58 Of 122 Monthly Paid Canadian 'Safer' Dividend Equities For October 2019

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Includes: ARESF, BPZZF, BTBIF, CJREF, CMLEF, CRIUF, DREUF, EFRTF, HRUFF, MFCSF, PPRQF, PZRIF, TAHO, TRSWF
by: Fredrik Arnold

Summary

58 of 122 Monthly Paying (MoPay) Canadian (CAD) equities were "safer" by showing positive annual returns, and free cash flow yield greater than dividend yield.

Top net gains ranged from 13.3% to 54.43%, averaging 23.3% per broker estimates.

Top 10 CAD MoPay "Safer" dividend annual yields ranged from 8% to 12.9%. Their free cash flow yields ranged from 8.75% to 17.33%.

"Safer" CAD MoPay stocks also reported payout ratios, total annual returns, dividend growth, and P/E ratios to further document their dividend backing.

Analyst one-year targets revealed $5k invested in the lowest priced five of 10 top "safer" dividend CAD MoPay stocks produced 14.36% more gains than $5K invested in all 10.

Actionable Conclusions (1-10): Analysts Predicted Ten Top 'Safer' Dividend Canadian MoPay Stocks To Net 13.3% to 54.43% Gains To October 2019

Note that three of the ten top net gain 'Safer' dividend MoPay stocks (shaded in the chart above) were also found among the Top ten yielders for the coming year. Thus, the yield strategy for this "Safer" Canadian Dividend MoPay group, as graded by analyst estimates, proved 30% accurate.

Projections based on estimated dividends from $1000 invested in each of the thirty highest yielding stocks and their aggregate one year analyst median target prices, was collected by YCharts for 2018-19. Note: one year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to October, 2019 were:

Crius Energy [KWH.UN.TO] (OTC:CRIUF) netted $544.26 based on target estimates from five analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 1% opposite the market as a whole.

TransAlta Renewables Inc [RNW.TO] (OTC:TRSWF) netted $253.37 based on target estimates from ten analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to volatility 9% less than the market as a whole.

Cominar REIT [CUF.UN.TO] (OTCPK:CMLEF) netted $247.75, based on dividends plus a median target estimate from eight analysts less broker fees. The Beta number showed this estimate subject to volatility 26% less than the market as a whole.

Nexus Real Estate Investment Trust [NXR.UN.V] (OTC:EFRTF) netted $253.61 based on target price estimates from four analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 59% less than the market as a whole.

H&R REIT [HR.UN.TO] (OTCPK:HRUFF) netted $244.17 based on dividends plus the median of annual price estimates from thirteen analysts less broker fees. The Beta number showed this estimate subject to volatility 85% less than the market as a whole.

Artis Real Estate Investment Trust [AX.UN.TO] (OTCPK:ARESF) netted $213.73 based on dividends plus the median of annual price estimates from ten analysts, less broker fees. The Beta number showed this estimate subject to volatility 27% less than the market as a whole.

Medical Facilities Corp [DR.TO] (OTCPK:MFCSF) netted $168.07 based on a mean target price estimate from five analysts combined with projected annual dividends less broker fees. The Beta number showed this estimate subject to volatility 45% less than the market as a whole.

Automotive Properties REIT [APR.UN.TO] netted $148.60 based on dividends plus a median target estimate from six analysts less broker fees. The Beta number showed this estimate subject to volatility 36% less than the market as a whole.

Dream Industrial REIT [DIR.UN.TO] (OTC:DREUF) netted $144.18, based on a median target estimate from eight analysts dividends less broker fees. The Beta number showed this estimate subject to volatility 33% less than the market as a whole.

Choice Properties REIT [CHP.UN.TO] (OTC:PPRQF) netted $133.02 based on the median of target estimates from nine analysts, plus dividends less broker fees. The Beta number showed this estimate subject to volatility 46% less than the market as a whole.

Average net gain in dividend and price was 23.3% on $10k invested as $1k in each of these ten Canadian MoPay 'Safer' stocks. This gain estimate was subject to average volatility 33% less than the market as a whole.

The Dividend Dogs Rule

The "dog" moniker was earned by stocks exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest dividend yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best termed, "underdogs."

58 of 122 Canadian Monthly Pay Dividend Stocks Showed Positive Returns And Free Cash Flow Yields Greater Than Their Dividend Yields

Periodic Safety Inspection

A previous article discussed the raw list of 122 all-cap MoPay Canadian stocks on this list from which the 'safer' dividend 58 were sorted. Below are those 58 that passed the dividend "stress" test. These all-cap Canadian monthly pay dividend stocks report positive returns and sufficient annual cash flow yield to cover their anticipated annual dividend yield. The margin of excess is shown in the bold face column labeled "SafeMargin".

Financial plans, however, are frequently re-targeted by corporate boards of directors managing company policies cancelling or varying the payout of dividends to shareholders. For example, Tahoe Resources [THO.TO] (TAHO) failed to pay its past thirteen months of dividends and therefore, is assumed to have reverted to a no pay mode, dropping it off this list. In another case, Corus Entertainment [CJR.UN.TO] (OTCPK:CJREF) showed adequate cash flow and positive returns, while its share price plummeted over the past year, announced in June a reduced dividend reverting to quarterly pay mode starting in December and hence is off the list. This article asserts that adequate cash flow is a strong justification for a company to sustain annual dividend increases.

Seven Business Sectors Were Represented By "Safer" Canadian Equities Paying Monthly Dividends Into October

Seven of eleven Morningstar sectors were represented by the fifty-eight equities alleging 'safer' September dividends. The representation broke out, thus: Utilities (4); real estate (29); consumer cyclical (6); financial services (13); healthcare (1); energy (4); Industrials (1); Basic Materials (0); Communication Services (0); Consumer Defensive (0); Technology (0). The first four sectors named on the list above were represented by the top ten "safer" dogs by yield.

Yield Metrics Uncovered Real Bargain October MoPay "Safer" Dividend Stocks

Top ten "Safer" All-Cap Canada MoPay dividend stocks per September 27 YCharts data ranked by yield as follows:

Actionable Conclusions: Analysts Calculated 5 Lowest Priced of Ten Monthly Pay Canadian Dividend Equities(11) Delivering 17.65% VS. (12) 15.43% Net Gains from All TenBy October 2019

$5000 invested as $1k in each of the five lowest priced stocks in the "safer" ten Canadian MoPay kennel by yield were determined by analyst 1 year targets to deliver 14.36% more net gain than $5,000 invested as $.5k in all ten. The second lowest priced of the ten, Crius Energy Trust [KWH.UN.TO] (OTC:CRIUF), was projected to deliver the best net gain of 54.43%.

Lowest priced five "safer" dividend MoPay dogs as of September 27 were: BTB REIT [BTB.UN.TO] (OTC:BTBIF); Crius Energy [KWH.UN.TO] (OTC:CRIUF); True North Commercial [TNT.UN.TO]; Melcor REIT [MR.UN.TO]; Pizza Pizza Royalty Corp [PZA.TO] (OTC:PZRIF), with prices ranging from $4.82 to $9.75.

Higher priced five "safer" Canadian all-cap MoPay stocks were: TransAlta Renewables Inc [RNW.TO] (OTC:TRSWF); Artis REIT [AX.UN.TO] (OTCPK:ARESF); Slate Retail REIT [SRT.UN.TO] (SRRTF); Brompton Split Banc Corp [SBC.TO]; Boston Pizza Royalties Income Fund [BPF.UN.TO] (OTC:BPZZF), whose prices ranged from $11.34 to $17.26.

That distinction between five low priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The added scale of projected gains based on analyst targets contributed a unique element of "market sentiment" gauging upside potential. It provided a here and now equivalent of waiting a year to find out what might happen in the market. Its also the work analysts got paid big bucks to do.

Caution is advised, however, as analysts are historically 20% to 80% accurate on the direction of change and about 0% to 20% accurate on the degree of the change.

The net gain estimates mentioned above did not factor-in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

See my instablog for specific instructions about how to best apply the dividend dog data featured in this article, this glossary instablog to interpret my abbreviated headings, and this instablog to aid your safe investing. -- Fredrik Arnold

Stocks listed above were suggested only as possible starting points for your safest MoPay dog dividend stock purchase research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from YCharts, Yahoo Finance; analyst mean target price by Thomson/First Call from Yahoo Finance. Dog photo from hubpages.com.

Disclosure: I am/we are long MFCSF.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.