Last Monday, I pulled out the Best U.S. Stocks for 2012 with 182 companies listed in this post. As mentioned previously, I wanted to do the same thing on the Canadian stock market to be fair and to show you which companies are interesting to own in Canada even if you are a U.S. citizen. You know this by now; I’m a big fan of some Canadian stocks as I think that the banking industry in Canada along with the resources sector can bring a lot to one’s portfolio.
While I was surprised to pull out 182 stocks on the U.S. stock market, I was even more surprised to pull out… 32 stocks on the Canadian market with the same metrics!
Canadian vs US
As a Canadian myself, it is obviously easier to buy Canadian stocks as I avoid currency risk and tax complications (depending on the type of account you are trading in). However, in the light of this chart showing a pitiful 32 stocks (of which seven are banks, six others related to financial services and four telecoms), as Canadians you have no other choice but to consider U.S. stocks as well. Just for the sake of diversification, you need to look elsewhere if you want to build a strong dividend portfolio. This was also the reason why I’ve put only nine Canadian stocks in my Best Dividend Stocks for 2012 eBook.
Best Dividend Stocks for 2012
The chart is based on the same filters:
Dividend Yield over 3%
Dividend Payout Ratio under 75%
5 Years Dividend Growth positive
[Note that stock tickers are U.S.-traded symbols where applicable- Ed.]
| Ticker | Name | INDUSTRY_SUBGROUP | Price | Dividend Yield | Payout Ratio | Dividend Growth 5 Years |
|---|---|---|---|---|---|---|
| IGM | IGM Financial Inc | Invest Mgmnt/Advis Serv | 44.79 | 4.8 | 73.99 | 6.96 |
| SJR/B | Shaw Communications Inc | Cable/Satellite TV | 19.79 | 4.65 | 72.56 | 26.15 |
| CLK | ClubLink Enterprises Ltd | Diversified Operations | 6.41 | 4.55 | 70.88 | 4.56 |
| GWO | Great-West Lifeco Inc | Life/Health Insurance | 19.53 | 6.3 | 70.37 | 5.81 |
| CFN-U | Carfinco Income Fund | Finance-Consumer Loans | 6.92 | 5.2 | 68.99 | 2.73 |
| MAMTF.PK | MCAN Mortgage Corp | Finance-Mtge Loan/Banker | 13.1 | 8.24 | 67.51 | 11.76 |
| BCE | BCE Inc | Telecom Services | 41.14 | 5.27 | 62.45 | 8.16 |
| TU | TELUS Corp | Telecom Services | 56.95 | 4.07 | 62.09 | 12.94 |
| X | TMX Group Inc | Finance-Other Services | 41.5 | 3.85 | 58.15 | 3.92 |
| CBYDF.PK | Corby Distilleries Ltd | Beverages-Wine/Spirits | 15.33 | 3.92 | 58.14 | 3.35 |
| CSQPF.PK | Cervus Equipment Corp | Retail-Gardening Prod | 15 | 4.8 | 57.81 | 6.72 |
| CLNFF.PK | Calian Technologies Ltd | Consulting Services | 17.19 | 6.06 | 56.69 | 23.61 |
| MEOH | Methanex Corp | Chemicals-Specialty | 22.8 | 3.1 | 56.23 | 3.76 |
| BMO | Bank of Montreal | Commer Banks Non-US | 54.94 | 5.1 | 54.13 | 4.38 |
| CEU | Canadian Energy Services & Technology Corp | Oil-Field Services | 11.41 | 4.73 | 53.47 | 14.37 |
| BIRDF.PK | Bird Construction Inc | Building&Construct-Misc | 11.49 | 5.76 | 53.45 | 17.6 |
| EHMEF.PK | easyhome Ltd | Rental Auto/Equipment | 6.78 | 5.01 | 51.91 | 7.21 |
| RCI/B | Rogers Communications Inc | Cellular Telecom | 38.81 | 3.65 | 48.3 | 70 |
| CM | Canadian Imperial Bank of Commerce/Canada | Commer Banks Non-US | 73.6 | 4.89 | 47.74 | 4.93 |
| RY | Royal Bank of Canada | Commer Banks Non-US | 48.95 | 4.41 | 46.61 | 7.63 |
| CJREF.PK | Corus Entertainment Inc | Multimedia | 20.38 | 4.26 | 45.32 | 20.49 |
| NDN | Nordion Inc | Medical Products | 8.34 | 4.92 | 44.63 | 25.14 |
| BNS | Bank of Nova Scotia | Commer Banks Non-US | 49.48 | 4.21 | 44.36 | 6.45 |
| ADWPF.PK | Andrew Peller Ltd | Beverages-Wine/Spirits | 9.3 | 3.87 | 43.12 | 9 |
| TD | Toronto-Dominion Bank/The | Commer Banks Non-US | 73.45 | 3.7 | 40.57 | 13.93 |
| GHIFF.PK | Gamehost Inc | Casino Hotels | 11.14 | 7.9 | 39.5 | 3.06 |
| NTIOF.PK | National Bank of Canada | Commer Banks Non-US | 71.47 | 4.2 | 38.36 | 1.2 |
| LEFUF.PK | Leon's Furniture Ltd | Retail-Home Furnishings | 12.2 | 3.28 | 35.54 | 6.76 |
| LRCDF.PK | Laurentian Bank of Canada | Commer Banks Non-US | 47.39 | 3.8 | 33.69 | 6.91 |
| ACCFF.PK | Accord Financial Corp | Finance-Commercial | 6.87 | 4.37 | 31.91 | 8.45 |
| MODVF.PK | Melcor Developments Ltd | Real Estate Oper/Develop | 12.4 | 3.23 | 23.47 | 5.92 |
| MGA | Magna International Inc | Auto/Trk Prts&Equip-Orig | 32.89 | 3.15 | 10.48 | 2.95 |
Out of this list, I’ve published several dividend stock analyses over at Canadian Dividend Stock including the following: BCE, Telus, Great-West Lifeco, Corus, National Bank, TD Bank, Royal Bank, BMO, ScotiaBank, CIBC, Rogers, and Shaw Communications.
Another great option for Canadian investors that is not listed in this article is to consider Canadian REITs. But even then, this is not enough to cover all industries and have a well diversified portfolio. Unfortunately, when a sector is not doing so well or show some concerns from investors; all stocks related to this industry will go bad.
Therefore, you could think that building a “bank” portfolio along with a few other stocks and a few REITs may be good enough. In fact, such a portfolio would payout some healthy dividends and you could think it’s a good way to invest. However, being concentrated in a couple of sectors also means that you are dependent on their growth to perform over the long term. If you know which sectors are going to perform over the next 5 years, then, you are all set. But unfortunately, we don’t see such crystal ball on sale at Wal-Mart yet…
