Skip to main content

The rally of the past year or so in the Canadian stock market has greatly complicated the job of finding reasonably priced blue chip dividend stocks.

But let's give it a go, anyway. What we're looking for are stocks in the S&P/TSX 60 index that:

- Have both one-year and annualized average five-year dividend growth of at least 5 per cent

Story continues below advertisement

- Have a dividend yield of at least 3.5 per cent, which was double the yield on the 10-year Government of Canada bond as of Jan. 20.

- Have a one-year total return of less than 20 per cent – A surprising number of big blue chips have done far better than that in the past year. Can we find some that aren't as pricey?

Just two stocks made it through this screen:

- BCE Inc.:The dividend yield was 4.6 per cent as of Jan. 20, tops in the 60 index, while Globeinvestor.com data shows one- and five-year dividend growth between 5 and 6 per cent. The one-year total return was 15.1 per cent.

- Fortis Inc.: Dividend yield of 3.9 per cent, one- and five-year dividend growth in the 6 per cent range and a one-year total return of 17 per cent.

If you're willing to look at stocks that come close to meeting these criteria, consider:

- Telus Corp.: The yield was 4.4 per cent, one- and five-year dividend growth was in the 9 to 10 per cent range and the one-year total return was 25.6 per cent.

Story continues below advertisement

- Power Corp. of Canada: A 4.4 per cent yield and one-year dividend growth of 7.6 per cent. Five-year growth was a bit below par at 2.9 per cent. The one-year total return was 16.5 per cent.

The lowest one-year total return among blue chip dividend stocks was the 5.8 per cent gain of Metro Inc. You get strong dividend growth with Metro, but a yield of just 1.4 per cent.

So much for finding higher-yielding bargains in the blue chip dividend niche. Patient investors may want to watch and wait for opportunities ahead.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies