What are we looking for?
North American large-cap companies with high yields and strong dividend-growth metrics, backed by strong underlying business models.
Companies with strong underlying operations that distribute excess cash reserves to shareholders on a regular basis have become the pick of many investors for the reliability and steady income they can add to a portfolio.
Today's screen takes a look at North American companies with a market capitalization of more than $1-billion that meet the criteria of strong dividend metrics and a sustainable underlying business model.
Companies included in the screen have a dividend yield of at least 5 per cent over the previous fiscal year, and a dividend coverage ratio greater than one, indicating the number of times the income available to shareholders covers the dividend payments.
Companies included also must have projected dividend-per-share growth of at least 3 per cent as measured by the Thomson Reuters SmartEstimate model, and a score of at least 50 in our Combined Alpha Model, which measures the overall financial health of the company.
More about Thomson Reuters
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What did we find?
The screen yielded 12 companies across multiple industries in both Canada and the United States.
PBF Logistics scores well across all four criteria, and is projected to have the highest growth in its dividend over the next 12 months owing largely to bullish analyst estimates based on accretive acquisitions that recently took place.
TransAlta Renewableshas seen the largest price appreciation over the past 52 weeks at nearly 47 per cent, which when topped with a 5.6-per-cent dividend yield, makes for very impressive returns. The Canadian company has seen steady growth since late 2015 because of an asset portfolio that is diversified across fuel types and has shown an increase in overall production capacity.
This commentary does not provide individualized advice or recommendations for any specific subscriber or portfolio. Investors should conduct further research before investing.
Ryan Gottschalk works in the financial and risk unit of Thomson Reuters and specializes in asset management.
Select North American dividend stocks
|Company||Symbol||GICS Sector||Mkt Cap ($ Mil) *||Div. Yield||Div. Coverage Ratio||DPS/Smart Estimate Growth||52W Price % Chg||Comb. Alpha Model|
|PBF Logistics LP||PBFX-N||Energy||1,083.5||7.8%||1.37||13.6%||-6.3%||99|
|Staples Inc||SPLS-Q||Cons. Discr.||6,453.4||6.5%||1.23||3.6%||-43.0%||81|
|First National Financial Corp||FN-T||Financials||1,466.2||6.3%||1.05||4.5%||10.0%||52|
|Western Refining Logistics||WNRL-N||Energy||1,807.2||6.3%||1.93||12.6%||-12.1%||87|
|IGM Financial Inc||IGM-T||Financials||8,657.9||6.3%||1.39||3.7%||-4.8%||71|
|GameStop Corp||GME-N||Cons. Discr.||3,353.0||6.0%||2.62||6.3%||-47.8%||83|
|Spectra Energy Partners LP||SEP-N||Energy||17,652.0||5.7%||1.02||7.7%||-1.2%||74|
|TransAlta Renewables Inc||RNW-T||Utilities||3,319.4||5.6%||1.37||3.7%||46.6%||86|
|Genworth MI Canada Inc||MIC-T||Financials||2,675.7||5.5%||2.72||5.3%||-9.9%||98|
|Granite REIT||GRT.UN-T||Real Estate||1,986.5||5.5%||1.78||4.3%||10.7%||91|
|CI Financial Corp||CIX-T||Financials||6,621.3||5.2%||1.52||6.0%||-20.9%||60|
Source: Thomson Reuters Eikon
* All figures in Canadian dollars