Yield-Hungry Investors Have 12 ‘Delightful’ Canadian Stock Plays

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(Bloomberg) -- Investors on the global hunt for yield need to look no further than Canada, where there are 12 stocks that have “delightful dividends,” according to Credit Suisse Group AG.

As negative-yielding debt spreads to more corners of the debt universe, analysts led by Andrew Kuske screened over 400 Canadian stocks to find 12 that are trading at deeper-than-normal discounts.

“One of the most notable aspects of the current market environment is the continuing decline of interest rates,” he said in an Aug. 21 report. “Yet, we still find a number of dividend stocks trading at relatively attractive valuations under various criteria.”

Here are the stocks from his screened list with yield, payout ratio and year-to-date return, according to data compiled by Bloomberg:

Company

Dividend Yield

Payout Ratio

Total Return

Alaris Royalty8.4%97.421%
Russel Metals7.5%43.1-1.3%
Western Forest Products7.2%51.0-32%
Acadian Timber6.8%71.615.9%
NFI Group6.4%42.8-20.7%
Power Corp.5.9%54.415%
Laurentian Bank5.9%49.621.8%
CIBC5.7%45.50.4%
Exco Technologies4.9%33.4-14.5%
Canadian Natural Resources4.8%63.0-2.9%
Telus4.7%78.37.6%
Methanex4.4%18.6-33%

Kuske’s criteria for this list includes stocks with over 4% dividend yield that have a sustainable dividend or payout ratio of less than 100% with further potential to grow. However, not all of these stocks have a buy rating:

  • Outperform: Acadian Timber Corp. and Canadian Natural Resources Ltd.
  • Hold: Canadian Imperial Bank of Commerce
  • Underperform: Laurentian Bank of Canada

©2019 Bloomberg L.P.

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