Stingy Investor Search - Contact - Subscribe - Login
  Home | Articles | Links | SNW
Retirement 100 (Fall 2014)

The fall has always been a magical time for Canadians as the leaves change and the fills our plates. The crisp air reminds us of the months to come, but there is still time for a slice of pumpkin pie and a cup of apple cider. This is also the time of year when wise souls begin preparing for the winter. They bring their heavy coats out of storage, sock away preserves, and take care of small tasks that will make life easier when the snow arrives.

Similarly, you can start preparing for a comfortable retirement by putting together a dependable income-producing portfolio, and dividend stocks can help. They have a long and distinguished record of providing income to investors. And while stocks don't offer the guarantee that comes with government bonds, the income they generate tends to grow over time.

To help you find the best dividend stocks in Canada, we're pleased to present the latest edition of the MoneySense Retirement 100. It grades the largest dividend-payers in the country and helps you pick those that are right for your portfolio.

We're happy to report that our efforts have paid off handsomely so far. If you had rolled your portfolio into our new batch of A-graded stocks every year since our launch in 2007, you would have enjoyed a total gain of 142%. You'd be up a total of 91% if you had followed stocks with either A or B grades. That's pretty good, considering that the market suffered from a huge crash during that period. By way of comparison, the S&P/TSX Composite Index ETF (XIC), which tracks the broad Canadian stock market, logged a total return of just 38% over the same period. We also beat the dividend-oriented iShares Canadian Select Dividend ETF (XDV), which climbed by 58%.

Long-term results are one thing, but the Retirement 100 also generated solid returns over the past year. The 2013 A-graded Retirement 100 stocks advanced by 24% on average since last time, while those rated either A or B climbed 20%. In an unusual state of affairs, however, the index was a real competitor this year. The broader market surged over the past 12 months, with the S&P/TSX Composite ETF (XIC) advancing 24% and the Canadian Select Dividend ETF (XDV) gaining 20%.

To produce the Retirement 100, we grade each of Canada's largest dividend payers based on its ability to provide generous income to investors for a reasonable price. The process is sophisticated, but the letter-grade results are simple - they're as easy to understand as a report card.

To rate each stock we take a no-nonsense numbers-based approach. We start by scouring the Bloomberg database for detailed financial information on the largest dividend- paying stocks in Canada. Then we trim the list to remove firms that have been around for less than a year, and those lacking the detailed financial data we need. The grades we assign the remaining stocks are based on yield, reliability, and value.


The more money a company can send your way, the better. That's why we give top marks to stocks with generous dividend yields. We also reward businesses that have grown dividends over the lfive years, an indicator of the strength of their franchises.


We want some assurance that a company will continue to pay its shareholders. As a result, we favour stocks that earn more than they pay out in dividends. We give additional marks to those with little debt compared to their peers. After all, companies burdened by debt tend to be risky.


On the value front we want to buy lots of assets for a low price. The best grades go to companies with moderate or low price-to-book- value ratios. We als table stocks trading at reasonable prices relative to their earnings.

Putting all these factors together we arrive final grade for each of the largest 100 dividend stocks in Canada. This year, only two earned an 'A', but 13 managed solid 'B's this time around.

Retirement All-Stars
A Grade Stocks
Bank of Montreal (BMO)
Power Financial (PWF)
B Grade Stocks
Scotiabank (BNS)
Brookfield A.M. (BAM.A)
Cameco (CCO)
Cdn Natural Resources (CNQ)
Canadian Oil Sands (COS)
Canadian Tire (CTC.A)
Emera (EMA)
Genworth MI Canada (MIC)
Industrial Alliance(IAG)
Power Corp (POW)
TD Bank (TD)
As of September 8, 2014

We were pleased to see Power Financial (PWF) and the Bank of Montreal (BMO) get top grades again this year, as they did in 2013. Both offer dividend yields approaching 4% and trade at price-to-earnings ratios of just under 13, which is quite low compared to most Canadian stocks.

Three big banks earned solid 'B's this year.they are the Bank of Nova Scotia (BNS), CIBC (CM), and TD Bank (TD). Of the bunch, TD offers the lowest yield (at 3.3%) but it has also grown its dividend the most over five years.

Insurance firms were popular B-listers too, with Industrial Alliance Insurance (IAG), and Genworth MI Canada (MIC) getting the nod. Genworth is the cheapest of the two on a price-to-book-value basis (at 1.1 times), which reflects the market's unease with its mortgage insurance business.

Other B-graders include ATCO (ACO.X) and Emera (EMA), which are classified as utilities. But ATCO should really be thought of as an energy-heavy conglomerate.

Speaking of conglomefield Asset Management (BAM.A) and Power Corp (POW) also got 'B's. The former is known for its love of real estate and the later prefers insurance and asset management.

On the resource side of the ledger, Cameco (CCO), Canadian Natural Resources (CNQ), and Canadian Oil Sands (COS) were also near the top of the class. Cameco's fortunes are tied to the price of uranium and the others are influenced by oil prices.

Last, but not least, Canadian Tire (CTC.A) is the only retailer to get a 'B' this year. The firm has done quite well for itself, but it has been under assault by U.S. competitors who have recently invaded its turf.

Smart investors should also consider unique or intangible features that are not reflected in the hard numbers. For instance, if a mining company's tailings pond recently collapsed, it could be on the hook for expensive environmental damages not reflected on its balance sheet.

Please use our grades as a starting point for your research. Before buying any stock, make sure its situation hasn't changed significantly and that it's right for you. While we're overjoyed with our long-term results, that doesn't mean we can guarantee you'll make a fortune with every A- or B-rated stock. The market is too wild and woolly for that. Nonetheless, we think such stocks deserve your attention and further research. Perhaps while sipping a little apple cider this fall.

Download the Retirement 100 table (a .xls file)

First published in the November 2014 edition of MoneySense magazine.

Past Retirement 100 / Income 100 / Top Trusts Articles

    Retirement 100: Fall 2013
    Retirement 100: Fall 2012
    Retirement 100: Fall 2011
    Retirement 100: Fall 2010
    Income 100: Summer 2009
    Income 100: Summer 2008
    Income 100: Summer 2007
    Top Trusts 2006
    Top Trusts 2005

Globe & Mail Articles

 Dividend All-Stars for 2024
 250 Megastars for 2024
 Extreme yields
 The easy way
 Smaller stable dividend
 250 Megastars for 2023
 Champagne portfolio
 Screaming Value
 Blended momentum
 Dividend monster
 Frugal dividend
 Stable dividend
 Speads and recessions
 TSX 60 for value investors
 Looking at 10-year returns
 Watching for a bottom
 Oh, bother!
 Indexing advice
 Media-shy stocks
 Curse of size
 Market uncertainty
 Be even lazier
 Scary beats safe
 Small, illiquid, value
 Use the numbers
 What value is good value?
 Sculpt for value
 Value vs CAPE
 Graham Rules
 CAPE vs PeakE
 Top value ratio
 Low Beta
 Value and dividends
 Walter Schloss
 Try unloved AIG
 Why I'm a value investor
 New world of ETFs
 Low P/Es possible
 10 yielders
 Be happier
 Dividend Downside
 Shiller's P/E
 Copycat investing
 Cashing in on class
 Index roulette
 Theory collides
 Diving too deep
 3 retirement villains
 Scourge of inflation
 Economic omens
 Analyst Expectations
 Value stock scarcity
 It's all in the index
 How to pick good funds
 Low Beta Wins
 Hunt for dividend stocks
 Think garage sale

MoneySaver Articles
 2 Graham Stocks for 2018
 2 Stingy Stocks for 2017
 2 Graham Stocks for 2017
 3 Stingy Stocks for 2016
 5 Graham Stocks for 2016
 3 Stingy Stocks for 2015
 3 Graham Stocks for 2015
 3 Stingy Stocks for 2014
 4 Graham Stocks for 2014
 8 Stingy Stocks for 2013
 6 Graham Stocks for 2013
 9 Stingy Stocks for 2012
 8 Graham Stocks for 2012
 Simple Way 2011
 5 Stingy Stocks for 2011
 7 Graham Stocks for 2011
 Simple Way 2010
 5 Stingy Stocks for 2010
 8 Graham Stocks for 2010
 Simple Way 2009
 Timing Temptation
 19 Stingy Stocks for 2009
 4 Graham Stocks for 2009
 Simple Way 2008
 Active at Passive Prices
 Unbundling ETFs 2008
 5 Stingy Stocks for 2008
 5 Graham Stocks for 2008
 Is your index too active?
 Graham's Simple Way
 Canadian Graham Stocks
 5 Stingy Stocks for 2007
 8 Graham Stocks for 2007
 Top SPPs
 The Simple Way
 A hole in your IPO?
 Monkey Business
 8 Stingy Stocks for 2006
 Graham Stock Gainers
 Blue-Chip Blues
 Are Dividends Safe?
 SPPs for 2005
 Graham's Simplest Way
 Selling Graham Stocks
 RRSP Money Market Funds
 Stingy Stocks for 2005
 High Performance Graham
 Intelligent Indexing
 Unbundling Canadian ETFs
 A history of yield
 A Dynamic Duo
 Canadian Graham Stock
 Dividends at Risk
 Thrifty Value Stocks
 Stocks in Short Supply
 The New Dividend
 Hunting Goodwill
 SPPs for 2003
 RRSP: don't panic
 Desirable Dividends
 Stingy Selections 2003
 10 Graham Picks
 Growth Eh?
 Timing Disaster
 Dangerous Diversification
 The Coffee Can Portfolio
 Down with the dogs
 Stingy Selections
 Frugal Funds
 Graham Revisited
 Just Spend It
 Ticker Temptation
 Stock Mortality
 Focus on Fees
 SPPs for the Long Term
 Seeking Solid Stocks
 Relative Strength
 The VR Approach
 The Irrational Investor
 Value Investing

Old MS Articles
 Cdn Top 200 2018
 Cdn Top 200 2017
 Cdn Top 200 2016
 Cdn Top 200 2015
 Cdn Top 200 2014
 Cdn Top 200 2013
 Cdn Top 200 2012
 Cdn Top 200 2011
 Cdn Top 200 2010
 Cdn Top 200 2009
 Cdn Top 200 2008
 Cdn Top 200 2007
 Cdn Top 200 2006
 Cdn Top 200 2005
 US Top 500 2018
 US Top 500 2017
 US Top 500 2016
 US Top 500 2015
 US Top 500 2014
 US Top 500 2013
 US Top 500 2012
 US Top 500 2011
 US Top 500 2010
 US Top 500 2009
 US Top 500 2008
 US Top 500 2007
 US Top 1000 2006
 Dividends 100 2017
 Dividends 100 2016
 Retirement 100 2015
 Retirement 100 2014
 Retirement 100 2013
 Retirement 100 2012
 Retirement 100 2011
 Retirement 100 2010
 Income 100 2009
 Income 100 2008
 Income 100 2007
 Top Trusts 2006
 Top Trusts 2005
 Hot Potato
 Buffett Buys
 Stocks that pay
 Value in the S&P500
 Where to invest $100k
 Where to invest $10k
 Summer Simple Way
 A crystal ball for stocks?
 Cheap & safe
 Risky business
 Dividend investing
 Value investing
 Momentum investing
 Low P/E P/B
 Dividend growers
 Graham's prescription
 The case for optimism
 Wicked investments
 Simply spectacular
 Small stocks, big profits
 Value that sizzles
 So simple it works
 No assembly required
 Investing by the book
 Invest like the masters
 A simple way to get rich
 Stocks for cannibals
 Car bites dogs
 So easy, so profitable
 Dogs of the Dow
 Money for nothing
 Yield of dreams
 Return of the master

Advisor's Edge Articles
 Passive Rebundling
 Doing the math

Flip Books

About Us | Legal | Contact Us
Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More...