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Equity analysts at National Bank Financial have unveiled their “2022 Dividend All-Stars” list, consisting of 22 TSX-listed stocks that they call their “favourite yield ideas ... spanning a variety of industries, sizes and liquidity.”

“The main purpose of the NBF Dividend All-Stars portfolio is to provide income-seeking investors with sustainable yield from high-quality companies that NBF analysts, generally, hold a positive view towards,” the firm said in a research report released late Tuesday.

The picks share three investment criteria: 1. Dividend/distribution yield of approximately 4 per cent or greater; 2. Low risk of the current payout proving unsustainable/dividends ideally growing; and 3. Generally positive bias regarding the prospects of the company and/or share price.

National Bank said its 2021 list returned income of 5.3 per cent and realized an average price return of 25.7 per cent over the last 12 months. A total return of 31.0 per cent topped the S&P/TSX Composite’s gain of 19.5 per cent (2.7-per-cent income and 16.7-per-cent price).

“Our portfolio return assumes investors keep dividends/distributions as income and re-invest capital gains at the mid-year update; however, assuming that income is also reinvested would have resulted in a portfolio return of 31.7 per cent,” the analyst said.

“Since inception of the Dividend All-Stars publication, the portfolio’s total return has outperformed the market in eight of the last ten years, which we expect will continue due to 1) investor interest for high yield names; 2) conservative payout ratios implying sustainable yields; 3) high average payout measure (AFFO, FCF, EPS, etc.) yield that indicates room for dividend increases; and 4) positive analyst outlook for names in the portfolio.”

Nineteen stocks are returning from last year’s list, which was comprised of 21 equities. Algonquin Power & Utilities Corp., DRI Healthcare Trust and European Residential REIT are new additions, while Crombie REIT and TC Energy Corp. were removed.

”Eleven All-Stars increased dividends / distributions in the 2021 portfolio; Alaris Equity Partners, Allied Properties REIT, Capital Power, CIBC, CT REIT, Dexterra, Lundin Mining, Mullen Group, TC Energy, Topaz Energy, and Summit Industrial Income REIT,” the firm noted.

For 2022, the firm said its average yield for the portfolio is “elevated” at 5.1 per cent.

Its picks are:

TickerYieldAnalyst ratingTarget price
Alaris Equity Partners Income TrustAD-UN-T7.2%"outperform"$27
Algonquin Power & Utilities Corp.AQN-T4.9%"outperform"US$15.50
Allied Properties REITAP-UN-T4.2%"outperform"$51
AltaGas Ltd.ALA-T3.8%"outperform"$31
BCE Inc.BCE-T5.5%"outperform"$71
Capital Power Corp.CPX-T5.7%"outperform"$47
Choice Properties REITCHP-UN-T5.2%"sector perform"$15.50
Canadian Imperial Bank of CommerceCM-T3.9%"outperform"$165
CT REIT CRT-UN-T4.9%"outperform"$19.50
Dexterra Group Inc.DXT-T4.3%"outperform"$14.50
Dream Industrial REITDIR-UN-T4.4%"outperform"$19
DRI Healthcare TrustDHT-U-T6.3%"outperform"$10
Enbridge Inc.ENB-T6.2%"outperform"$57
European Residential REITERE-UN-T3.7%"outperform"$5
Exchange Income Corp.EIF-T5.2%"outperform"$51
IGM Financial Inc.IGM-T4.9%"outperform"$62
Keyera Corp.KEY-T6.2%"outperform"$35
KP Tissue Inc.KPT-T6.9%"sector perform"$10.50
Lundin Mining Corp.LUN-T5.9%"sector perform"$12.25
Mullen Group Ltd.MTL-T4.8%"outperform"$16.50
Topaz Energy Corp.TPZ-T5.1%"outperform"$25
Transcontinental Inc.TCL-A-T4.3%"outperform"$28

Source: National Bank Financial

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