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Top 20 Dividend Stocks – May 2011 Edition

Questrade Democratic Pricing - 1 cent per share, $4.95 min / $9.95 maxOver the past months, I have been doing regular Stock Analysis and discussing different stocks and I realized that I had not shared the stocks that retain my attention. As such, I thought I’d go through my watch list and pull out the Top 20 Dividend Stocks based on my technical screening and the dividend yield. I watch about 100 stocks between the Canada and the US and I update my list as I find others that I believe worthy of being on my watch list. I have about 7 sectors on my watch list and I usually keep 6 to 12 stocks in each. The list is quite varied as it is composed of REITs, Income Trust and Companies with either small, medium or large caps.

If you want to get access to some quick stock research on a technical front, try one of the services below:

Top 20 Dividend Stocks – Technical Screening

The technical screening is based on 4 criteria that I can easily fetch from Google Finance. Over time I should build enough data for historical trends but I don’t have it and I don’t have a team working for me :) I started looking at the Beta but I have not figured out how to mathematically weight it in yet… I am also not sure if I want to give it too much weight. I’d rather focus on the Debt-To-Equity ratio which I started entering but I am not done. For now, the following criteria are feeding the score.

  • P/E : Target is 15
  • 52 Week Range : The lower in the range the higher the score
  • Yield : Target is above 3% (this one is manual)
  • Payout Ratio : Under 75%
TickerNameStockMarket CapYieldScore Max. 6
RCI.BRogers Communication$35.63$19.703.96%5.11
SLF.TOSun Life Financial$30.01$17.354.77%5.10
RSI.TORogers Sugar$5.17$0.466.53%4.95
BMO.TOBank of Montreal$60.89$34.624.61%4.71
REF.UNCanadian REIT$33.67$2.264.10%4.69
TAT&T$31.06$183.945.48%4.60
LMTLockheed Martin Corp.$80.34$28.083.77%4.56
TA.TOTransAlta$21.27$4.725.40%4.56
LLYLilly$39.15$45.325.03%4.53
CPBCampbell Soup$35.17$11.263.18%4.53
YLO.TOYellow Media$4.57$2.4014.71%4.50
CINFCincinnati Financial Corp.$30.92$5.045.18%4.43
MSFTMicrosoft$24.57$207.192.56%4.32
BNS.TOScotia Bank$57.61$62.133.62%4.30
COS.TOCanadian Oil Sands$29.74$14.413.87%4.29
HSE.TOHusky$27.87$25.004.32%4.26
CM.TOCIBC$82.83$33.824.22%4.17
VNR.TOValener$16.34$0.616.18%4.12
TD.TOToronto Dominion$82.24$72.683.23%4.09
POW.TOPower Corporation$28.18$11.584.09%4.09

I currently own RCI.B, SLF, BMO, AT&T, TA and BNS

Top 20 Dividend Stocks – Dividend Yield

Since I was compiling the list above, I thought I’d share the highest paying stock on my watch list so you can see the difference between simply looking at yield versus other elements. The yield by itself can be an indicator to look further into an investment but by itself, it should not signal a purchase.

I have purposely excluded REITs from this list. The yields are usually high for many of them and I did not feel they belonged with the others. When there isn’t a score, it’s because the P/E is negative.

TickerNameStockMarket CapYieldScore Max. 6
YLO.TOYellow Media$4.57$2.4014.71%4.50
JE.TOJust Energy$14.90$2.048.32%3.49
ERF.TOEnerplus Corp$29.15$5.227.39%2.51
KEG.UNThe Keg Royalty Income Fund$13.28$0.157.26%3.41
BA.TOBell Alliant$27.10$6.177.02%-
PBH.TOPremium Brands Holding$16.72$0.307.01%2.70
LIQ.TOLiquor Store$15.50$0.356.99%3.22
PPL.TOPembina Pipeline$23.42$3.916.67%2.24
RSI.TORogers Sugar$5.17$0.466.53%4.95
CPG.TOCrescent Point Energy$44.56$12.046.19%2.15
VNR.TOValener$16.34$0.616.18%4.12
KMPKinder Morgan Energy$72.09$22.996.12%2.49
DAY.TODaylight Energy$10.21$2.155.85%-
TAT&T$31.06$183.945.48%4.60
BCE.TOBell Canada$37.90$29.345.47%3.76
AGF.BAGF Management$19.47$1.865.37%2.66
CINFCincinnati Financial Corp$30.92$5.045.18%4.43
MBT.TOManitoba Telecom$33.25$2.185.10%2.41
CGX.TOCineplex Galaxy$25.28$1.465.05%2.11

I currently own LIQ, BCE, CPG, AT&T, and JE

Thoughts

For those that follow Intel (INTC), when it was trading at around 19$-20$, it was at the top of the score list. I had no funds available unfortunately and I don’t sell holdings to chase other investments either. It was a missed opportunity but they come and go.

Yellow Media (YLO) is ranking high in both lists simply due to the fact that the stock has been beaten recently. The P/E is really low, it’s trading at the bottom of its 52-week range and the yield is just insane. The insane yield is, well, just insane … I have been watching this stock for a couple of years and it has always paid this much and I can’t believe that it is sustainable. The company appears to be re-inventing itself, and at some point they will need the money for expenditure I imagine …

The financial sector is currently out of favor but don’t discount the energy sector. We’ll always need energy – whether it’s to heat our home or to drive our cars. Consumers may run energy price comparison to save money, but as an investor, you want to decide the type of energy you want to invest in – fuel, natural gas, or electricity to name a few.

Readers: What do you think of the lists? Anything missing?

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23 Responses to "Top 20 Dividend Stocks – May 2011 Edition"

  1. radissoncapital says:

    You should check out EXCHANGE INCOME (EIF).
    It has raised its monthly dividend last month and yields 7.14%.
    Also gives 5% bonus to drippers. Great company!

  2. You are the second one to mention Intel. They are yielding over 3% now. I have definitely got to take a look since I bet my options strategy could work with them and enhance my returns.

    • The Passive Income Earner says:

      I had Intel back in September and bought for just below 20$ and sold just above 22$. I wasn’t holding it in the proper account for taxes and I ended up taking my profits and moving on. I swapped it for BMO in the end.

  3. Count me among the masses that missed the opportunity on INTC. I was watching it and seen it dip below my buy mark, right before my eyes. My personal feelings on investing in tech companies kept me from pulling the trigger. I mulled on it for about 3 hours. I ended up letting it go by. I think if the opportunity presents itself I’ll reverse that decision.

    Thanks for your list! I like AT&T on my side of the market. CINF is an interesting play, but I’m a little concerned about the slowing growth.

    Take care :)

    • The Passive Income Earner says:

      I just added CINF to my watch list. I’ll be reviewing it as I have been looking into the life insurance companies recently.

  4. Shawn says:

    Great post !! This is what seperates you from the other bloggers. thepassiveincomeearner.com is now first on my blog websites to check in the mornings. Keep it up.

  5. Be'en says:

    I haven’t started investing in individual stocks yet. Am in the process of moving out of mutual funds and in to ETFs. Is there someone doing and providing similar analysis of Canadian and US ETFs? I don’t want to buy overvalued ETFs — Rob Bennet insists that one should look at P/E10 of each ETF before buying and also to determine % asset allocation.

    • The Passive Income Earner says:

      I have not looked at ETF much. I held CDZ a while back. I think for ETFs, you need to look at the holdings and the ETFs syllabus on their investment strategy.

  6. I was wondering why MSFT was on your top 20 list and not Intel. It still fits your criteria doesn’t it? The PE is still pretty low. I guess it is trading at 52 weeks high.

    I have some INTC in my regular account and I’m going to transfer that to the dividend account. I’ll probably hold it a while since the payout is pretty good.

    Yellow Media has such high yield. I need to check them out. Thanks!

    • The Passive Income Earner says:

      That’s right, I have INTC on the watch list but at the current price, it moved down the list. It doesn’t make it a bad investment it just means there could be better opportunity if you were to buy today. This is just a snapshot in time :)

  7. The Passive Income Earner says:

    I’d like to highlight that the Technical Top 20 is very dynamic from month to month based on how markets are doing. Since I track companies I have shown interest in and may be interested in buying, the list represents a snapshot in time. Since I don’t always have money available to invest, my watch list helps me filter out what may be a better entry point versus another investment.

    As mentioned, I have INTC in the list and many other US Dividend Aristocrats but from a pure technical score, they aren’t as high since they are trading higher with a higher p/e. The same goes for energy stocks …

    My future purchases (which I intend to do in the coming months), may not even include any of the stocks on the list above (as of the weekend) since I need to look at my diversification and other factors that the technical list doesn’t always show.

  8. Nice screens!

    Totally agree with your comment above, re: ETFs. Even dividend ETFs can be very different breeds of the same animal.

    I’ve always been curious of PBH. Might look at that at some point for the TFSA… You?

  9. gibor says:

    @PIE, are you planning to include in your metrics values like PEG, Quick Ratio, P/S?

    BTW, you have mistake in 1st table:
    COS.TO Canadian National Resources
    I have from list: RCI, BMO, CM, LIQ, CPG, DAY (why no score on it?)

    • The Passive Income Earner says:

      Hi Gibor,
      Thanks for pointing out the name error with COS. I have fixed it.

      Daylight Energy currently a has negative EPS and Google doesn’t like the formula and math I do :) so it puts #N/A in the field. I’ll look at fixing it. Otherwise it would be 2.42 since it gets 0 for 2 of the criteria.

  10. gibor says:

    Yes, EIF has a nice yield and looks like a solid company, but IMHO it’s too expensive now, P/E 23, Payout 125

  11. gibor says:

    @PIE, was wondering if you did calculations for companies like AGNC, NLY and other with huge yield. I think they should be on your list.
    Agree with you about Beta, it doesn’t give much indication (even for viotility), just if stock goes with index or against. For example, BA have negative Beta…..
    On other hand PEG, Quick Ratio, P/S are easy to include. For example, PEG and Quick ratio better when <1, P/S etter when <2.
    Debt-To-Equity ratio would be interesting.
    P.S. very interesting topic

  12. richard says:

    I believe Dividend history is also important, I would recommend including Duke energy and dropping Just Energy from the list, Duke energy is near a 10 year low, as well as it has been paying out dividends for the past 85 years.
    Richard

  13. al says:

    YLO stock down to 0.85

    I dont know about the dividend pay, is it still a good buy? or wait for it go to lower?

    • The Passive Income Earner says:

      Dividends were cut and the stock is almost a penny stock now … I am staying clear from YLO.

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  15. Thanks for sharing this information. Well done!

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