Category Archives: Canadian Dividend Watch List

Canadian Dividend Watch List: July 25, 2012

Posted on July 25, 2012 by | Leave a comment

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
IAG.TO Industrial Alliance Insurance and Financial Services 20.74 18.52 1.13 4.60% 0.81 0.92%
PWF.TO Power Financial Corporation 24.2 9.49 2.53 5.80% 1.47 2.46%
IGM.TO IGM Financial Inc. 39.28 11.39 3.45 5.60% 2.26 2.91%
SJR-B.TO Shaw Communications, Inc. 19.58 13.05 1.52 5.00% 2.5 3.43%
TCL-A.TO Transcontinental Inc. 9.42 0 -1.48 6.20% 0.74 3.86%
CCA.TO Cogeco Cable Inc. 35.99 7.06 5.05 2.80% 1.64 4.47%
FFH.TO Fairfax Financial Holdings 376.57 33.21 0 2.70% 0 4.60%
EMP-A.TO Empire Company Limited 55.97 11.22 4.99 1.70% 1.13 4.71%
AGF-B.TO AGF Management Limited 11.29 11.88 1.02 9.60% 0.91 4.73%
GS.TO Gluskin Sheff + Associates, Inc. 13.9 10.22 1.27 4.70% 5.38 5.54%
POW.TO Power Corporation of Canada 22.21 9.1 2.42 5.20% 1.12 6.27%
BNS.TO The Bank Of Nova Scotia 50.61 11.25 4.51 4.30% 1.91 6.46%
CWB.TO Canadian Western Bank 25.78 11.36 2.19 2.50% 1.74 7.42%
CNQ.TO Canadian Natural Resources Limited 27.5 9.96 2.75 1.50% 1.3 7.51%
TRI.TO Thomson Reuters Corporation 28.34 0 -1.61 4.60% 1.42 8.58%
GWO.TO Great-West Lifeco Inc. 20.84 9.6 2.15 5.90% 1.64 8.83%

Watch List Summary

On our list this week is Industrial Alliance Insurance and Financial Services, Inc. (IAG.TO).  Yahoo!Finance indicates that IAG is a provider of  “…life and health insurance company, engages in the provision of various insurance products, savings and retirement plans, and other financial products and services in the United States and Canada.”

According to Dow Theory, IAG has the following downside targets:

  • $20.04
  • $16.90
  • $13.75

We also ran Edson Gould’s Altimeter on IAG and found that the dividend of the last few years distorted the indicator.  To adequately adjust for the distortions, we provided IAG with an annual dividend increase of $0.0157 from February 2000 to the present annual dividend of $0.98.  Using this adjustment provided us with the following downside targets:

  • $17.15
  • $12.25
  • $7.35

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Our view is that $16.90 and below are appropriate levels to start acquiring IAG.  Even at the current price, the dividend of 4.60% allows for a slight downside cushion provided it is understood that the stock must be held for 1 year.

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Canadian Dividend Watch List: May 25, 2012

Posted on May 26, 2012 by | Leave a comment

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 Price/Book % Chg Low Go to FP
AGF-B.TO AGF Management Limited $11.65 8.97 1.13 0.95 0.95% →
SJR-B.TO Shaw Communications, Inc. $19.52 18.86 1.44 2.59 2.90% →
IGM.TO IGM Financial Inc. $40.10 12.17 3.45 2.35 3.59% →
IAG.TO Indu'l Alliance Insur. and Finan'l Services $25.83 8.58 1.13 0.97 4.36% →
TCL-A.TO Transcontinental Inc. $9.76 6.9 0.23 0.67 4.50% →
EMP-A.TO Empire Co. Ltd. $56.00 10.24 4.39 1.15 6.54% →
BNS.TO The Bank Of Nova Scotia $50.95 11.19 4.74 2.02 7.17% →
CCA.TO Cogeco Cable Inc. $45.88 - 0.24 1.95 8.00% →
PWF.TO Power Financial Corporation $25.66 11.53 2.53 1.57 8.64% →
HCG.TO Home Capital Group Inc. $43.03 7.63 5.74 1.8 8.83% →
CWB.TO Canadian Western Bank $26.18 12.64 2.16 1.81 9.08% →

Watch List Summary

AGF Management (AGF.B): (According to the Financial Post, “AGF Management Limited is a wealth management corporation whose principal subsidiaries provide mutual fund management and distribution, trust products and services, investment advisory services and third-party fund administration services for clients.”

AGF is skating on thin ice with a dividend payout ratio of 94%.  This means that if the company were to experience any decline in earnings (likely) then there is the prospect of the company cutting the dividend.  Currently, AGF has a dividend yield of 9.30% which suggests that a dividend cut isn’t too far away if things don’t improve soon.

Currently, $11.13 is the point that will either make or break the stock price. If AGF.B cannot stay above $11.13 then there is a good chance that the stock will revisit the prior low of $6.46, a decline of –42%.  According to Dow Theory, AGF has the following downside targets:

  • $11.13
  • $9.58
  • $8.03
  • $6.46

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Industrial Alliance Insurance and Financial Services (IAG.TO):  According to Yahoo!Finance, IAG.TO is “a life and health insurance company, [which] engages in the provision of various insurance products, savings and retirement plans, and other financial products and services in the United States and Canada.”

IAG.TO has a dividend yield of 3.80% and a payout ratio of 89%.  Again, with such a narrow margin of safety, in terms of the dividend payout ratio, investors should not be surprised if a dividend cut were to take place.   According to Dow Theory, IAG.TO has the following downside targets:

  • $32.55
  • $23.20
  • $13.85

With IAG.TO trading at $25.83, the $23.20 price is a critical support level for the stock.  This stock would be considered for purchase by us when, and if, it reaches the $18.50 level.  According to Dow Theory, IAG.TO has a fair value of $27.87.

Watch List Performance Review

In our ongoing review of the NLO Canadian Dividend Watch List, we have taken the top five stocks from our May 13, 2011 list (found here) and have checked their performance, approximately one year later, as compared to the S&P/TSX Composite index. The top five companies from that list can be seen in the table below.

Symbol
 Name 2011 2012 % change
TRI Thomson Reuters 37.78 28.51 -24.54%
RCI.B Rogers Comm. 35.82 35.5 -0.89%
SJR.B Shaw Comm. 20 19.11 -4.45%
EMP.A Empire Co. Ltd. 54.45 57.83 6.21%
CJR.B Corus Ent. Inc. 20.44 23.64 15.66%
      Average: -1.60%
         
S&P/TSX Toronto Stock Exchange     -15.32%

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While our watch list was in the negative at the end of the year, it did well compared to the Toronto Stock Exchange over the same period.  In fact, 4 of the five stocks on our list were able to achieve our goal of gains of +10% in less than 6 months.

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Canadian Dividend Watch List: April 2, 2012

Posted on April 2, 2012 by | 3 comments

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 Price/Book % from Low
GS.TO Gluskin Sheff + Associates, Inc. $14.77 8.98 1.34 5.49 5.50%
EMP-A.TO Empire Co. Ltd. $58.06 10.53 4.39 1.18 11.18%
SNC.TO SNC-Lavalin Group Inc. $40.75 15.01 2.49 3.2 11.46%
TRI.TO Thomson Reuters Corporation $29.13 17.27 -1.68 1.47 11.61%
SJR-B.TO Shaw Communications, Inc. $21.39 20.4 1.44 2.86 11.99%
AGF-B.TO AGF Management Limited $15.63 11.92 1.13 1.22 12.28%
TLM.TO Talisman Energy Inc. $12.90 - 0.38 1.29 13.76%
IGM.TO IGM Financial Inc. $46.71 14.09 3.48 2.76 13.79%
FTS.TO Fortis Inc. $32.48 18.23 1.74 1.57 15.01%
RCI-B.TO Rogers Communications Inc. $40.06 13.95 2.86 5.76 16.96%
TRP TransCanada Corp. $43.63 19.79 2.17 1.88 17.00%
BNS.TO The Bank Of Nova Scotia $56.15 12.27 4.74 2.22 18.11%
  1. stocks are in Canadian dollars except TRP, which is calculated in U.S. dollars.

Watch List Summary

This watch summary will review Edson Gould’s Altimeter when applied to Gluskin Sheff (GS.TO) and SNC-Lavalin (SNC.TO).  First up is the Altimeter for Gluskin Sheff (GS.TO).  According to Yahoo!Finance, Gluskin Sheff “is a publicly owned investment manager. The firm also provides wealth management services.”

Based on the current quarterly dividend of $0.163, GS.TO is bouncing along the undervalued range of $14.11.  Because the middle of the undervalued/overvalued range is $19.42 (fair value), we’re expecting that the next upside target is to the fair valued level or +31% above the closing price of $14.77.

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As always, we’re primarily concerned with the worst case scenario.  For GS.TO, the downside target is based on the December 2008 low at $6.71.  Any substantial decline below the $14.11 level should result in GS.TO falling to $10.41.  If GS.TO were to fall as low as $6.71 it would be in alignment with our rule of preparing for a decline of -50% or more and allocating our capital accordingly.

Our next stock is SNC-Lavalin (SNC.TO).  According to Yahoo!Finance, SNC.TO “provides engineering and construction, and operations and maintenance services worldwide.”  Edson Gould’s Altimeter, as applied to SNC-Lavalin Group (SNC.TO) presents a pattern that is quite unique.  Again, Edson Gould’s Altimeter compares the current stock price as it relates to the quarterly dividend that is currently being paid.  SNC.TO has a descending Altimeter with the normal undervalued range at $43.60.  The next upside target for SNC.TO is at $55, however, we’re waiting for resolution on the potential downside action.

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Our worst case scenario is that SNC.TO will continues on the declining trend and reach our downside target of $30.80.  In our assumption, the worst case downside target continues to slide as time passes until proven otherwise.  Again, while there are major upside targets at $55 and $69, we’d rather wait for the final verdict on retracing back above $43.60 or falling to $30.80.

Watch List Top 5 Performance Review

In our ongoing review of the NLO Canadian Dividend Watch List, we have taken the top five stocks from our April 13, 2011 list and have checked their performance, approximately one year later, as compared to the S&P/TSX Composite index.  The top five companies from that list can be seen in the table below.

Symbol Name 4/13/2011 4/2/2012 % change
Rogers Comm. CL. B 34.32 40.06 16.72%
SJR-B.TO Shaw Comm. CL.B 19.64 21.39 8.91%
EMP-A.TO Empire Co. CL.A 53.67 58.06 8.18%
TRI.TO ThomsonReuters 39.1 29.13 -25.50%
POW.TO Power Corp 27.9 26.75 -4.12%
Average change 0.84%
GSPTSE S&P/TSX Composite 13,833.64 12,507.06 -9.59%

Among the top five companies on our watch list from last year, three of the five companies exceeded the return of the Toronto Stock Exchange index.  Power Corp. declined less than the index while ThomsonReuters fell by more than -25%.  Taken as a group, the average return was +0.84% as compared to the –9.59% for the representative index.

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