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 2022 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 22 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.
Eight (36%) 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), High Liner Foods (TSX-HLF, OTC-HLNFF), Keg Royalties Income Fund, (TSX-KEG.UN, OTC-KRIUF), 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). There is no change from last month.
I follow 13 Consumer Staples stocks. One stock (7%) is showing as cheap by the historically high dividend yield. It is Saputo Inc. (TSX-SAP, OTC-SAPIF). Saputo Inc. (TSX-SAP, OTC-SAPIF) have been added to this list. Metro Inc (TSX-MRU, OTC-MTRAF) was originally added but it is a mistake.
Eight stocks (62%) 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), KP Tissue Inc (TSX-KPT, NYSE-KPTSF), Lassonde Industries (TSX-LAS.A, OTC-LSDAF), Loblaw Companies (TSX-L, OTC-LBLCF), Maple Leaf Foods Inc (TSX-MFI, OTC-MLFNF), Metro Inc (TSX-MRU, OTC-MTRAF), and Saputo Inc. (TSX-SAP, OTC-SAPIF). There is no change from last month.
I follow Six Health Care stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.
Four stocks (67%) 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 Neighbourly Pharmacy Inc (TSX-NBLY, OTC-none). Neighbourly Pharmacy Inc (TSX-NBLY, OTC-none) has been added to this list.
I follow 9 Energy stocks. One stock (11%) is showing as cheap by the historical high dividend yield. It is Suncor Energy (TSX-SU, NYSE-SU). There is no change from last month.
There are three stocks (22%) showing as cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). Mullen Group (TSX-MTL, OTC-MLLGF) has been added back to this list.
I follow 26 Financial stocks under the categories of Banks (8), Financial Services (13), and Insurance (5).
I follow 8 Bank 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 (38%) are showing as cheap by historical median dividend yield. They are Bank of Nova Scotia (TSX-BNS, NYSE-BNS), 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.
Six stocks (46%) 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), Element Fleet Management Corp (TSX-EFN, OTC-ELEEF), IGM Financial (TSX-IGM, OTC-IGIFF), and Power Corp (TSX-POW, OTC-PWCDF). Accord Financial Corp (TSX-ACD, OTC-ACCFF), and Alaris Equity Partners Income Trust (TSX-AD.UN, OTC-ALARF) has been added to this list.
I follow 5 Insurance 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 (60%) 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), and Manulife Financial Corp (TSX-MFC, NYSE-MFC). There is no change from last month.
I follow 33 Industrial stocks. Algoma Central Corporation (TSX-ALC, OTC-AGMJF) has been added to this as I am now following this stock. 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 stock (0%) is showing as cheap by the historically high dividend yield. There is no change from last month.
Two stock (29%) are showing as cheap by historical median dividend yield. They are Aecon Group Inc (TSX-ARE, OTC-AEGXF) and Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF). Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF) has been added back to this list.
I have 3 stocks left with the sub-index of Industrial. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.
One stock (33%) is showing as cheap by historical median dividend yield. It is Finning International Inc. (TSX-FTT, OTC-FINGF). There is no change from last month.
I have 6 Manufacturing stocks. None of these stocks (0%) are showing as cheap by the historically high dividend yield. There is no change from last month.
One stock (14%) is showing as cheap by historical median dividend yield. It is Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF). There is no change from last month.
I follow 17 Services stocks. Algoma Central Corporation (TSX-ALC, OTC-AGMJF) has been added to this as I am now following this stock. One of these stocks (6.25%) is showing as cheap by the historically high dividend yield. It is Titanium Transportation Group Inc (TSX-TTR, OTC-TTTGF). There is no change from last month.
Six stock (35%) are showing as cheap by historical median dividend yield. They are Algoma Central Corporation (TSX-ALC, OTC-AGMJF), Canadian National Railway (TSX-CNR, NYSE-CNI), Parkland Fuel Corp (TSX-PKI, OTC-PKIUF), Pulse Seismic Inc. (TSX-PSD, OTC-PLSDF), Titanium Transportation Group Inc (TSX-TTR, OTC-TTTGF) and Transcontinental Inc (TSX-TCL.A, OTC-TCLAF). Algoma Central Corporation (TSX-ALC, OTC-AGMJF), and Canadian National Railway (TSX-CNR, NYSE-CNI) were added to 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 Barrick Gold Corp (TSX-ABX, NYSE-ABX), 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.
Two stocks (20%) are showing as cheap by historical median dividend yield. They are 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 back to this list.
I follow 3 of the Telecom Service stocks. None of the stocks (0%) are showing as cheap by historically high dividend yield. 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 10 Tech stocks. No stocks (0%) are showing as cheap by historical high dividend yield. There is no change from last month.
Four stock (40%) are showing cheap by historical median dividend yield. They are Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF), Enghouse Systems Limited (TSX-ENGH, OTC-EGHSF), Evertz Technologies (TSX-ET, OTC-EVTZF), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). Enghouse Systems Limited (TSX-ENGH, OTC-EGHSF) has been added to this list.
I follow 7 of the Infrastructure Type utility companies. None of the stocks (0%) are showing as cheap by historical high dividend yield. There is no change from last month.
Three stocks (38%) are showing cheap by historical median dividend yield. They are Enbridge Inc. (TSX-ENB, NYSE-ENB), Keyera Corp (TSX-KEY, OTC-KEYUF), and TC Energy Corp (TSX-TRP, NYSE-TRP). There is no change from last month.
I follow 9 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.
Three stocks (33%) are showing as cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF), and Canadian Utilities Ltd (TSX-CU, OTC-CDUAF). Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN) has added back to this list.
On my other blog I wrote yesterday about Exco Technologies Ltd (TSX-XTC, OTC-EXCOF) ... learn more. Next, I will write about Absolute Software Corporation (TSX-ABST, NASDAQ-ABST) ... learn more on Friday, February 4, 2022 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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