Something to Buy June 2015

There is always something to buy in the stock market. On Monday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.

The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.

For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.

However, no system is perfect. But if you are interested in buy a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.

Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet at here to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr).. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.

I follow 19 stocks in the consumer discretionary category. Of these stocks, only Dorel Industries (TSX-DII.B) is showing as cheap by the historically high dividend yield. Four stocks (or 21%) are showing cheap by the historical average dividend yield, 5 (or 26%) are showing cheap by historical median dividend yield and 3 (or 16%) are showing cheap by 5 year median dividend yield.

I follow 10 Consumer Staples stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 20%) are showing cheap by the historical average dividend yield, 2 (or 20%) are showing cheap by historical median dividend yield and 1 (or 10%) is showing cheap by 5 year median dividend yield.

I only follow two Health Care stocks and both are US stocks. They are both only cheap by the historical average dividend yield and the historical median dividend yield.

I follow 11 Real Estate stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 18%) are showing cheap by the historical average dividend yield, 3 (or 27%) are showing cheap by historical median dividend yield and 4 (or 36%) are showing cheap by 5 year median dividend yield.

I follow 4 Bank stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 33%) are showing cheap by the historical average dividend yield, 3 (or 50%) are showing cheap by historical median dividend yield and 4 (or 67%) are showing cheap by 5 year median dividend yield.

I follow 12 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by the historical average dividend yield, 7 (or 58%) are showing cheap by historical median dividend yield and 5 (or 42%) are showing cheap by 5 year median dividend yield.

I follow 12 Insurance stocks. None are showing as cheap by the historically high dividend yield. One stock (or 20%) is showing cheap by the historical average dividend yield, 4 (or 80%) are showing cheap by historical median dividend yield and none are showing cheap by 5 year median dividend yield.

I follow 34 Industrial stocks. None are showing as cheap by the historically high dividend yield. Nine stocks (or 26%) are showing cheap by the historical average dividend yield, 12 (or 35%) are showing cheap by historical median dividend yield and 14 (or 41%) are showing cheap by 5 year median dividend yield.

I follow 7 Tech stocks. None are showing as cheap by the historically high dividend yield. Two stocks (or 29%) are showing cheap by the historical average dividend yield, cheap by historical median dividend yield and cheap by 5 year median dividend yield.

I follow 10 Energy stocks. Four Stocks or (40) are showing as cheap by the historical high dividend yield, 5 stocks (or 50%) are showing cheap by the historical average dividend yield, 7 (or 70%) are showing cheap by historical median dividend yield and 7 (or 70%) are showing cheap by 5 year median dividend yield.

I follow 2 Material stocks. None are showing as cheap by the historically high dividend yield. Both stocks are showing cheap by the historical average dividend yield, 1 is showing cheap by historical median dividend yield and 1 is showing cheap by 5 year median dividend yield.

I follow 8 of the infrastructure type utility companies. Only 2 stocks (or 38%) are showing cheap by 5 year median dividend yield and that is it.

I follow 12 of the power type utility companies. Two stocks (or 17%) are showing cheap by the historical average dividend yield, 2 (or 17%) are showing cheap by historical median dividend yield and 4 (or 33%) are showing cheap by 5 year median dividend yield.

I follow 5 of the Telecom Service type utility companies. Three stocks (or 50%) are showing cheap by the historical average dividend yield, 4 (or 67%) are showing cheap by historical median dividend yield and 2 (or 33%) are showing cheap by 5 year median dividend yield.

On my other blog I am today writing about Ag Growth International (TSX-AFN, OTC-AGGZF) ... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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