Last Monday, I pulled out the Best US Stocks for 2012 [1] with 182 companies listed in this post. As mentioned previously, I wanted to do the same thing on the Canadian stock market to be fair and to show you which companies are interesting to own in Canada even if you are a US citizen. You know this by now; I’m a big fan of some Canadian stocks as I think that the banking industry in Canada along with the resources sector can bring a lot to one’s portfolio.
While I was surprised to pull out 182 stocks on the US stock market, I was even more surprised to pull out…32 stocks on the Canadian market with the same metrics!
Canadian vs US
As a Canadian myself, it is obviously easier to buy Canadian stocks as I avoid currency risk and tax complications (depending on the type of account you are trading in). However, in the light of this chart showing a pitiful 32 stocks (of which 7 are banks + 6 others related to financial services and 4 telecoms), as Canadians you have no other choice but to consider US stocks as well. Just for the sake of diversification, you need to look elsewhere if you want to build a strong dividend portfolio. This was also the reason why I’ve put only 9 Canadian stocks in my Best Dividend Stocks for 2012 [2] eBook.
Best Dividend Stocks for 2012
The chart is based on the same filters:
Dividend Yield over 3%
Dividend Payout Ratio under 75%
5 Years Dividend Growth positive
Ticker Name INDUSTRY_SUBGROUP Price Dividend Yield Payout Ratio Dividend Growth 5 Years
IGM IGM Financial Inc Invest Mgmnt/Advis Serv 44.79 4.8 73.99 6.96
SJR/B Shaw Communications Inc Cable/Satellite TV 19.79 4.65 72.56 26.15
CLK ClubLink Enterprises Ltd Diversified Operations 6.41 4.55 70.88 4.56
GWO Great-West Lifeco Inc Life/Health Insurance 19.53 6.3 70.37 5.81
CFN-U Carfinco Income Fund Finance-Consumer Loans 6.92 5.2 68.99 2.73
MKP MCAN Mortgage Corp Finance-Mtge Loan/Banker 13.1 8.24 67.51 11.76
BCE BCE Inc Telecom Services 41.14 5.27 62.45 8.16
T TELUS Corp Telecom Services 56.95 4.07 62.09 12.94
X TMX Group Inc Finance-Other Services 41.5 3.85 58.15 3.92
CDL/A Corby Distilleries Ltd Beverages-Wine/Spirits 15.33 3.92 58.14 3.35
CVL Cervus Equipment Corp Retail-Gardening Prod 15 4.8 57.81 6.72
CTY Calian Technologies Ltd Consulting Services 17.19 6.06 56.69 23.61
MX Methanex Corp Chemicals-Specialty 22.8 3.1 56.23 3.76
BMO Bank of Montreal Commer Banks Non-US 54.94 5.1 54.13 4.38
CEU Canadian Energy Services & Technology Corp Oil-Field Services 11.41 4.73 53.47 14.37
BDT Bird Construction Inc Building&Construct-Misc 11.49 5.76 53.45 17.6
EH easyhome Ltd Rental Auto/Equipment 6.78 5.01 51.91 7.21
RCI/B Rogers Communications Inc Cellular Telecom 38.81 3.65 48.3 70
CM Canadian Imperial Bank of Commerce/Canada Commer Banks Non-US 73.6 4.89 47.74 4.93
RY Royal Bank of Canada Commer Banks Non-US 48.95 4.41 46.61 7.63
CJR/B Corus Entertainment Inc Multimedia 20.38 4.26 45.32 20.49
NDN Nordion Inc Medical Products 8.34 4.92 44.63 25.14
BNS Bank of Nova Scotia Commer Banks Non-US 49.48 4.21 44.36 6.45
ADW/A Andrew Peller Ltd Beverages-Wine/Spirits 9.3 3.87 43.12 9
TD Toronto-Dominion Bank/The Commer Banks Non-US 73.45 3.7 40.57 13.93
GH Gamehost Inc Casino Hotels 11.14 7.9 39.5 3.06
NA National Bank of Canada Commer Banks Non-US 71.47 4.2 38.36 1.2
LNF Leon's Furniture Ltd Retail-Home Furnishings 12.2 3.28 35.54 6.76
LB Laurentian Bank of Canada Commer Banks Non-US 47.39 3.8 33.69 6.91
ACD Accord Financial Corp Finance-Commercial 6.87 4.37 31.91 8.45
MRD Melcor Developments Ltd Real Estate Oper/Develop 12.4 3.23 23.47 5.92
MG Magna International Inc Auto/Trk Prts&Equip-Orig 32.89 3.15 10.48 2.95
Out of this list, I’ve published several dividend stock analyses over at Canadian Dividend Stock [3] including the following:
BCE [4]
Telus – T [5]
Corus – CJR.B [7]
TD Bank – TD [9]
Royal Bank – RBC [10]
BMO – BMO [11]
ScotiaBank – BNS [8]
CIBC – CM [6]
Rogers – RCI.B [12]
Shaw Communications – SJR.B [13]
Another great option for Canadian investors that is not listed in this article is to consider Canadian REITs [14]. But even then, this is not enough to cover all industries and have a well diversified portfolio. Unfortunately, when a sector is not doing so well or show some concerns from investors; all stocks related to this industry will go bad.
Therefore, you could think that building a “bank” portfolio along with a few other stocks and a few REITs may be good enough. In fact, such a portfolio would payout some healthy dividends and you could think it’s a good way to invest. However, being concentrated in a couple of sectors also means that you are dependent on their growth to perform over the long term. If you know which sectors are going to perform over the next 5 years, then, you are all set. But unfortunately, we don’t see such crystal ball on sale at Wal-Mart yet…
If You Are Looking For The First Canadian Dividend Book – Here it Is:
In this book, we cover 3 majors issues: