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If you assembled a top-notch list of Canadian dividend stocks and left out the Big Five banks, you might assume that you would be doomed to lacklustre performance.

But Brian Belski, chief investment strategist at BMO Nesbitt Burns, has assembled a list of dividend stocks that contains not one of the Big Five – yet it is crushing the S&P/TSX composite index.

Over the past 12 months, his dividend stocks have more than doubled the gains of the benchmark index. And going back to 1999, the compound annual growth rate for his dividend stocks is 12.8 per cent, versus just 3.1 per cent for the index.

The key, he says, is to look beyond yield. Instead, Mr. Belski focuses on a company's ability to grow its dividend, even if the starting point is modest – and most banks simply don't make the cut right now.

This is surprising. Banks are a favourite among dividend investors because of their big, stable payouts. They serve as a foundation for most dividend-focused Canadian equity funds. Leaving them off a list of dividend stocks sounds like a recipe for disaster.

To be sure, Mr. Belski didn't omit banks. Rather, they didn't meet his screening criteria: Stocks had to have a dividend greater than zero; they had to have a free cash flow yield that was greater than the dividend yield; and they had to have a dividend payout ratio that was less than the S&P/TSX composite index.

National Bank of Canada, the country's sixth largest, is the only bank that made the 40-stock list (one that is remarkably light on financials in general), and has been on it for 66 months.

So instead of Royal Bank of Canada, you get Alamos Gold Inc. Instead of Bank of Nova Scotia, you get Dorel Industries Inc. And instead of Toronto-Dominion Bank, you get Pacific Rubiales Energy Corp.

Surprised? Then check out the other names that made the cut:

Astral Media Inc., Agrium Inc., Alimentation Couche-Tard Inc., Cott Corp., Canadian Apartment Properties REIT, Cogeco Cable Inc., CCL Industries Inc., Canadian National Railway Co., Canadian Tire Corp. Ltd., Calloway REIT, Dollarama Inc., Enerflex Ltd., Empire Co. Ltd., Ensign Energy Services Inc., Gildan Activewear, Inc., Home Capital Group, Inc., Industrial Alliance Insurance & Financial Services Inc., Intact Financial Corp., Loblaw Cos. Ltd., Major Drilling Group International, Inc., Magna International, Inc., Genworth MI Canada Inc., Metro Inc., Nevsun Resources Ltd., Jean Coutu Group (PJC) Inc., Petrominerales Ltd., Potash Corp. of Saskatchewan Inc., RioCan REIT, Shoppers Drug Mart Corp., ShawCor Ltd., Stantec Inc., Suncor Energy Inc., TransForce Inc., Tim Hortons Inc., West Fraser Timber Co. Ltd. and WestJet Airlines Ltd.

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