Category Archives: Canadian Dividend Watch List

Performance Review

Below is the performance of our Canadian Watch List from November 2015:

Again, the performance was in line with our expectations that the analysts are generally wrong about 1-year expectations in earnings and price change.  The most surprising change was experienced by Ag Growth International (AGN.TO) with a gain of +77.90%. The worst performing stock was Empire Company (EMP-A.TO) which lost –33.85%.  The projected average change for the list of stocks was +31.26% while the actual change for the list was +4.92%.  During the last year, the Toronto Stock Exchange increased +10.65%.

The chart below breaks down the performance of the stocks from the Canadian Dividend Watch List from August 2015.  We’ve decided to take a different tack than in the past by showing the performance of the watch list based on the analyst estimates that projected stocks that would increase in value in the following year (darlings), decrease in value (bums), the 2015 watchlist and the Toronto Stock Exchange (TSE).

As we said of the bums last year, “stocks that are considered to decline in price should be examined first and eliminated based fundamental and technical factors.  Stocks slated to gain the most should be considered high risk.”  All stock are not created equal, however, stocks that have lower expectations by analysts should be considered first for their investment merit.  The darlings underperformed the Toronto Stock Exchange while the entire August 2015 watchlist exceeded the performance of the TSE by an average of +1.50%.

Performance Review

Below is the 1-year performance of the Canadian dividend stocks from our June 2014 watch list (found here):

The best performing stocks were Saputo (SAP.TO), Rogers Communication (RCI-B.TO) and  First Capital Realty (FCR.TO).  The worst performing stocks were TransAlta (TA.TO), Dream Office (D-UN.TO) and Home Capital Group (HGC.TO). 

Worth noting is that the stocks that were expected to have negative returns averaged a decline of –0.38% while the stocks expected to gain in price also declined but by as much as –6.32%.  The Toronto Stock Exchange declined –5.13% in the same one year period from June 19, 2015 to June 17, 2016.

Canadian Dividend Watch List

This is a list of Canadian dividend stocks that currently, or in the past, had a history of consecutive dividend increases. For those wishing to find the most complete fundamental information on these companies, we recommend visiting one of Canada’s leading financial websites, the Financial Post (found here). However, Yahoo!Finance probably has the better long-term charts and historical dividend data.

Performance Review

Below is the performance of the stocks found on our watch list from last year compared to what analysts projected the stocks would do.

analyst estimate in red, actual performance in blue

The first five stocks found on the watch list lost an average of –4.38% compared to the entire list which averaged a decline of –2.44%.  The performance of the list is contrasted with the –7.73% change with Toronto Stock Exchange.

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Performance Review

On April 15, 2015, we generated the following list of stocks for consideration with their respective performance one year later:

The performance of the entire list averaged –7.77% compared to the –12.93% decline in the Toronto Stock Exchange index.  The first five stocks on the list averaged a loss of –3.22%.

The spread between what the analysts had predicted for earnings (and the implied change in the stock price for the year ahead) provides a better summary of performance.  As we’ve indicated in the past, the stocks with the worst estimates typically should outperform the stocks with the best estimated price expectations.  The chart below shows a ranking based on the total percentage spread between projected price change and the actual price change.

The narrower the spread the more accurate the analyst estimate.  Three stocks were on target (CU.TO, BEI-UN.TO, REF-UN.TO) as they performed within a 5% range AND in the general direction that the analysts has anticipated (having declining expectations and declining price or rising expectations and a rising price).  All other stocks were well out of the range of analyst expectations by falling or rising when the opposite was forecasted. 

It should be noted that the order of the spread is almost the mirror opposite of the analyst expectations.  This goes back to our point of identifying the stocks that have the worst expectations and best fundamentals for investment consideration as the analysts are typically too negative or too positive when a more balanced view is necessary.

Performance Review

Below is the performance of the stocks found on our January 13, 2015 watch list:

Below is the performance of the watch list based on the analyst estimates given at the time.  As can be seen, there was a significant divergence between what was expected and what actually happen.  It appears that for a majority of the list, analysts were over-optimistic.

However, when viewed from the perspective of using the same p/e ratio as January 13, 2015 as seen in the following link, the analysts appeared to be a more realistic expectation for the stocks.