May 2012 Stock Screening Results – Best Canadian Dividend Payers?

A long time ago, maybe like some of you, I received my summer 2011 edition of Canadian Business Magazine in my mailbox.  In that edition, I found the “Investor 500” series particularly intriguing.  In this series, amongst various “best of” articles I found “Best Dividend Stocks” (for 2011).   Based on a combination of modest dividend yield (>2.5%), moderate dividend payout ratio (<60%) and a strong 5-year dividend growth rate (>10%), the best stocks to own were as follows:

  • Canadian Energy Services & Technology (CEU)
  • Rogers Communications (RCI.B)
  • Corus Entertainment (CJR.B)
  • Royal Bank (RY)
  • Enbridge (ENB)
  • Intact Financial (IFC)
  • Transcontinental (TCL.A)

This got me thinking, how would a similar screen today sniff-out great Canadian companies to invest in?  Are these companies still in the top one year later as of May 2012?

Very few are.

Using the following criteria via TMX Money, ignoring payout ratio for the time being,…

  • Current dividend yield >3%
  • 5-year average dividend growth rate >10%

…I got the following 15 results:

Company Name

Price

52 Wk High

52 Wk Low

Dividend

Market Cap

BCE Inc.

40.930

43.000

34.990

2.170

31,700,050,552

Rogers Communications Inc.

36.190

40.220

34.250

1.580

14,925,231,464

Talisman Energy Inc.

10.170

20.800

9.850

0.618

10,492,846,761

TELUS Corporation

57.250

59.030

46.860

2.440

8,623,419,451

Shaw Communications Inc.

19.410

22.450

18.970

0.970

8,126,190,483

Labrador Iron Ore Royalty Corporation

32.810

39.730

27.130

1.000

2,099,840,000

Corus Entertainment Inc.

24.490

24.980

18.180

0.960

1,966,338,932

Constellation Software Inc.

87.190

99.990

62.970

3.946

1,847,689,500

MI Developments Inc.

33.470

37.790

24.160

2.000

1,569,788,385

Canada Bread Company, Limited

48.500

49.880

41.500

2.000

1,232,715,382

Black Diamond Group Limited

21.850

22.490

11.830

0.720

827,462,624

GENIVAR Inc.

24.190

29.600

19.830

1.500

794,776,697

Computer Modelling Group Ltd.

17.000

18.750

9.890

0.520

634,206,488

Transcontinental Inc.

9.510

16.400

9.750

0.580

627,678,373

Bird Construction Inc.

14.750

15.540

8.680

0.720

621,769,228

While this list is a few more than the 7 listed in the Canadian Business Magazine article from last summer, there aren’t many with over $500 million in market capitalization using the stock screening criteria I listed above.  So, the moral of the story – a lot can change in one year.   

What about that payout ratio?  BCE has a payout ratio in excess of 60%, as does Telus and Shaw.  Only a handful of these stocks have a dividend payout ratio under 60%.

Stock screeners are good tools for investors but not perfect.  They provide investors with the ability to filter through 1000’s of companies to match your investing criteria.  For some investors, that’s great but I don’t rely on them religiously.  For me and my approach to dividend investing, I think there are only about 50 Canadian companies worth owning.  A number of the stocks above won’t find their way into my portfolio – ever – because they fall short of my criteria in terms of market capitalization, lengthy dividend history, higher yields, mutiple dividend increases, increasing cash flow and much more.  Actually, I like owning companies you’ll find in the holdings of ETFs like XDV, CDZ and XIU.   The only company I’m considering adding to my portfolio from the list above in the short-term is Rogers (RCI.B).

That’s the only stock of course, until the summer 2012 edition of Canadian Business Magazine arrives in my mailbox.  That should happen later this week. 🙂

What about you?  Do you use stock screening tools?  Do you take your screening criteria seriously?

Mark Seed is the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've grown our portfolio to over $500,000 - but there's more work to do! Our next big goal is to own a $1 million investment portfolio for an early retirement. Subscribe and join the journey!

8 Responses to "May 2012 Stock Screening Results – Best Canadian Dividend Payers?"

  1. Interesting stocks. I had not heard of Canadian Energy Services & Technology (CEU) or Constellation Software Inc. (CSU) before and I think I will follow up on them.

    Great Post.

    Reply
  2. When I used to purchase individual stocks, I used stock screening tools as a starting point to narrow down the list of companies I would then do more research on. That being said, I always found it pretty interesting that some places would make recommendations based purely on the screening criteria. 🙂

    Reply

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