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%
| Company | Price | P/E | Div. Growth Streak | Div Yield | 5 Year Div Growth Rate | Payout Ratio |
| Canadian REIT | 43.51 | *17.98 | 14 | 4.14% | 5.07% | *70.25% |
| Plaza Retail REIT | 4.74 | *14.9 | 13 | 5.49% | 5.34% | *75.10% |
| Canadian National Railway | 78.82 | 17.92 | 20 | 1.9% | 18.28% | 28.15% |
| Inter Pipeline Ltd | 25.45 | 19.94 | 13 | 6.13% | 10.41% | *68.00% |
| Agrium | 114.95 | 12.31 | 5 | 3.04% | 98.68% | 36.13% |
| Enbridge Income Fund Holdings | 29.81 | 16.25 | 5 | 6.26% | 5.23% | *79.00% |
| Magna International | 54.69 | 8.6 | 6 | 1.61% | 76.00% | 17.44% |
| Fortis Inc | 39.26 | 15.35 | 42 | 3.82% | 4.24% | 55.10% |
| Metro Inc | 42.55 | 19.86 | 21 | 1.32% | 14.70% | 23.12% |
*These items were calculated using adjusted funds from operations (AFFO), which offer better clarity for the particular industry. In the case of the REITs, the P/E is calculated using AFFO rather than earnings, so the title of this metric would be P/AFFO (Price-to-adjusted funds from operations).
This month I am opting out of Financials, unless there is a huge deal to be had (which I doubt for the next while), after pumping a large sum of cash into Financials throughout January and finding that my exposure is a little too high at this time. With the watch list for March, there are three companies which have 3 points awarded to them. However, I am looking into Enbridge Income Fund Holdings as one of my top picks regardless.
The top stocks on this list in order are:
- Canadian National Railway (CNR)
- Metro Inc (MRU)
- Inter Pipeline Ltd (IPL)
- Magna International (MG)
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?
Hey DB,
I think it’s a great strategy knowing which companies you want..while you just bide your time until they look good value. That way, you don’t buy duds that look good value on any given day.
Tristan
Hey Tristan,
It’s always a pleasure to scope up what I’m interested in at the start of the month to offer some clarity for me among all the moving numbers throughout the month. I can even check back here and see how they stack up month over month. Give it a shot.
DB
Are all stocks considered in your screening on the “Canadian Dividend All Star List?
Hi Bernie,
All stocks from this watch list are on the Canadian Dividend All Star List; that’s where I get the majority of my investment inspiration from. My stock picking strategy for my DGI portfolio only encompasses Dividend All Stars.
DB