The Globe and Mail attempts to identify high-yielding Canadian dividend stocks with a focus on sustainability in its Thursday edition. The Globe's guest columnist Ian Tam writes in the Number Cruncher column that to make his picks, he ranked stocks from Morningstar's CPMS database of 700 companies using the following criteria: Trailing dividend yield (based on what the company paid in the trailing four quarters);
Expected dividend yield (based on what the company has announced it will pay, but has not yet paid);
10-year standard deviation of earnings (a stability/safety factor measuring how volatile a company's earnings have been over the past 10 years, lower figures preferred);
180-day standard deviation of total returns (another stability factor, this time measuring the movement of the stock inclusive of dividends, lower figures preferred). He only considered companies with a dividend-payout ratio on earnings of less than 80 per cent or a dividend payout ratio on cash flow of less than 60 per cent. His picks had to have a market capitalization greater than $115-million. Mr. Tam's select dividend stocks are BCE, Firm Capital Mortgage Investment, Bank of Nova Scotia, Telus and Morguard REIT.
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