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 April; 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 |
| Fortis Inc | 39.86 | 15.58 | 42 | 3.76 | 5.01% | 54.95% |
| Metro Inc | 42.49 | 19.83 | 21 | 1.32% | 14.70% | 23.12% |
| Canadian National Railway | 80.64 | 18.33 | 20 | 1.86% | 18.28% | 28.15% |
| Canadian REIT | 44.34 | 16.26 | 14 | 4.06% | 4.95% | *70.25% |
| Inter Pipeline Ltd | 26.04 | 20.4 | 13 | 5.99% | 10.41% | *68.00% |
| Alaris Royalty Corp. | 29.57 | 18.09 | 8 | 5.48% | 10.62% | 80.00% |
| Magna International | 51.73 | 8.35 | 6 | 2.51% | 33.18% | 18.19% |
| Cineplex | 50.89 | 23.95 | 5 | 3.07% | 4.10% | 72.16% |
*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).
With the watch list for April, there are four companies which have 3 points awarded to them, however IPL’s valuation has been steadily increasing as people have been bidding up shares, and the P/E has just gone over 20, so it is removed from the Top Picks.
It’s been the same companies for a while now which scream quality assets, but the valuations are also high and the dividends are low for my favourites Metro Inc and Canadian National Railway, but I’m fast approaching a junction where I should be diversifying into other sectors and beefing up some like Industrials and Utilities.
I’m also noticing that the Canadian dividend growth list which interests me is slowly dwindling as I open and increase positions in these stocks which pique my interest, and I’d really like to shift towards U.S. stocks soon. Regarding this, I can only hope that the $CAD continues to strengthen and that by the time I’m ready to start focusing my attention elsewhere that I can get a decent exchange, or it will be much harder to become profitable.
The top stocks on this list in order are:
- Canadian National Railway (CNR)
- Metro Inc (MRU)
- 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, thanks for sharing your watchlist. The 3 you’ve selected look as though any of them will be good buys for you. Will be interested to see what you deploy your capital into.
Tristan
Hey Tristan,
My pleasure bud. This helps me as much as it may help anyone else. These three have consistently shown on my list for a couple months in a row yet I find the valuations high (MRU) or the dividends low (CNR, MG)… And with so many other great opportunities I keep putting it off. Recently bought into AD and IPL, so we’ll see where the rest of the month takes me. Thanks for commenting!
Nice list of stocks DB I have my eye on Magna I purchased a small position earlier in the year, and I plan on purchasing more shares in the near future.