What are we looking for?
Canadian stocks that pay investors the most.
Much attention is being paid these days to dividend stocks. But dividends are only one of two ways that a company can put money in the hands of shareholders. The other is through stock buybacks. By combining both dividends and stock buybacks we can get a better sense of which companies are paying out the biggest rewards.
More on today's screen
Today’s offering comes to us from Bloomberg. Its screen searches for companies with a total payout of more than $1-billion over the most recent fiscal year.
Total payout is defined as the dollar value of stock buybacks in the most recent fiscal year plus dividends in that same year, minus stock issuance in the period.
What we found
Four banks make up a big chunk of our list. Other financial services firms, such as Great-West Lifeco and Power Financial, also make the cut. But so does Canadian National Railway as well as two telecommunications firms (Rogers Communications and BCE).
Measured by the dollar value of the total payout, the payout king of Canada turns out, fittingly enough, to be Royal Bank. Measured by the size of the payout in relation to the stock’s market capitalization, the top firm is George Weston Ltd.
You should note that this list can change radically from year to year. While companies are reluctant to cut their dividends, they can change buyback policy as circumstances warrant. A firm that buys back hundreds of millions of dollars in shares one year could decide to buy none the next.
Also worth noting is that too generous a payout policy can put a crimp in a company’s ability to expand. There’s a good reason that the firms on our list tend to be mature firms rather than rapidly growing enterprises that need to use their cash to grow.
Still, it’s worth keeping an eye on total payout. It provides a better picture of the cash that is flowing into shareholders’ hands than dividends alone. And firms that put a priority on enriching shareholders are usually preferable to those than don’t.
The payout kings among Canadian companies
|Company||Ticker||Total payout ($ mil.)||Market cap ($ mil.)|
|Royal Bank Of Canada||RY-T||2,942.8||75,114.3|
|Cdn. Nat'l Railway||CNR-T||1,950.2||37,402.2|
|Bank Of Nova Scotia||BNS-T||1,703.1||59,743.1|
|Bank Of Montreal||BMO-T||1,553.0||35,293.5|
|George Weston Ltd.||WN-T||1,402.9||7,380.7|
|Company||Ticker||Total payout ($ mil.)||Market cap ($ mil.)||Total payout yield (%)||Latest FY stock buyback ($ mil)||Latest FY dividend payout ($ mil.)||Latest FY stock issuance ($ mil.)|
|Royal Bank Of Canada||RY-T||2,942.8||75,114.3||3.9||n/a||3,090.8||148.0|
|Cdn. Nat'l Railway||CNR-T||1,950.2||37,402.2||5.2||1,436.3||591.7||77.9|
|Bank Of Nova Scotia||BNS-T||1,703.1||59,743.1||2.9||n/a||2,449.1||746.1|
|Bank Of Montreal||BMO-T||1,553.0||35,293.5||4.4||n/a||1,683.8||130.8|
|George Weston Ltd.||WN-T||1,402.9||7,380.7||19.0||101.1||1,324.1||22.3|