# Best dividend stocks



## gibor365 (Apr 1, 2011)

Today i was going through new Jan edition of D. Fish Dividend Champions/Contenders spreadsheet. I tried to select stocks in those sheets considering:
Current yield (at least 4.5%), sustainability, increasing dividends at least 10 years and dividend growth perspective (MLP excluded - have no idea what is it)
I came up with those stocks: MO, T, UBSI, COP, LMT, NIDB, OHI, PPL, ABBV (currently holding MO, T and ABBV). 
Anyone holding or has any opinion on others?

Too bad we don't have such spreadsheet for TSX (at least free)... still was thinking about Canadian stocks that answer those criteria. I couldn't come up with the list, the closest who fit it: BCE, CM, BMO.... 
Anyone can extend the list?


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## avrex (Nov 14, 2010)

I just took a quick look at the Dividend Champions spreadsheet.

I'm not sure how a company gets classified as a:
- Champion
- Contender
- Challenger

I probably won't be back online until Sunday night. 
Your homework assignment is to find out what the *complete criteria* is to become one of these 3 C's. 
Bonus marks for identifying more Canadian companies that fall into these different C's.


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## gibor365 (Apr 1, 2011)

Champion - more than 25 years in a row increasing dividends
Contender - from 10 to 25 years in a row increasing dividends
Challenger - from 5 to 10 years in a row increasing dividends

You can find Canadian Interlisted stock on those speadsheets: 
Chanpions - none
Contenders: CNI, CNQ, ENB, IMO, SJR, TRI
cHALLENGERS: Constellation Software Inc., EEP, KINGROSS, RCI, SU, THI, WFI(WaterFurnace Renewable Energy Inc)., CAE,


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## 6811 (Jan 1, 2013)

From the "Notes" tab of the workbook: 

"The initial goal was to identify companies that had increased their dividend in at least 25 consecutive years" (Champions Tab), but "that definition was broadened to include additional companies that had paid higher dividends (without necessarily having increased the quarterly rate in every calendar year. Also included (under the Contenders tab) are companies that have increased their dividend for 10-24 straight years and (under the Challengers tab) companies that have increased their dividend for 5-9 straight years."

- Champions - no Canadian companies listed
- Contenders - CNI, CNQ, ENB, SJR, TRI
- Challengers - CAE, EEP, KGC, RCI, SU, THI

These C's are on the NYSE. Not up to the task of analysing the TSX for similar lists. :wink:


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## doctrine (Sep 30, 2011)

I've been assembling a list of TSX listed companies that have a history of annual dividend increases on my webpage. Suffice to say, there are none with a current yield over 4.5%. 

There are, however, a few with a yield above 3% and two above 4%. Thomson Reuters (TRI) has a 4.2% yield and 19 years of consecutive annual dividend increases. Laurentian Bank only has 6 years, but a 4.4% dividend yield.

I'm still looking for more. I have 15 companies so far, putting up 5 more up tonight on the site and after that there is maybe 10 more with > 5 years of dividend increases. There are also a handful of companies with 4 years of dividend increases that could make the list next year - like BCE, who will have 5 years as of 1 Jan 2014 provided they make the next 3 dividend payments.


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## gibor365 (Apr 1, 2011)

If you check David's spreadsheet on Appendix B - Near-Challenger, you will find there BCE and CVE	
doctrine, can you share your list?

I think FTS has long history of increases, but yield less than 4. The problem with David's list that he calculate increases in $US, thus TA was just last year removed from the list, even though they didn't increased dividends for a long time, but CAD$ was gaining vs $US

TRI is practically the only "real" dividend contender even by US standards...


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## Belguy (May 24, 2010)

Lists of the supposed 'best dividend paying stock recommendations' always confuse me because the lists are invariably quite different. 

If they are indeed the BEST choices, when all is said and done, then why don't they appear on all of the recommended lists? Why is each list so different?

If I asked the experts on this forum what the 15 best dividend paying stocks were, how many times would the same stocks would show up on most contributors' lists?

I am a simple man and so all that I would like to know are which are the 15 BEST Canadian dividend payers to include in a diversified portfolio?

If they're the BEST, then everybody's list should be pretty much the same or are there simply too many criteria on which to judge them making the choices altogether too subjective?

Is that why everybody's lists will likely be quite different?

In that event, whose list should we take to the bank?

Or, should we just take all of them with a grain of salt?


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## gibor365 (Apr 1, 2011)

Belguy said:


> Lists of the supposed 'best dividend paying stock recommendations' always confuse me because the lists are invariably quite different.


This is because everybody's parameters what is "the best" are different.....


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## Belguy (May 24, 2010)

gibor said:


> This is because everybody's parameters what is "the best" are different.....


And so, what good are the lists? Perhaps they are better than a dart board but they do not offer any real consensus!!


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## Sampson (Apr 3, 2009)

Belguy said:


> If they're the BEST, then everybody's list should be pretty much the same or are there simply too many criteria on which to judge them making the choices altogether too subjective?
> 
> Is that why everybody's lists will likely be quite different?
> 
> ...


I guess the same question should be asked when one PICKS an ETF.

Lots of gurus, lots of different reasons including differences in fees, # of holdings, index tracking precision, whether to include preferred share ETFs, emerging market ETFs, market cap vs. equal weighting etc.

Complicated isn't it? I guess index tracking portfolios can be just ask complex as a portfolio with individual stock positions.


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## Belguy (May 24, 2010)

Well, that's why, when all is said and done, I think that the best plan for most small investors is just to invest in a diversified portfolio of four or five of the lowest fee, broadest based ETF's such as those offered by Vanguard and then stop trying to absorb all of the clutter that is out there.

You could do worse and you could spend your time on other pursuits.

Life is too short to keep hitting your head against the wall. Being a 'Couch Potato' is likely the best approach when all is said and done unless you can find THE definitive list of what are truly the BEST dividend paying stocks and that would give you another investment alternative.


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## liquidfinance (Jan 28, 2011)

The lists provide a useful basis on which to start conducting your own research.

If they were all the same and we all thought the same then the market wouldn't be so much fun to play. 


Everyone can create a different lists as you add criteria.

If you just look at 25 year payout etc we will all conclude the same. 

Factor in earning growth, payout growth, payout ratios, avg dividend yield to present we can come up with a very different idea as to what suits our criteria.

In the current climate I think Canada has a lot of gems. Although the prices are high it depends if you want to run the risk of being left out. 

Really I think Argo has it right with his 5 pack idea.


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## gibor365 (Apr 1, 2011)

Belguy said:


> Life is too short to keep hitting your head against the wall. Being a 'Couch Potato' is likely the best approach when all is said and done unless you can find THE definitive list of what are truly the BEST dividend paying stocks and that would give you another investment alternative.


Yes, life is too short...and as alternative to indexing, you can build portfolio of stock that increased dividends for 40-50 years and just live from dividends


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## Belguy (May 24, 2010)

gibor said:


> Yes, life is too short...and as alternative to indexing, you can build portfolio of stock that increased dividends for 40-50 years and just live from dividends


That is likely very true but the problem, for somebody like me, is that I don't have the knowledge or inclination to do my own research and don't trust all of the best dividend payer lists that I have come across because they are usually all quite different. I have read, many times, that you should do your own research but, while others may have an interest in doing that, I do not. 

Thus, my fallback position is to be a 'Couch Potato' investor because it is cheap and easy which are two of my main traits as well.

Now, if I were a statistical analyst or something like that, I might feel differently and potentially join you in the wonderful world of stock picking and possibly market timing. 

It's a good thing that we are not all the same.


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## andrewf (Mar 1, 2010)

There's no evidence that statistical or stock analytical skills will help you outperform. Passive index investing isn't for people who are too dumb or lazy to make market-beating returns. It's really hard to beat the market! All the pro asset managers know how to really make money: deliver market returns and skim off 2%.


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## fatcat (Nov 11, 2009)

very good article (and video) about picking dividend stocks here: http://www.marketwatch.com/story/but-which-dividend-paying-stocks-2013-02-05?pagenumber=1

video: http://live.wsj.com/video/how-to-pi...network#!B2C886E6-8127-48E1-8152-7232BD44932B


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## doctrine (Sep 30, 2011)

gibor said:


> If you check David's spreadsheet on Appendix B - Near-Challenger, you will find there BCE and CVE
> doctrine, can you share your list?
> 
> I think FTS has long history of increases, but yield less than 4. The problem with David's list that he calculate increases in $US, thus TA was just last year removed from the list, even though they didn't increased dividends for a long time, but CAD$ was gaining vs $US
> ...


My list is now up to 20 stocks.. sorted by # of years of consecutive increases. It's an ongoing project, so it's not exhaustive yet. If you're interested the links on the sig block. Also,

-FTS's streak is 40 years now
-TRI has a good streak but so far I've found 12 Canadian companies that have increased their dividends for more than 10 years

This doesn't make them the best, or a good recommendation, but a potential useful resource for someone interested in buying these types of companies.


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## gibor365 (Apr 1, 2011)

doctrine said:


> My list is now up to 20 stocks.. sorted by # of years of consecutive increases. It's an ongoing project, so it's not exhaustive yet. If you're interested the links on the sig block. Also,
> 
> -FTS's streak is 40 years now
> -TRI has a good streak but so far I've found 12 Canadian companies that have increased their dividends for more than 10 years
> ...


I listed 5 Contenders + FTS .... wondering what are other 4 
btw, once I asked David Fish why FTS not on his list (FTS is not interlisted, but they can buy it on pink sheet), he said that if you convert CAD$ into US$, FTS doesn't have increasing streak....but we don't care , right?!


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## gibor365 (Apr 1, 2011)

doctrine, you have a great bloq!!! Tnanks


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## LOST (Aug 30, 2010)

I must also thank you for a great blog!


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## gibor365 (Apr 1, 2011)

Came accross LMT ... stock looks nice, Yield 5.2%, payout ratio at 50%, increasing dividends for 10 consecutive years by more than 20%, P/E about 10. Now it's trading exactly in the middle of 52 weeks high and low. what i don't like is pretty high debt and P/B ... Any opinions on LMT?


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## liquidfinance (Jan 28, 2011)

gibor said:


> Came accross LMT ... stock looks nice, Yield 5.2%, payout ratio at 50%, increasing dividends for 10 consecutive years by more than 20%, P/E about 10. Now it's trading exactly in the middle of 52 weeks high and low. what i don't like is pretty high debt and P/B ... Any opinions on LMT?


I think that one is a play on US defence spending and the US being at war....


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## gibor365 (Apr 1, 2011)

liquidfinance said:


> I think that one is a play on US defence spending and the US being at war....


LMT is the biggest defence contractor and like we or not, US all the time at the war....Serbia, Iraq, Afganistan....next maybe Iran or Syria?! So, maybe it's a good stock for long term income investor


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## fatcat (Nov 11, 2009)

gibor said:


> LMT is the biggest defence contractor and like we or not, US all the time at the war....Serbia, Iraq, Afganistan....next maybe Iran or Syria?! So, maybe it's a good stock for long term income investor


gibor, the us congress and obama are headed into a massive showdown over the budget sequester which will really hit defense stocks hard and there is an isolationist "we can't afford war" sentiment in the usa ... i would personally think about any defense related product twice before jumping in today

though i am looking at XHD and LMT is one of their holdings


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## GoldStone (Mar 6, 2011)

I ran a simple value screen the other day. US stocks, high ROE, low P/E. Noticed quite a few defense contractors in the results. I suspect they all sold off because of sequester concerns.


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## gibor365 (Apr 1, 2011)

GoldStone said:


> I suspect they all sold off because of sequester concerns.


 I suspect that those concerns are already priced in, even though I may be wrong.... I was talking about long-term and Obama will leave office in 3 years and who knows what will be after... 
I don't care so much about potential price decline, but more about sustainabilty of dividends and their growth. Currently David Fish of dripinvesting.org giving to LMT pretty high dividend Confidence factor greater than 70 and on dividend.com dividend reliabilty 4.5 out of 5 (higher only MO and HNZ)


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