Below is the 1-year performance of the Canadian dividend stocks from our March 2013 watch list (found here).
| Name | 2013 | 2014 | % change |
| Just Energy | 7 | 8.68 | 24.00% |
| Cominar REIT | 22.45 | 18.21 | -18.89% |
| Riocan REIT | 27.16 | 26.48 | -2.50% |
| Fortis | 33.54 | 31.48 | -6.14% |
| National Bank of Canada | 38.14 | 43.6 | 14.32% |
| Artis REIT | 16.06 | 15.67 | -2.43% |
| TransAlta | 15.02 | 12.68 | -15.58% |
| Emera | 34.8 | 33.5 | -3.74% |
| Imperial Oil | 43.27 | 51.07 | 18.03% |
| Laurentian Bank of Canada | 44.58 | 45.73 | 2.58% |
| Average | 0.96% |
The performance of the stocks from last year was significantly below that of the Toronto Stock Exchange Composite index gain of +10.89%. The entire list of stocks gained +0.96% and the top five stocks gained only +2.16%. As previously noted, REITs were expected to underperform.
There were two stocks of interest to us last year, Just Energy and Cominar. Of Just Energy, we said:
“Just Energy (JE.TO) has given up -7.40% since our February watch list. This is almost half of the 16.40% dividend yield that was presented last month. As we’ve said in our May 4, 2011 article titled “Price Decline Equals Dividend Canceled,” a dividend can be taken away as quickly as it was issued simply based on the price of the stock declining. As the stock of JE.TO continues to decline, we eagerly await whether or not the stock find price support at the $6.00 level.”
No sooner said than done in the case of Just Energy. Not only are dividend gains erased by the declines in the stock price, Just Energy cut the dividend by more than 30% starting in April 2013. We have never been impressed with high dividend yields, the performance of Just Energy is a prime example. Aside from the dividend concerns, Just Energy fell in line with our analysis. Just Energy declined as low as $5.89 and subsequently increased as high as $9.09, a gain of +51% if purchased at the $6.00 level.
Regarding Cominar REIT we said:
“Cominar (CUF-UN.TO) is marginally changed since our January 2013 profile of the company. Our analysis based on the stock remains the same as we said then, ‘the consistency of Cominar’s dividend history, given the economic environment, is a reflection of a responsible management team at the helm. Cominar should be considered at or below $18.25. Acceptance of downside risk to the $10.59 price should be built in for long-term investors.’”
Cominar has fallen in line with our initial assessment, so for. At the time, the stock was trading at $22.45 and we projected downside risk of -18.70% to $18.25. On November 8, 2013, Cominar closed at $18.22 for the first time since November 2009. Since November 2013, Cominar has traded in a tight range giving investors the opportunity to reassess the prospects for the company going forward (a requirement regardless of meeting prior expectations).
Canadian Dividend Watch List: March 14, 2014
Below are the twelve Canadian stocks to be on the lookout for. Additionally, we have included the analyst estimates of expected returns for the remainder of 2014.
