Skip to main content

What are we looking for?

Leaders in artificial intelligence (AI) with strong growth ahead, but also sustainable dividends.

The screen

Apple suffered an embarrassment last week when its AI-powered facial recognition feature failed to work during the iPhone X unveiling. That technical glitch aside, Apple and many tech leaders will undoubtedly boost sales with AI-powerful computers using big data to mimic human intelligence.

Starting with our list of Canadian and U.S. stocks, we singled out those firms that have successfully developed and commercialized AI. Focusing on the dividend payers among them, we then applied our TSI Dividend Sustainability Rating System. It awards points to a company based on seven key factors:

  • One point for five years of continuous dividend payments – two points for more than five years;
  • Two points if those payments have been raised in the past five years;
  • One point for management’s public commitment to dividends;
  • One point for operating in non-cyclical industries;
  • One point for limited exposure to currency exchange rates and freedom from political interference;
  • Two points for a strong balance sheet, including manageable debt and adequate cash;
  • Two points for a long-term record of positive earnings and cash flow to cover dividend payments;
  • One point if the company is a leader in its industry.

Publicly traded companies with 10 to 12 points have the highest sustainability rating, while those with seven to nine points are above average; four to six points, average; and one to three points, below average.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – Pat McKeough's widely followed group of Canadian investment newsletters. They include our award-winning flagship newsletter, The Successful Investor, which covers TSX index stocks. The TSI Dividend Advisor is the newest addition. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Our TSI Dividend Sustainability Rating System generated six cutting-edge AI stocks that already offer growing dividends. Microsoft, for example, is putting to use the biggest library of AI patents in the world. Cisco's voice-recognition AI works across all apps and devices; the tech company has also developed AI-protected network security. Intel's AI chips already power Google's self-driving cars; and IBM is leveraging the AI of its Watson supercomputer to develop more autonomous computers and other AI-supported products. Auto-parts leader Magna recently released its AI-powered self-driving platform. Symantec is a global pioneer in AI to ferret out potential cyberattacks from a maze of Internet traffic.

(Notable by its absence, dividend-paying Apple did not make the cut because of its high reliance on the iPhone for future growth and the lacklustre performance of highly touted new products such as the Apple Watch.)

All six of our top AI stocks appear in the accompanying table.

We advise investors to do additional research on any investments we identify here.

Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.

Select artificial-intelligence stocks

Ranking*CompanyTickerDividend Sustainability RatingMarket Cap ($ Bil)**Yield (%) Points
1Microsoft Corp. MSFT-QHighest577.22.210
2Cisco Systems Inc. CSCO-QAbove Average161.43.69
3IBM Corp.IBM-NAbove Average136.04.18
4Intel Corp. INTC-QAbove Average174.22.98
5Magna International Inc. MG-TAbove Average23.82.27
6Symantec Corp.SYMC-QAverage20.70.95

Source: Dividend Advisor.

*Ranking is determined by TSI Dividend Sustainability Score. Where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements. **Market cap is in native currency

Report an error Editorial code of conduct
Comments

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:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • 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. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

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.