Dividend Niche October Watch List

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It is the start of another month and time to consider which stocks will make the short list for screening. There is a great deal of volatility going on and major indices are down compared with their levels in July (DJIA -5.0%, S&P 500 -4.26%, NASDAQ -4.84% and the S&P/TSX -6.33%). There were two sharp drops along the way, the “black Monday/Tuesday” at the end of August, and another smaller drop at the end of September. I have a long-term horizon and plan to hold my stocks through significant volatility. The way I see it, times like these are excellent buying opportunities.

As my portfolio is just starting out, I am not really able to deploy enough capital to immediately reach my target sector and geographic allocations. I can begin to shortlist some of my planned core holdings with the aim of adding exposure to other sectors I do not currently hold. I do plan on adding additional shares of the stocks I already have in the portfolio, however I think it is best to consider a new position in October in the most underweight sector according to my targets. This means my short list this month will focus on the industrial sector.

I plan on holding Canadian, U.S. and international equities in my portfolio. Given the loonie is trading at 10 year lows against the greenback, I doubt I will be purchasing USD denominated stocks this month. This is rather unfortunate as I plan on eventually holding a majority of US/International equities.

Here are my Canadian industrial shortlist options for consideration this month: CNR, CP, BIN and SNC.

Canadian National Railway Co. (CNR): is engaged in the rail and related transportation business. The company offers integrated transportation services: rail, intermodal, trucking, freight forwarding, warehousing and distribution.

Ticker CNR
Stock Price $76.43
EPS $4.03
Dividend $0.31 $1.25
P/E 18.97
Dividend Yield 1.64%
Payout Ratio 27.90%
Div Growth Rate 16.28% 2013/2014

Canadian Pacific Railway Limited (CP): through its subsidiaries operates a transcontinental railway in Canada and the U.S. and provides logistics and supply chain expertise.

Ticker CP
Stock Price $194.51
EPS $9.23
Dividend $0.35 $1.40
P/E 21.08
Dividend Yield 0.72%
Payout Ratio 15.20%
Div Growth Rate 0% 2013/2014

Progressive Waste Solutions Ltd (BIN): provides non-hazardous solid waste collection, recycling, and landfill disposal services to commercial, industrial, municipal and residential customers throughout U.S. and Canada.

Ticker BIN
Stock Price $34.89
EPS $1.19
Dividend $0.17 $0.68
P/E 29.34
Dividend Yield 1.95%
Payout Ratio 50.20%
Div Growth Rate 6.90% 2013/2014

SNC-Lavalin Group, Inc. (SNC): provides engineering, procurement, construction, project management, project financing services to several industry sectors.

Ticker SNC
Stock Price $40.59
EPS $8.81
Dividend $0.25 $1.00
P/E 4.61
Dividend Yield 2.46%
Payout Ratio 11.20%
Div Growth Rate 4.35% 2013/2014

Even though they aren’t under consideration this time, here is the list of my US/Int’l industrial stocks currently on my watch list: SIEGY, GE, ABB, UTX, CAT, and EMR.

I look forward to hearing from others regarding ideas on dividend industrial stocks.

Disclosure: no current holdings in any of the stocks mentioned.

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3 thoughts on “Dividend Niche October Watch List

  1. We’ve been slowly adding CNR to take advantage of the recent lower price. I haven’t looked into BIN but from a quick research this looks like an interesting stock. I quite like the waste management sector because it gets overlooked quite often.

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    1. Hi Tawcan,

      I think there is a lot of potential in the waste sector. I have recently started delving into my research on the October industrial stocks on my watch list. What are your thoughts on the low yield for CNR? I do note the dividend has a healthy CAGR though. Cheers

      Like

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