MoneyMaaster’s Summer Stock Screen. 13 stocks to check out.

Stock Screener: Canadian Edition

It’s been a while since I’ve posted any top picks, stocks buys or analysis.  The summer is usually a bit slower around here, the days are longer, the beers are colder, the kids are actually able to get out and enjoy some fresh air, so finding time to write, or even think about stocks gets a little tough.

That said, we recently decided to officially list/sell our cabin, which means we will have a little extra money to invest.  The goal is to invest about 70% of the proceeds, use 20% on renovations to the house, and save the rest. This means I need to start doing some research.

I decided to do a custom stock screen of Canadian stocks, which are listed on the “Canadian Dividend All Star List”.   This list contains Canadian stocks which have increased their dividend for 5 consecutive years in a row, or more.  The list also has other valuable information, such as:

• How many consecutive years of dividend growth
• Current stock price
• 3 & 5 year dividend growth
• Payout ratio (Trailing 12 month & estimated next year)
• Earnings per share (Trailing 12 month and estimated next year)
• Price/Earning Ratio (Trailing 12 month & estimated next year)
• Current & Quick Ratio
• Analyst Price Target
• Market cap
• Yield
• Much more

The list has about 100 stocks on it.  I decided I wanted to narrow this down to the best of the best (based purely on the fundamentals).  Some factors I looked at were:

• 5 year dividend growth of at least 10%
• 5 year EPS growth
• TTM Price/Earning under 15
• Estimated PE/Next 12 months under 15
• Current ratio (extra points to Current ratio of 1.5+)
• Price Target and % currently discounted (point to stocks trading at  10%+ discount)
• Payout ratio under 40%
• Consecutive years of dividend increases

I like visuals, so I went through the entire list, highlighted in green any stocks that looked great in the metrics listed above, and highlighted in red the ones that looked bad.  I then sorted the entire list and ranked the stocks by which ones had the most green (positive metrics) minus any negative metrics.  This is not 100% scientific obviously, however I find it’s a great starting point to narrow down the list to 10-15 stocks to look at in more detail.  There were 13 stocks that had at least 5 positive metrics with zero negatives.

Only 1 company on the list had 9 positive metrics. This was EXCO Technologies.

Exco Technologies is a Canadian global designer, developer and manufacturer of dies, moulds, components and assemblies, and consumable equipment for the die-cast, extrusion and automotive industries. (Source: Wikipedia).

Exco boasts a 5 year dividend growth rate of 17.6%, coupled with a payout ratio under 40%.  Exco is also trading at a relatively low P/E of 9.97, and trading at a discount of 27% from the consensus analyst target. The company has a history of buying back shares and currently has a dividend yield of 3.82%.  With any stock, there is always some risk, Exco is coming off a disappointing quarter, and could be hurt if auto sales to the US are impacted due to Trump.  Always do your own research before buying any stock!

Now onto the rest of the results…

Full List, ranked in order.  Number in brackets is how many positive metrics it scored from me.

1. Exco Technologies (9)
2. Equitable Group INC  (8)
3. Canadian Tire Corp   (8)
4. Richelieu Hardware Ltd (7)
5. CCL Industries (7)
6. Andrew Peller Ltd (6)
7. CAE Inc (6)
8. Enghouse Systems Limited (6)
9. Canadian Western Bank (6)
10. Dollarama (5)
11. Methanex Corp (5)
12. Alimentation Couche Tard (5)
13. TD Bank (5)

There were a few others that were really close, but happened to miss out one one of the metrics above.  These companies were all scored a 4:

• Metro Inc
• Saputo Inc
• Stella Jones
• Gildan Activewear
• Transcontinental Inc,
• Logistec Corporation
• Loblaw

I am not recommending any specific stock on this list (yet), as this is just phase one for me.  Next step is to do a deep dive into each, to narrow it down to 5-6 that I plan on opening a position in once the cabin sells.  The good news is, there are a few on the list which I already own, and a few others I had on my watch list already.

If you own any of the stocks on the list, or have any comments on any of the stocks listed, please let me know in the comments.

Have a great weekend!