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Archive for the ‘Dividend Aristocrat’ Category

Last month I looked at the composition of the TSX 60 and noted that large portions of the index cannot be considered quality dividend payers. In this month’s post, I will apply the Dogs of the DOW strategy to an index comprised of high quality dividend payers, namely the Indxis Dividend Achievers list.

Specifically, I will apply the technique to 3 indexes: the Broad Canadian Dividend Achievers Index, the US Broad Dividend Achievers Index and the International Dividend Achievers Index. To make the Canadian list, a company must trade on a major Canadian exchange and have increased their dividends for at least 5 years in a row. The American list is more stringent requiring companies to have increased dividends 10 years in a row in addition to trading on either the NYSE or NASDAQ. The International list is comprised of companies that have increased their dividends for at least 5 years in a row and are incorporated outside of the United States but trade on a major US exchange. To be included in any of the indexes a company must satisfy certain liquidity requirements to ensure the equities are easily traded.

I have named my list the Underachieving Achievers of their respective index. Here they are, calculated for market close on October 15th 2010:

Canadian Underachieving Achievers


Name Symbol Close Price 16/10/2010 Dividend Yield Annual Dividend
A G F MANAGEMENT LTD AGF.B-T 16.48 6.3 1.04
ALTAGAS INCOME TR ALA-T 21.84 6 1.32
INNERGEX PWR INCOME FD INE-T 9.66 6 0.58
GREAT WEST LIFECO INC GWO-T 25.28 4.9 1.23
IGM FINANCIAL INC IGM-T 42.02 4.9 2.05
POWER FINANCIAL CORP PWF-T 29.4 4.8 1.4
AG GROWTH INTL INC AFN-T 42.95 4.7 2.04
POWER CORP CDA POW-T 27.02 4.3 1.16
TELUS CORP T-T 46.25 4.3 2
TRANSCANADA CORP TRP-T 38.22 4.2 1.6

Note in keeping with David Stanley’s precedent established for his BTSX index I have excluded any income trusts that have not converted to corporations as of October 15 2010 as well as any REITs.

American Underachieving Achievers


Name Symbol Close Price 16/10/2010 Dividend Yield Annual Dividend
VECTOR GROUP LTD VGR-N 18.55 8.6 1.6
CENTURYTEL INC CTL-N 39.88 7.3 2.9
PITNEY BOWES INC PBI-N 21.86 6.7 1.46
BANCORPSOUTH INC BXS-N 14.01 6.3 0.88
SUBURBAN PROPANE PARTNERS L SPH-N 54.13 6.2 3.38
ALTRIA GROUP INC MO-N 24.88 6.1 1.52
AT&T INC T-N 28.33 5.9 1.68
MERCURY GENL CORP NEW MCY-N 42.26 5.6 2.36
CINCINNATI FINL CORP CINF-Q 29.87 5.4 1.6
LILLY ELI & CO LLY-N 37.76 5.2 1.96

Note I have excluded MLPs and REITs from this list.

International Underachieving Achievers


Name Symbol Close Price 16/10/2010 Dividend Yield Annual Dividend
NATIONAL GRID PLC NGG-N 45.87 7.7 3.55
VODAFONE GROUP PLC NEW VOD-Q 26.92 6.5 1.74
TELEFONICA S A TEF-N 81.51 6 4.91
P T TELEKOMUNIKASI INDONESIA TLK-N 40.97 5.7 2.32
TELEFONOS DE MEXICO S A B TMX-N 14.82 5.3 0.79
TOTAL S A TOT-N 54.88 5.1 2.78
TEEKAY CORPORATION TK-N 27.77 4.6 1.26
GLAXOSMITHKLINE PLC GSK-N 41.53 4.4 1.83
SANOFI AVENTIS SNY-N 35.17 4.2 1.47
STATOIL ASA STO-N 22.08 4.2 0.92

Note I have excluded Canadian companies from the international list to avoid overlap.

I plan on republishing this list in May along with the Beat the BTSX list and track the performance of the Underachievers against their index as well as against the Beat the BTSX. It will be interesting to see how the Underachievers perform against their respective indexes. It could be that selecting the highest dividend payers from a list that already constitutes a list of high quality dividend payers will result in a concentration of lower quality companies.

Finally, I will track a combined list of underachievers comprised of the top 4 underachievers from each of the above lists. This will give me a geographically diversified list of dividend achievers. Here it is as calculated on October 15 2010.

Combined Dividend Achievers List


Name Symbol Close Price 16/10/2010 Dividend Yield Annual Dividend
VECTOR GROUP LTD VGR-N 18.55 8.6 1.6
NATIONAL GRID PLC NGG-N 45.87 7.7 3.55
CENTURYTEL INC CTL-N 39.88 7.3 2.9
PITNEY BOWES INC PBI-N 21.86 6.7 1.46
VODAFONE GROUP PLC NEW VOD-Q 26.92 6.5 1.74
BANCORPSOUTH INC BXS-N 14.01 6.3 0.88
A G F MANAGEMENT LTD AGF.B-T 16.48 6.3 1.04
TELEFONICA S A TEF-N 81.51 6 4.91
ALTAGAS INCOME TR ALA-T 21.84 6 1.32
INNERGEX PWR INCOME FD INE-T 9.66 6 0.58
P T TELEKOMUNIKASI INDONESIA TLK-N 40.97 5.7 2.32
GREAT WEST LIFECO INC GWO-T 25.28 4.9 1.23

In a future post I will calculate the Net Payout for the companies in the various achievers lists and track an underachievers list that factors in share buybacks. It will be interesting to see whether share buybacks plus dividends out perform a simple dividend strategy when tracked against the Dividend Achievers index.



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