National Bank Selects These 21 Stocks in its Dividend All-Stars Playbook for The Second Half

Last week, analysts at National Bank of Canada released an update on their top sustainable dividend stock ideas for income-seeking investors in the current market.

The Dividend All-Stars group selects companies from a range of industries that are various sizes but all share a specific investment criteria.

These stocks need to have a dividend yield of above 4% per anum, a positive bias on the stocks share price/outlook and low risk of the company paying unsustainable dividends but are instead growing.

Since NBF first published the portfolio on the 15th of February in 2022 (~7 months), 2.94% of income has been returned to investors while the capital price of the shares has fallen -2.75% which is a net overall return of about -0.2% over the period.

This stacks up well compared to the Toronto Stock Exchange’s composite which had fallen -5.2% over the same time period. For some comparison, the TSE’s return was made up of only 1.51% of income and -6.7% in capital returns.

Since the institution first published the list, seven of the companies have increased their dividend rate. The total number of dividend increases has significantly outpaced dividend reductions in the portfolio over the long term (since inception in 2012).

Two companies were removed from the list since the last publication.

The first being the European Residential REIT (CA:ERE.UN), which was removed due to a deteriorating medium term outlook in Europe.

The second company was the Canadian minerals giant, Lundin Mining Corp (CA:LUN). NBF analysts removed the company because of a recent transaction which they believe could impact free cash flows and dividend sustainability.

Real estate trust Killam Apartment REIT (CA:KMP.UN) was the only stock to be added to the portfolio during this update. The REIT focuses on owning, operating, developing and managing residential apartments across Canada. The REIT currently pays slightly above 4% income per anum.

The other companies that remained in the portfolio over the half included;

Telecommunications company BCE Inc (formerly Bell Canada Enterprises) which has a current dividend yield of ~5.8%.

In the financial’s sector, NBF holds alternative credit provider, Alaris Equity Partners (paying ~7.6%), asset manager IGM Financial (yield 6.4%) and Canadian banking giant CIBC (yield 5.4%).

KP Tissue was the only stock from the household products sector with a ~6.6% current dividend yield.

For Industrial Services, NBF is continuing to recommend Dexterra Group (6% yield) and Transcontinental (5.5% yield).

Energy Infrastructure company Topaz Energy is the only Oil & Gas constituent with a 5.5% dividend yield.

Exchange Income Corp (yield 5.4%) and Mullen Group (5% yield) are two companies held from the Transportation sector.

The Pipeline & Utilities sector is the second largest weighting in the portfolio with 5 companies held. These in order of largest yield are Enbridge (6.3% yield), Keyera Corp (6.2% yield), Algonquin Power & Utilities (5.2% yield), Capital Power (4.6% yield) and AltaGas (3.7%) yield.

The final sector with the largest weighting of stock allocation is the Real Estate sector (6 picks), which historically tends to pay higher dividend yields through the trust investment structure. These REIT’s include; Dream Industrial (5.8% yield), Allied Properties (5.5% yield), Choice Properties (5.4% yield), CT Real Estate (5.2% yield) DRI Healthcare (4.6%).

Below you can find the table with each of the stocks tickers linked to the Fintel platform profile:

Ticker Name  Sector  Est Yield
CA:BCE Bell Canada Enterprises Communications 5.80%
CA:AD.UN Alaris Equity Partners Financials 7.60%
CA:IGM IGM Financial Financials 6.40%
CA:CM Canadian Imperial Bank (CIBC) Financials 5.40%
CA:KPT KP Tissue Household Products 6.50%
CA:DXT Dexterra Group Industrial Services 6.00%
CA:TCL.A Transcontinental Industrial Services 5.50%
CA:TPZ Topaz Energy Oil & Gas 5.50%
CA:ENB Enbridge Pipeline / Utilities 6.30%
CA:KEY Keyera Corp Pipeline / Utilities 6.20%
US:AQN Algonquin Power & Utilities Pipeline / Utilities 5.20%
CA:CPX Capital Power Pipeline / Utilities 4.60%
CA:ALA AltaGas Pipeline / Utilities 3.70%
CA:DIR.UN Dream Industrial REIT Real Estate 5.80%
CA:AP.UN Allied Properties REIT Real Estate 5.50%
CA:CHP.UN Choice Properties Real Estate 5.40%
CA:CRT.UN CT Real Estate Investment Trust Real Estate 5.20%
CA:DHT.UN DRI Healthcare Trust Real Estate 4.60%
CA:KMP.UN Killam Apartment REIT Real Estate 4.20%
CA:EIF Exchange Income Transportation 5.40%
CA:MTL Mullen Group Transportation 5.00%

This article originally appeared on Fintel

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