. I am on Instagram with #walktoronto.