11 Canadian Dividend Aristocrat Index Components

On August 28, I wrote an article on the Top Canadian Dividend stocks available in the USA as inter-listed stocks.Today's post is an update to that article.

Out of the 37 stocks in the S&P TSX Canadian Dividend Aristocrats Index, there are 11 stocks that are traded in the New York Stock Exchange.

Analysis: Out of the five large banks in Canada, four made it to this list. All four banks have yields of above 6% with BMO having the highest yield at 10.93%. So far, all four haven't announced any cuts in dividend rates. However on Nov 18, ScotiaBank (BNS) announced a writedown of $595 million after taxes "relating to certain trading activities and valuation adjustments." TD has announced that it will have a "trading losses of approximately C$350 million leading to a net loss in its wholesale banking division."

Fourth Quarter Results - Announcement Dates:

RY - December 5
TD - December 4
BMO - November 25
BNS - December 2

Sun Life Financial Services Canada (SLF) and Manulife (MFC) are both insurers. MFC is a good long-term play. Brookfield Properties Corp. (BPO) is a real-estate operator, not a favorite sector now. CNI, CNQ, ENB and IMO all have low dividend yields. They are included in this Aristocrats Index, because they have increased dividends in the past 7 years though the dividend rate is still low.

The above 11 stocks had lower yields back in August. As the market has crashed in the following months, their yields have risen to current levels. For an investor looking to invest in Canada, these stocks might be good picks to research further. Please bear in mind that dividend payments are not guaranteed and may be cut or suspended at any time.

For a full listing

of the Dividend Aristocrats Index, click the link below: TSX-Dividend-Aristocrats-Index-Components

Comments

[Michael D.]

Uhm, all 4 have yields below 6%. BMO and CM might approach 6% but are usually well bought when this happens.

2009 Nov 23 09:06 AM

[clementplace]

Uhm2, BMO reports Tuesday, November 24, 2009, NOT Nov 25th.

2009 Nov 23 11:56 AM

[bob adamson]

Thank you Mr. Hankar.

While the Bank of Montreal is generally a well run bank and its long term prospects are good I would caution your readers to be cautious when researching its common shares for purchase in the near term. I don’t currently hold its common shares but have done so off and on several times over many years and expect to do so again in due course.

Points of caution arguably include the following:
1. The Canadian Banks have deservedly experienced spectacular appreciation since their February of 2009 lows but, arguably are now priced for perfection. This includes BMO.
2. The Canadian dollar is unlikely to enjoy significant further appreciation against the US dollar and may, in fact, retrace modestly. The Canadian economy simply can’t afford a sustained move of the CAN$ above parity with the US$.
3. The Canadian economy (and therefore the future prospects of its banks) has held up well (particularly its domestic component of the economy which is roughly 70% of the total) but its future growth is constrained by the lack of growth in the US and other markets on which its export market (30% of the total national economy) depends.
4. Several of the banks you list are heavily engaged in the US through US subsidiary regional banks.

On a particular point, your statement that BMO has enjoyed “the highest yield at 10.93%.” might be misunderstood by your readers. At its closing on the Toronto Stock Exchange today its common shares were priced to yield about 5.2% annually in dividends and, for the reasons listed above, the further appreciation of their market value in the near term is by no means assured.

2009 Nov 23 06:05 PM

[Leila and Ella]

I think the Canadian banks are a little pricey at this point. I like MFC and have built a position during the recent drop in price. I wish would have bought some IMO in March. You can't go wrong going long on oil and IMO is a good company with a strong balance sheet.

2009 Dec 13 12:44 PM