Number Cruncher

On the hunt for bargain dividend stocks

The Globe and Mail

What are we looking for

Let’s try to go bargain hunting for yields in the S&P/TSX Canadian dividend aristocrats index.

More about today’s screen

We’ll sort the current 39 members of the index by price decline this month, in hopes of finding strong yields amongst the stocks that have been hit the hardest by this month’s volatility.

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As for background, S&P defines a Canadian dividend aristocrat as a company or trust that has increased cash dividends or distributions annually for at least five consecutive years. The security must be listed on the Toronto Stock Exchange and have a minimum market capitalization of $300-million.

Members are generally added and deleted once a year in December. The index is adjusted on a monthly basis so that no stock may be weighted greater than 8 per cent of the index and no trust more than 5 per cent. The Claymore S&P/TSX Canadian Dividend exchange traded fund is designed to track this index.

What did we find?

The index is down a little more than 6 per cent this month and 3 per cent this year, not including dividends. The return for the index over one year ended Dec. 31 was 17.8 per cent, while it was 7 per cent annualized over three years and 8.5 per cent annualized over five years.

The worst-hit stocks this month have been oil and other commodity stocks on fears that demand will be reduced by a slower economy. Stocks like AGF Management and Thomson Reuters have also been hit hard because their fortunes are dependent on the markets. AGF now carries the highest yield in the index.