Below are the actual returns from our Canadian Dividend Watch List dated September 2016.
The companies are ranked based on their expected performance from worst (on the left) to best (on the right), click on the chart to see how the analysts expected the stocks to perform last year.
The standout performers from the analyst estimates were Dream Office REIT (D-UN.TO), Cogeco Inc. (CGO.TO), and Boardwalk REIT (BEI.UN.TO). These stock met or exceeded the analyst estimates. The stocks that underperformed analyst expectation were Imperial Oil (IMO.TO), Cominar REIT (CUF-UN.TO), and Riocan REIT (REI-UN.TO).
As compared to the Toronto Stock Exchange 1-year return of +4.67%, the watch list from last year gained +6.53%. Below is our watch list and analyst projections.
In the chart below, highlighted in blue, are the analyst’s 2016 estimated percentage changes for what the respective stock was expected to do. In red, we see what the actual outcome was for the stock in the past year.
Overall, we believe that the analysts covering the stocks on our watch list from last year did relatively well. The three stocks expected to underperform were on target. Only two of the ten stocks expected to increase failed to register on the positive side of the column.
The Canadian Dividend Watch List from July 2016 gained an equal weighted average of +6.56%. This is contrasted by the Toronto Stock Exchange gain of +4.65% in the same period of time. The top performing stock was Cogeco Inc. (CGO.TO) with a gain of +50.94%. The worst performing stock was Cominar REIT (CUF-UN.TO) with a decline of –23.17%.
Below is the 1-year performance of the Canadian dividend stocks from our June 2016 watch list:
Below is the performance of our Canadian Dividend Watch List dated May 25, 2016:
It appears that the analyst call on Cameco (CCO.TO) was quite accurate. All other stocks on the list fell short of analyst expectations. When compared to the Toronto Stock Exchange gain of +11.84%, the watch list from last year severely underperformed with an equal weighted decline of –5.82%.
One stock that we had particular interest in was Gluskin Sheff (GS.TO). At the time, we said the following of the stock:
“…we believe that GS.TO is in a general range of undervaluation and should be considered at the current price. Additional attention should be paid to the worst case target of the stock falling to the $7.25 price. Our fair value target price from the current level is $20.87 or approximately +27% above the current price.”
On two occasions in the last year Gluskin Sheff approached, but never achieved, our fair value target price. Once on September 6, 2016 at an intraday high of $19.45 and again at $19.93 on February 14, 2017.
Merely approaching our fair value target is sufficient to warrant the sale of some/all of the stock in a qualified retirement account. However, the stock would have failed to trigger a sale of the stock in a non-qualified account. With GS.TO sitting slightly below last year’s price we are publishing an updated Altimeter for a perspective on where the stock might be on a dividend/price basis.