Canadian Dividend Watch List: August 17, 2012

This is a list of Canadian dividend stocks that currently, or in the past, had a history of consecutive dividend increases. For those wishing to find the most complete fundamental information on these companies, we recommend visiting one of Canada’s leading financial websites, the Financial Post (found here). However, Yahoo!Finance probably has the better long-term charts and historical dividend data.

Symbol Name Price P/E EPS Yield Price/Book % from low
IGM.TO IGM Financial Inc. 37.25 11.3 3.3 0.40% 2.19 1.20%
FFH.TO FAIRFAX FINANCIAL HOLDINGS LTD. 379.97 0 0 2.70% 1.07 3.59%
GS.TO Gluskin Sheff + Associates, Inc. 13.89 8.37 1.27 4.50% 5.26 5.47%
SJR-B.TO Shaw Communications, Inc. 20.01 19.33 1.52 4.90% 2.58 5.71%
SNC.TO SNC-Lavalin Group Inc. 37.41 14.06 1.98 1.60% 2.89 7.13%
PWF.TO Power Financial Corporation 25.31 11.37 2.42 5.60% 1.53 7.15%
AGF-B.TO AGF Management Limited 11.56 8.9 1.02 9.40% 0.94 7.24%
RBA.TO Ritchie Bros. Auctioneers Incorporated 19.25 32.08 0.77 2.60% 3.19 7.54%
CCA.TO Cogeco Cable Inc. 37.08 7.3281 5.06 2.70% 1.55 7.63%
EMP-A.TO Empire Company Limited 58.21 10.64 4.99 1.70% 1.16 8.91%

Watch List Summary

Of particular interest on this Canadian Watch List is Ritchie Bros. Auctioneers (RBA).  The very first time that this company appeared on our list was August 23, 2010 when the stock was trading at $18.94.  Immediately after showing up on our list, RBA vaulted to $29.66 or +56% by April 29, 2011.


After attaining the $29.66 level, Ritchie Bros. declined –36% back to the $18.85 level.  RBA then rose nearly +37% by late February 2012 before returning to the current level of $19.25.  The consistency of RBA to rise from the $18/$19 level in the last 6 years has got to end somewhere.  The stock market is very quick to take away anything that appears too easy.  Therefore, we need to find a reasonable margin for error if we were to enter into such a transaction.

According to Yahoo!Finance, Ritchie Bros. is “…an industrial auctioneer, sells various equipment to on-site and online bidders. The company, through unreserved public auctions, sells a range of used and unused industrial assets, including equipment, trucks, and other assets utilized in the construction, transportation, agricultural, material handling, mining, forestry, petroleum, and marine industries.”

We normally don’t rely on “stories” behind a stock because such analysis typically leads to false hope and unrealistic expectations.  However, here is what we think the “story” on RBA might be.  As secular bear markets tend to coincide with a commodity bull market, there will be a high demand for the very equipment that RBA auctions.  As many companies try and fail to enter into the capital intensive mining and farming sector, RBA will be quick to step in and auction the equipment that will be in high demand.  The more auctions, while there is exceptional demand for the equipment, the better the earnings for RBA.


According to Edson Gould’s Altimeter, Ritchie Bros. hit an extreme low in 2009.  Through all of the gyrations in the market since, RBA’s Altimeter is now trading at the equivalent level as the 2009 low.

In terms of the downside risk on RBA, we believe that a critical support level is at $17.84.  According to Dow Theory, if RBA were to fall significantly below this level then the next downside targets would be (indicates percentage decline from current price of $19.25):

  • $15.81 (-17.87%)
  • $13.78 (-28.42%)
  • $11.75 (-38.96%)

From a Dow Theory standpoint, RBA is dancing along that fine line of $17.84 and has successfully done so for the last 6 years.  This suggests that the stock has either pent up value or is going to get crushed to the downside.  Cautious as we might be under normal circumstances, we believe that RBA is worth considering at the current price with another planned purchase if the stock declines to the $13.78 level.

Comments are closed.