Canadian Dividend Report - February, 2020 Update

Hello dividend investors!

Dividend investing is a great way to add an income component to your portfolio. Many investors eye a stock and then when the dividend yield is above a certain value - say, in the 75th percentile of its historical yield - they buy. It’s kind of an indirect value play, as yields and share prices move inversely with each other, all else being equal. As long as the fundamentals of the company remain strong and you aren’t going to get burned on the other end by taking a large capital loss, it’s a solid strategy.

Investors are also attracted to companies which offer a Dividend Reinvestment Program, or DRIP. These programs give investors the option of foregoing the cash dividend they are entitled to in favour of purchasing additional shares. The terms vary company to company, but most will either pay you in shares based on the last trading price on the dividend date or the average trading price over a certain number of days.

There are benefits to the company as well. Instead of paying out cash, which may be detrimental to its balance sheet, it gets to save that cash and invest it back into the company to support the business, pay down debt, or anything else management deems worthy. The best part is that some of these companies will even give investors a discount if they choose to participate. Since cash dividends are paid out of retained earnings, which is part of shareholder’s equity, the program makes sense as long as the company’s return on equity is higher than the discount. Everyone wins!

Check out some stats on dividend yields by sector for the 230 companies which make up the S&P/TSX Composite Index. I calculated the forward yield which assumes that the most recent or announced dividend will continue for the next 12 months. For companies paying dividends in U.S. Dollars, I converted the dividend back into Canadian dollars using the most recent FX rate of 1.32313.

Also, everyone is free to download the full list here into Excel format. This report shows dividend statistics on all 230 S&P/TSX Composite Index companies, including rates, dates, yields, frequency, and DRIP information. If you like the way this looks and are interested in other fundamental metrics such as valuation ratios and growth rates for TSX companies, please consider subscribing here to get free access to even more reports!

Thanks for reading, and I hope you’ve found this useful.