Let’s see the links worth checking out from around…

1. Monthly Dividend Stocks @ DGI.

2. Dividend Investing Will Make You Rich @ IS.

3. Demystifying Advantages @ Barel Karsan.

4. Should You Invest in the Stock Market in Your 20s? @ Studenomics.

5. Taking Out Life Insurance @ Buy Like Buffett.

6. Freedom Fund Update – February 2012 @ Dividend Mantra.

7. Will Actively Managed Mutual Funds Ever Go Away? @ Canadian Finance Blog.

8. Dividend Stocks Worth the Risk @ D4L.

9. 10 High-Yield S&P 500 Dividend Stocks With Growing Dividends @ DGS.

10. Why Does Everyone Want to Buy a Home Instead of Renting? @ PIN.

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We are starting the month of February with our traditional TSX 60 Dividend Yield and Ex-Dividend Date publication.

A few notes about the TSX60 and its dividends

Only 11 stocks from the TSX60 made the cut to my Best Canadian Stocks for

Only 31 stocks from the TSX60 pay higher than 2% dividend

Only 23 stocks pay higher than 3% dividend (and you are going to tell me that size matters?)

We have covered 19 stocks from the TSX60 on Canadian Dividend Stock

We have selected 6 member of the TSX60 in our Dividend Growth Index

We have covered 5 stocks from the TSX60 in our Best Dividend Stocks for 2012 eBook

I hold positions in 4 members of the TSX60 (HSE, NA, BNS, T)

Here’s the TSX60 Dividend Yield and Ex-Dividend Date

Ticker	Name	Price	Dividend Yield	Payout Ratio	Ex-Dividend Date
ERF	Enerplus Corp	23.9	9.04	302.2	08/02/2012
SLF	Sun Life Financial Inc	20.09	7.17	50.94	27/02/2012
TA	TransAlta Corp	20.36	5.7	146.33	28/02/2012
BCE	BCE Inc	40.88	5.31	62.45	13/03/2012
PWT	Penn West Petroleum Ltd	21.85	4.94	303.54	28/03/2012
ARX	ARC Resources Ltd	24.31	4.94	120.21	24/02/2012
HSE	Husky Energy Inc	24.49	4.9	86.96	21/03/2012
SJR/B	Shaw Communications Inc	19.9	4.87	72.56	13/02/2012
COS	Canadian Oil Sands Ltd	24.86	4.83	101.13	15/02/2012
BMO	Bank of Montreal	58.29	4.8	54.13	26/04/2012
POW	Power Corp of Canada	24.38	4.76	61.32	21/03/2012
CM	Canadian Imperial Bank of Commerce/Canada	76.25	4.72	47.74	26/03/2012
TRI	Thomson Reuters Corp	27.54	4.6	106.62	20/02/2012
MFC	Manulife Financial Corp	11.71	4.44	N/A	17/02/2012
ECA	Encana Corp	19.21	4.28	39.36	12/03/2012
RY	Royal Bank of Canada	52.37	4.12	46.61	24/04/2012
T	TELUS Corp	56.52	4.1	62.09	07/03/2012
TRP	TransCanada Corp	41.25	4.07	90.38	27/03/2012
BNS	Bank of Nova Scotia	51.53	4.04	44.36	30/03/2012
NA	National Bank of Canada	75.22	3.99	38.36	20/03/2012
RCI/B	Rogers Communications Inc	38.55	3.68	48.3	14/03/2012
FTS	Fortis Inc/Canada	33.39	3.59	85.61	13/02/2012
TD	Toronto-Dominion Bank/The	77.54	3.51	40.57	03/04/2012
ENB	Enbridge Inc	37.73	2.99	67.29	13/02/2012
MG	Magna International Inc	41.42	2.5	10.48	09/03/2012
SC	Shoppers Drug Mart Corp	41.5	2.41	33.13	28/03/2012
L	Loblaw Cos Ltd	36.4	2.31	34.36	07/03/2012
TLM	Talisman Energy Inc	11.98	2.27	62.25	30/05/2012
WN	George Weston Ltd	65.11	2.21	289.98	07/03/2012
CVE	Cenovus Energy Inc	36.59	2.19	60.52	07/03/2012
BBD/B	Bombardier Inc	4.64	2.16	23.67	09/05/2012
CNR	Canadian National Railway Co	75.63	1.98	23.81	07/03/2012
TCK/B	Teck Resources Ltd	42.52	1.88	15.86	12/06/2012
CTC/A	Canadian Tire Corp Ltd	64.26	1.87	16.27	N/A
SAP	Saputo Inc	40.84	1.86	28.58	01/03/2012
AEM	Agnico-Eagle Mines Ltd	37.59	1.75	32.52	24/02/2012
CCO	Cameco Corp	23.26	1.72	21.4	27/03/2012
BAM/A	Brookfield Asset Management Inc	30.43	1.72	21.61	25/04/2012
CP	Canadian Pacific Railway Ltd	71.51	1.68	34.74	21/03/2012
SNC	SNC-Lavalin Group Inc	51.63	1.63	23.5	14/03/2012
MRU/A	Metro Inc	54.74	1.57	19.96	07/02/2012
IMG	IAMGOLD Corp	16.73	1.55	10.66	29/06/2012
GIL	Gildan Activewear Inc	21.82	1.41	0	15/02/2012
THI	Tim Hortons Inc	48.86	1.39	14.5	05/03/2012
SU	Suncor Energy Inc	34.54	1.27	22.73	29/02/2012
ABX	Barrick Gold Corp	49.46	1.26	13.83	24/02/2012
POT	Potash Corp of Saskatchewan Inc	46.98	1.19	7.78	10/04/2012
YRI	Yamana Gold Inc	17.35	1.18	14.28	27/03/2012
ELD	Eldorado Gold Corp	15.19	1.18	0	08/08/2012
G	Goldcorp Inc	48.5	1.13	11.12	14/02/2012
NXY	Nexen Inc	17.97	1.11	18.18	07/03/2012
K	Kinross Gold Corp	11.33	1.06	9.15	20/03/2012
SLW	Silver Wheaton Corp	35.77	1.05	0	14/03/2012
IMO	Imperial Oil Ltd	47.78	1	11.06	01/03/2012
CNQ	Canadian Natural Resources Ltd	39.72	0.91	19.21	14/03/2012
AGU	Agrium Inc	80.83	0.57	2.33	12/06/2012
FM	First Quantum Minerals Ltd	21.96	0.49	N/A	10/04/2012
IMN	Inmet Mining Corp	67	0.3	3.12	23/05/2012
VRX	Valeant Pharmaceuticals International Inc	48.56	0	N/A	N/A
RIM	Research In Motion Ltd	16.72	0	0	N/A

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I’m sure you have heard of the Wall Street Journal claiming that the Dividend Bubble is going to burst soon. If you haven’t, trust me, you are not missing much! The rationale behind a growing dividend bubble is that most investors are leaving the equity market for bonds while the most courageous are putting their “risk” within dividend paying stocks.

Do I have to tell you that 43% of the S&P500′s annualized return comes from Dividend stocks?

That dividend stocks provide a great buffer from capital losses with their regular dividend payouts?

That dividend stocks are paying the investor to wait and therefore, are less volatile than non-dividend paying  stocks?

Well I guess that I have told this to more than a few people, those who are suddenly turning towards dividend stocks since the 2008 market crash!

Between 2003 and 2007, the stock market was going so well that many investors preferred high growth potential stocks to steady dividend stocks. This is why companies became very aggressive in returning cash to shareholders; in order to keep their interest. It’s like seeing a guy go to the gym every day and following a strict diet to make sure that his wife will look at him after 10 years of marriage. But then, 2008 arrived and several companies had to cut back on their dividends due to the recession.

Since then, the companies on the S&P 500 have strengthened their balance sheets and they own now double the amount in liquid assets than they had back in 2005 (3 trillion vs 1,5 trillion in 2005). While companies are keeping an incredible amount of cash, they keep giving back to shareholders:

41% of the companies increased their dividend or share buybacks in 2009.

52% followed this trend in 2010.

68% did it in the “rough” market of 2011 (surprising, isn’t?).

Since the money keeps piling up in their bank account, we can expect as much or more dividend increases or share buyback programs in 2012, right? So who’s talking about a dividend bubble again?

What’s a bubble anyway?

If you seriously consider what a bubble is, you get the following definition according to Wikipedia:

“A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation.”

This is pretty accurate if you consider the latest housing bubble; we saw houses that were driven to prices exceeding their valuation. So… how do we value stocks again?

An easy way to do it would be to use the P/E ratio since it gives us an idea of what multiplier of the company’s earnings that we need to put on the table to buy a share. At the moment, the S&P500 is trading at about 14. Historically, this ratio should be between 15 and 16. Therefore, we are far from a stock bubble. While the S&P 500 includes a lot of dividend and non-dividend stocks, I agree with you that this is not the perfect way to assess if dividend stocks are under/over or rightly valued. However, I took a quick peek at my dividend holdings and found the following P/E ratio (I’ve taken VNP off since it’s not a dividend stock):

As you can see, I don’t have any stocks over a P/E ratio of 16 and most of them show a ratio under 13! So if we consider that profits are there, multipliers are low and liquidity is high; can you tell me where you see the dividend bubble?

But I’ll go even further in my analysis by taking stocks that have successfully increased their dividends over the past 6 years. They come from different sectors and are paying different ranges of dividend yield. However, they share 2 points in common; can you tell what they are?

#1 They are showing impressive dividend growth

#2 They are paying more in terms of dividend yield than they used to 6 years ago

Which means that either their dividend rose too fast… or the stock didn’t go up at the same pace…? So you are telling me that we have a bubble while stocks are not raising faster than dividend payout growth???

Honestly, I don’t see where the dividend bubble is, can you tell me?

So if you are like me (BULLISH!), you better check out those opportunities

50 Top Trending Stocks

This is a mix list including NYSE, NASDAQ and TSE stocks. The list is free and you can see which stocks qualify under technical analysis metrics for a strong buy. Check out the list here.

Dividend Growth Index

I’ve gathered 8 dividend bloggers that follow 3 stocks each for a portfolio of 24 strong dividend stocks that has generated a yield over 15% in the last quarter. Check out the index here.

Strong US Dividend Stocks

This is a list of 182 stocks that qualified under strict dividend metric filters (low payout ratio, positive dividend growth, etc.) Check the list here.

29 Dividend Stocks for 2012 eBook

You probably know about it, I’ve done 29 stock analyses and formatted it into an eBook that you can download here.

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Time for the weekly links…

1. What Should I Invest In for 2012? Part-1 @ Dividend Ninja.

2. Intimidation Tactics In The Market @ Barel Karsan.

3. Dividend Investing Is Not Just A Trend @ IS.

4. 5 Years To Become Millionaire @ TFB.

5. Improve Your Finances: Look Up, Not Down @ Canadian Finance Blog.

6. Active Dividend Growth Investing @ DGI.

7. Look for Dividend Stocks @ D4L.

8. How To Assess If The Smith Manoeuvre Is Good For You @ The Passive Income Earner.

9. Stock Market Basics @ Studenomics.

10. Carnival of Personal Finance – Words of Wisdom Edition @ Matt About Money.

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For the first dividend stock analysis of the year (besides my 29 Dividend Stocks for 2012 eBook), I decided to take a look at a beaten up stock that could definitely become a rising star in the upcoming years. For a fact, GNV dropped by 14% in 2011. Was it justified or was Genivar simply a victim of a bad Canadian stock market? Let’s dig further to find out!

Genivar (GNV) Description

Genivar is a leading Canadian engineering services firm offering its expertise in multiple types of buildings for private and public sector clients. Strong from its expertise and the fact that 99% of North American infrastructures need a lifting, GNV grew rapidly throughout the years. GNV used to be a tax sheltered income trust and benefitted from a Canadian tax loophole until January 2011.

GNV Stock Graph

GNV Metrics

Ticker	GNV CN Equity
Name	Genivar Inc
Dividend Metrics
Current Dividend Yield	5.43
5 year Dividend Growth	20.03
1 year Dividend Growth	-26.83
Company Metrics
Sales Growth (1 year)	21.45
Sales Growth (5 year)	33.78
Earnings growth	32.54
P/E ratio	16.25
Payout ratio	120.34
Return on Equity	11.24

GNV Upcoming Dangers and Opportunities

The GNV management team has proven to be resilient and has a clear vision. They grew rapidly through acquisitions over the years. An interesting fact about GNV is that they haven’t used much debt to grow. In fact, their debt to equity ratio is at 34.80%, which shows that GNV prefers to use equity instead of debt to continue its expansion. Therefore, if we were to see rising interest rates, GNV will not be overly concerned about it.

If you look at the dividend metrics, you will see a dividend cut for 2011 as well as a ridiculous payout ratio of 120%. These 2 metrics are much better than it looks. In fact, GNV doesn’t show a great picture of the company since they switched fiscal structures (from income trust distributing most of their income BEFORE tax to a standard company paying dividends AFTER tax).

According to their rapid growth rate and solid balance sheet, financial analysts agree to say that Genivar is able to sustain its dividend over time. Therefore, it could be an interesting play for the future.

Genivar has bought several engineering firms on the market (Decibel Consultants, OptiVert inc., JMH Environmental Solutions Ltd., Dakins Engineering Group Ltd, Consultores REgionales Asociados S.A.S and Delcom Engineering Ltd. just to name the 2011 acquisitions). Such rapid growth will surely look fine on the financial statements in terms of sales growth but will also require an impeccable integration process.

Another factor I like about GNV is the current infrastructure problem in Canada. The Government is stuck with a lot of highways, bridges and buildings that need maintenance. Genivar will definitely benefit from its leader position to get its shares of contracts and assure its profitability over a long period of time.

The only thing that could go wrong with GNV is the aura of corruption that is currently surrounding all construction companies in Quebec. If this aura was to reach engineering firms, the government backed contracts could be an issue.

Final Thoughts on GNV

I like the company, like the growth but I’m not too keen on the poor dividend metrics. I know they have switched from an income trust to a standard company. On one hand, I have a feeling that it’s a bit too early to make a move and on the other I feel that waiting would just prove that it was a great stock to hold… but I missed it!

In the end, I do not intend to purchase GNV at the moment… because I don’t have any liquidity. If not, I would give it some serious thought… what do you think?

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