The Globe and Mail attempts to identify Canadian companies that
generate high economic
profit for the shareholders,
above-average dividend growth
rates and that are trading at
interesting multiples in its Tuesday, Sept. 29, edition. The Globe's guest columnist Jean-Didier LaPointe writes in the Number Cruncher column that he looked for high
economic and accounting
performance, as well as
attractive valuation multiples to
identify long-term investment
opportunities.
Return on capital had to be greater than 10 per cent. Mr. LaPointe's pick had to pay a dividend. He only looked at companies with a one-year dividend growth rate greater than 10 per cent. As well, the five-year dividend growth rate also had to be above 10 per cent. Qualifying stocks had to have a price-to-earnings ratio of 15 or
less. Finally, the current price-to-earnings ratio
had to be below the five-year average. Only nine Canadian companies
made the cut. Mr. LaPointe's Canadian dividend stocks with high profits and dividend growth are CI Financial, Cogeco, Domtar, Home Capital Group, Magna International, Nevsun Resources, Potash Corp. of Saskatchewan, Royal Bank of Canada and WestJet Airlines.
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