Thursday, November 10, 2016

Something to Buy November 2016

There is always something to buy in the stock market. On Tuesday, 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.

This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.

However, no system is perfect. But if you are interested in buying 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 Something to Buy November 2016 Spreadsheet 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.

In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).

I follow 20 stocks in the Consumer Discretionary category. None of these stocks are showing as cheap by the historically high dividend yield. Seven (or 35%) are showing cheap by historical median dividend yield. They are Canadian Tire Corporation (TSX-CTC.A, OTC-CDNAF), DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Newfoundland Capital Corp (TSX-NCC.A), and Thomson Reuters Corp (TSX-TRI). DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF) are added to this list and Goeasy Ltd. (TSX-GSY, OTC-EHMEF) and Reitmans (Canada) Ltd. (TSX-RET.A) has been deleted.

I follow 12 Consumer Staples stocks. There is one company showing as cheap by the historically high dividend yield and that is Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF). Three stocks (or 25%) are showing cheap by historical median dividend yield. These are Empire Company Ltd. (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF) and Loblaw Companies (TSX-L, OTC-LBLCF). Empire Company Ltd. TSX-EMP.A, OTC-EMLAF) is again showing as cheap by the historically high dividend yield.

I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month. There is no change.

I follow 12 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Four stocks (or 33%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN); FirstService Corp (TSX-FSV), Granite Real Estate (TSX-GRT.UN) and Melcor Developments Inc. (TSX-MRD. There is no change.

I follow 7 Bank stocks. There is one company showing as cheap by the historically high dividend yield and that is Home Capital Group (TSX-HCG, OTC-HMCBF). Six stocks (or 86%) are showing cheap by the historical median dividend yield. These stocks are Bank of Nova Scotia (TSX-BNS); Barclays PLC (NYSE-BCS), Home Capital Group (TSX-HCG, OTC-HMCBF), National Bank of Canada (TSX-NA); Royal Bank (TSX-RY) and Toronto Dominion Bank (TSX-TD). There is no change.

I follow 14 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Nine (or 64%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), DH Corporation (TSX-DH, OTC-DHIFF), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW), DirectCash Payments Inc. (TSX-DCI) is no longer on this list. Accord Financial Corp (TSX-ACD, OTC-ACCFF), DH Corporation (TSX-DH, OTC-DHIFF) and Equitable Group Inc. (TSX-EQB, OTC-EQGPF) have been added to this list.

I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Four stocks (or 80%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC); Power Financial Corp (TSX-PWF) and Sun Life Financial (TSX-SLF). There is no change.

I follow 34 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services.

I have 6 Construction stocks. None are cheap by the historically high dividend yield. Three stocks or 50% are showing as cheap by historical median dividend yield. They are Bird Construction Inc. (TSX-BDT, OTC-BIRDF), SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change.

I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change.

I have 9 Manufacturing stocks. There is one company showing as cheap by the historically high dividend yield and that is Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF). Five stocks or 56% are showing as cheap by historical median dividend yield. They are Canam Group Inc. (TSX-CAM, OTC-CNMGA), Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF).

I have 16 Services stocks. Pason Systems Inc. (TSX-PSI, OTC-PSYTF) is showing as cheap by the historically high dividend yield. Three stocks or 19% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF) and Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF). There is no change.

I follow 7 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 16% are showing as cheap by historical median dividend yield. That stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). There is no change.

I follow 9 Energy stocks. One Stock or (11%) is showing as cheap by the historical high dividend yield. It is Ensign Energy Services (TSX-ESI, OTC-ESVIF) There are three stocks (or 33%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF); and Suncor Energy (TSX-SU, NYSE-SU). There is no change.

I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF), Calian Technologies Ltd (TSX-CTY, OTC-CLNFF), Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF) and MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF). MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF) has been added to this list. I have started a spreadsheet on Sylogist Ltd (TSXV-SYZ, OTC-SYZLF), but I have not finished it yet.

I follow 8 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 38%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB) and Veresen Inc. (TSX-VSN, OTC-FCGYF). Veresen Inc. (TSX-VSN, OTC-FCGYF) has been added to this list.

I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. One stock (or 8%) is showing cheap by historical median dividend yield. That stock is ATCO Ltd (TSX-ACO.X, OTC-ACLLF). There is no change.

I follow 5 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR); Telus Corp. (TSX-T, NYSE-TU) and WiLan Inc. (TSX-WIN, NASDAQ-WILN). There is no change.

On my other blog I wrote yesterday about Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more. Tomorrow, I will write about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more on Friday, November 11, 2016 around 5 pm.

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.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

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