About a month ago I wrote an article titled, "Century Club Dividend Stocks," highlighting a very impressive list of companies that have continuously paid out dividends for at least one hundred years. Just think about what that means. These companies have been able to pay out a part of their earnings to shareholders during the depression, two World Wars, natural disasters, terrorist events and other economic downturns. As a follow up to the original article, I would like to highlight a smaller, yet no less impressive, list of Canadian century club dividend stocks.
First on the list is Bank of Montreal (NYSE:BMO). BMO is a Canadian retail bank that offers personal banking products and services. Currently yielding a high 4.00% with a moderate payout ratio of 52.3%, BMO has paid dividends every year since 1829. Offering a low PE of 12.56, this stock might be considered relatively cheap for the market today.
Next up is The Bank of Nova Scotia (NYSE:BNS). Based in Toronto, Canada, BNS provides banking services in Canada and internationally that include personal, commercial and corporate lending. Currently yielding a generous 3.60% with a moderate payout ratio of 51.2%, this stock has paid a dividend every year since 1832. Another low valuation financial stock with a current PE of 13.5, BNS in another relatively cheap stock in today's high-priced market.
Another Canadian century club dividend stock is The Toronto-Dominion Bank (NYSE:TD). TD has paid a dividend every year since 1857 and currently yields a favorable 3.40% with a payout ratio of 47.5%. Having a slightly higher PE than the previous two stocks mentioned, TD still is far less than its peers and the S&P at only 14.8. I think I see a trend here with regard to which sector has been paying out dividends for well over one hundred years.
The next one hundred plus year dividend payer is Canadian Imperial Bank of Commerce (NYSE:CM). A diversified financial institution, CM offers many of the same banking services the other Canadian banks have as well as credit, capital market and investment banking services. CM has been paying a dividend since 1868 and currently offers a high yield of 4.10% with a moderate payout ratio of 50.4%. With a PE of 12.1, CM's valuations is well below its peers and the market as a whole.
Finally, rounding out our impressive list is Royal Bank of Canada (NYSE:RY). Headquartered in Toronto, Canada, as most large Canadian banks are, RY currently offers a 3.80% with a payout ratio of 51.4%. Paying out dividends since 1870, RY has a current PE of 13.89 also putting it below many of its peers and the S&P.
One interesting thing to note about this list is that all of the Canadian century club dividend stocks are in the financial sector and specifically banks. They also all offer, very attractive to relatively high yields, and low PEs and moderate payout ratios. In fact, the average yield of this group of stocks is a generous 3.78% while all have an average current PE of 13.37.
Of course past performance is never an indicator of future results, but when dealing with the large relatively conservative Canadian banking stocks, it's probably a low risk bet that these companies will continue to pay out a dividend for the next one hundred years.
Are any of these large Canadian banks in your portfolio? I'd love to hear from some of the Canadian bloggers out there.