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.

Summer Beer

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 Stock Screen Winner

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!

9 Comments on “MoneyMaaster’s Summer Stock Screen. 13 stocks to check out.

  1. A break from drinking beer? You crazy man!
    Also selling rhe cabin? whys that. Not using it enough?

    nice list. I like a couple on here, look forward to your breakdowns.

    cheers!

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  2. Well..truth be told, the break was short. Just had 2 beers..haha

    As for the cabin…it was a tough decision..and I’m sure we will get another one soon..but we bought our cabin 7 years ago (before kids) and the size/layout etc, just don’t work well with kids. We’ve also missed out on a lot of things to do in the city over the last few years…so it will be nice to spend some summer weekends in the city, going to the zoo..etc.

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  3. Nice process Jordan. Very disciplined. Having so few Canadian stocks, no surprise I do not own any of them. 😦 Looking forward to some of your dives so I can learn a little more and of course interested if you pull the trigger on any buys. Tom

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    • Thanks Tom.

      Currently working on a big project – which I think you may find pretty interesting…will be my most ambitious post yet…so may not jump into these dives for a month or so…

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  4. The list contains a few really good companies.
    Anyway, many of them are overvalued and the expected return might be less then what you will expect.
    One example is Canadian Tire which even after $20 drop is still overvalued… a fair value will be around $140.

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  5. Hi Cris

    Thanks for stopping by. I did use P/E as well as estimated P/E for the next 12 months in my screen.

    Canadian Tire didn’t get highlighted for either as a “positive”, however at the time of the screen, the Trailing 12 month P/E was 16.08, and the estimated next 12 month P/E was 14.07. Although slightly higher than a lot on the list – I wouldn’t consider it HUGELY overpriced.

    Canadian tire has a low payout ratio, an increasing divdend, and a 5 year earnings per share growth rate of over 10%.

    Like I said, as far as strictly value goes, it wasn’t highlighted on my screen as a great value (though I wouldn’t say terrible value either). It was highlighted for the other reasons mentioned above (and a few others.)

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