As we watch the market rise and fall, sometimes we see a big drop – the perfect opportunity to push some capital into the market and make some dividend growing investments. However, when this happens, many will watch and become lost in the vast amount of opportunities and potential investments. Which one is the best fit? Which one has the greatest expected dividend growth? These exact queries are the reason it’s so incredibly useful to make or follow a stock watch list every month, so when opportunities present themselves in abundance you know where to put your money.
Following are my picks for the month of February; these stocks are in no way recommendations; they are simply the stocks that I watch throughout the month and am hopeful to allocate capital to if given the chance and opportunity.
My stock watch list follows a simple formula; of which the details can be read below. Things I like are coded in green, while things I dislike are coded in red. Companies which add up to 3 or more points (things I like – things I dislike) have their name coded in green, and are generally considered high-quality assets by me.
Things I like are:
- P/E below 10
- Yield above 4.00%
- Payout ratio below 50%
- 5-Year Yield Growth above 10%
- 10-Year Dividend Growth Streak
Things I dislike are:
- P/E above 20
- Payout Ratio above 80%
February 2016 Stock Watch List
| Company | Current Price | P/E (TTM) | Years of Div. Growth | Div Yield | 5 Year Div Yield Avg | 5 Year Div Growth Rate | Payout Ratio |
| Canadian REIT | 40.78 | 16.11 | 14 | 4.41 | 3.88% | 5.07% | 70.25% |
| Plaza Retail REIT | 4.56 | 14.8 | 13 | 5.7 | 4.87% | 5.34% | 51.27% |
| Canadian National Railway | 74.22 | 16.87 | 20 | 2.02 | 1.51% | 18.28% | 28.15% |
| TransCanada Corp. | 49.4 | 20.95 | 15 | 4.21 | 3.78% | 4.78% | 86.34% |
| Royal Bank of Canada | 71.14 | 10.58 | 5 | 4.44 | 3.91% | 9.02% | 45.64% |
| National Bank of Canada | 39.83 | 8.85 | 6 | 5.42 | 3.90% | 10.03% | 44.68% |
| Toronto-Dominion Bank | 52.4 | 12.43 | 5 | 3.89 | 3.49% | 10.39% | 47.36% |
| Magna International | 45.48 | 6.97 | 6 | 1.93 | 1.73% | 76.00% | 17.44% |
| Fortis Inc | 41.47 | 16.24 | 42 | 3.62 | 3.54% | 4.24% | 55.10% |
| Atco Limited | 39.77 | 18.43 | 22 | 2.87 | 1.74% | 11.46% | 44.58% |
Given this list, there are four companies with over 3 points. One company, National Bank of Canada (NA) actually has 4 points… This is the most recent stock I’ve been toying with the idea of purchasing, so things are looking good there. My favourite out of all these would have to be NA and CNR.
The top stocks on this list in order are:
- National Bank of Canada (NA)
- Canadian National Railway (CNR)
- Magna International (MG)
- Atco Limited (ACO.X)
If you find comfort in holding a stock watch list through each month, I implore you to subscribe to The Dividend Beginner newsletter, and you will receive my monthly stock watch lists directly in your e-mail inbox at the time of posting.
How do my fellow investors’ watch lists look like? What are you thinking of buying this month? Why?
Im thinking of switching my focus to Canadian stocks from the US – esp now that the exchange rate has gotten so bad, it takes so much more longer for my savings to accumulate. Still..there are some decent opportunities out there.
Very nice shortlist. All excellent companies here. I own TD, CNR and MG from this list…and ACO’s sister company CU.
R2R
Hey R2R,
You could do that, U.S. stocks have been tanking, and you could make a great return just on the exchange. But you’ll lose your U.S. diversification. Guess there’s a good and bad side to each coin.
You own some high-quality assets there, congrats.
Thanks for commenting,
DB