One of the Dividend Indices in the family of Dow Jones Stoxx Dividend Indices is the "Dow Jones STOXX® Americas Select Dividend 40 Index". The objective of this index is "to measure the performance of the highest dividend-paying stocks relative to their home markets."
Some of the unique features of these STOXX Dividend indices are:
- Stocks are screened by defined historical non-negative dividend-per-share growth rates and dividend to earnings-per-share ratios.
- Index components are weighted by their indicated annual net dividend yield, i.e. the largest dividend-yielding companies have the highest weight in the index.
- Fixed component numbers and cap factors guarantee index diversification
As of June 30, 2009 the dividend yield of this index was 3.97%.
In this post, let's take a look at the 12 Canadian components in the Dow Jones STOXX® Americas Select Dividend 40 Index. The Canadian companies represented in this index are:
- Bank of Montreal (NYSE:BMO)
- Great-West Lifeco Inc (OTC:GWLOF)
- Power Financial Corp (OTCPK:POFNF)
- CIBC Group (NYSE:CM)
- IGM Finanacial Inc (OTCPK:IGIFF)
- Power Corp. of Canada
- Bank of Nova Scotia (NYSE:BNS)
- TD Banking Group (NYSE:TD)
- National Bank of Canada
- Royal Bank of Canada (NYSE:RY)
- Transcanada Corp (NYSE:TRP)
- Enbridge Inc (NYSE:ENB)
Of the twelve companies, the five major banks are included and two energy companies are listed on the US exchanges as inter-listed stocks. All the Canadian banks have weathered the credit crunch well and have rebounded strong from the March lows. The most profitable bank in Canada, Royal Bank (RY), has a 3.86% yield now and has more than doubled from recent lows. The stock has been a consistent performer over many years. Scotia Bank (BNS) has a significant presence in Mexico and the Caribbean. BMO currently pays a 5.18% dividend. TD and Canadian Imperial Bank (CM) have also come back strong. The five banks are solid long-term investment plays.
Enbridge Inc (ENB) operates in the crude oil and natural gas industry while TransCanada (TRP) operates pipelines and also in the energy area. TRP has a 4.96% yield. Enbridge recently announced that it's on target to achieve 20%+ growth this year and 10%+ thru 2013.