Canada
10 Canadian Dividend Stocks
The Dow Jones Canada Select Dividend Index represents the leading Canadian stocks by dividend yield. The index contains 30 stocks which are selected annually based on dividend yield.
The divided yield of this index is 4.37% as of July 30th. The annualized total return of the index is 10.65% in Canadian dollar terms. Financials account for about 61% of the total allocation.
The Top 10 components of the Dow Jones Canada Select Dividend Index are:
1.Canadian Imperial Bank of Commerce(CM)
Current Dividend Yield: 4.82%
2.Bank of Montreal (BMO)
Current Dividend Yield: 4.43%
3.Toronto-Dominion Bank (TD)
Current Dividend Yield: 3.20%
4.National Bank of Canada (OTC: NTIOF)
Current Dividend Yield: 4.11%
5.Telus Corp (TU)
Current Dividend Yield: 4.92%
6.Bank of Novo Scotia (BNS)
Current Dividend Yield: 3.70%
7.Manitoba Telecom Services Inc (OTC: MOBAF)
Current Dividend Yield: 9.84% *
* Note: Manitoba cut its dividends by a third on August 6th and also lowered the outlook
8.Royal Bank of Canada (RY)
Current Dividend Yield: 3.72%
9.IGM Financial Inc(OTC: IGIFF)
Current Dividend Yield: 4.97%
10.Canadian Utilities Ltd(OTC: CDUAF)
Current Dividend Yield: 3.46%
Montreal-based National Bank of Canada is the 6th largest bank in Canada. The bank operates most of its branches in the French-speaking province of Quebec.
Canadian Banks’ Equity Third Worst in the World
An interesting article by Peter Boone and Simon Johnson of The Baseline Scenario blog discussed about the effects of regulatory constraints on Canadian banks.
From The Canadian Banking Fallacy article:
“Despite supposedly tougher regulation and similar leverage limits on paper, Canadian banks were actually significantly more leveraged – and therefore more risky – than well-run American commercial banks. For example JP Morgan was 13 times leveraged at the end of 2008, and Wells Fargo was 11 times leveraged. Canada’s five largest banks averaged 19 times leveraged, with the largest bank, Royal Bank of Canada, 23 times leveraged. It is a similar story for tier one capital (with a higher number being safer): JP Morgan had 10.9% percent at end 2008 while Royal Bank of Canada had just 9% percent. JP Morgan and other US banks also typically had more tangible common equity – another measure of the buffer against losses – than did Canadian Banks. ”
A January report from McKinsey Global Institute shows that, based on assets to equity ratio Canadian banks are not in great shape. In fact, globally they are the third worst after Switzerland and Japan.
Before the financial crisis, Canadian banks ranked 4th in terms of leverage ratio.
Source: Debt and Deleveraging: The global credit bubble and its economic consequences, McKinsey Global Institute
The five Canadian banks trading in the US markets are Royal Bank of Canada(RY), Toronto-Dominion Bank (TD), Bank of Montreal(BMO), Bank of Novo Scotia (BNS) and Canadian Imperial Bank of Commerce (CM).
The Complete List of Canadian Stocks Traded in NASDAQ
Among the foreign stocks listed in the U.S. markets, Canada tops the list with the highest number of listings. Hence US investors have the option to invest directly in many Canadian companies individually as opposed to investing in a bunch of companies via the iShares Canada ETF (EWC).
The following is a list of Canadian companies listed in the NASDAQ market:
| S.No. | Name | Ticker |
|---|---|---|
| 1 | AEterna Zentaris Inc. | AEZS |
| 2 | Altair Nanotechnologies Inc. | ALTI |
| 3 | Angiotech Pharmaceuticals Inc. | ANPI |
| 4 | Ballard Power Systems Inc. | BLDP |
| 5 | Canadian Solar Inc. | CSIQ |
| 6 | Cardiome Pharma Corporation | CRME |
| 7 | CE Franklin Ltd. | CFK |
| 8 | Copernic Inc. | CNIC |
| 9 | Corel Corporation | CREL |
| 10 | Descartes Systems Group Inc | DSGX |
| 11 | Dragonwave Inc | DRWI |
| 12 | Envoy Capital Group Inc. | ECGI |
| 13 | EXFO Electro-Optical Engineering | EXFO |
| 14 | FirstService Corporation | FSRV |
| 15 | Forbes Medi-Tech Inc. | FMTI |
| 16 | GLG Life Tech Corp | GLGL |
| 17 | GSI Group Inc. | GSIG |
| 18 | Hydrogenics Corporation | HYGS |
| 19 | Imax Corporation | IMAX |
| 20 | Intellipharmaceutics International Inc. | IPCI |
| 21 | Ivanhoe Energy Inc. | IVAN |
| 22 | Jewett-Cameron Trading Company | JCTCF |
| 23 | Labopharm Inc. | DDSS |
| 24 | Leading Brands Inc | LBIX |
| 25 | LML Payment Systems Inc. | LMLP |
| 26 | MDC Partners Inc. | MDCA |
| 27 | Methanex Corporation | MEOH |
| 28 | Neptune Technologies & Bioresources Inc | NEPT |
| 29 | NGAS Resources Inc. | NGAS |
| 30 | Nicholas Financial Inc. | NICK |
| 31 | NUCRYST Pharmaceuticals Corp. | NCST |
| 32 | Nymox Pharmaceutical Corporation | NYMX |
| 33 | Oncolytics Biotech Inc. | ONCY |
| 34 | Open Text Corporation | OTEX |
| 35 | Optimal Group Inc. | OPMR |
| 36 | Pan American Silver Corp. | PAAS |
| 37 | QLT Inc. | QLTI |
| 38 | QSound Labs Inc. | QSND |
| 39 | Research in Motion Limited | RIMM |
| 40 | Sierra Wireless Inc. | SWIR |
| 41 | Silver Standard Resources Inc | SSRI |
| 42 | SunOpta Inc. | STKL |
| 43 | SXC Health Solutions Corp. | SXCI |
| 44 | Tesco Corporation | TESO |
| 45 | TLC Vision Corporation | TLCV |
| 46 | Transglobe Energy Corp | TGA |
| 47 | Transition Therapeutics Inc. | TTHI |
| 48 | Vitran Corporation, Inc. | VTNC |
| 49 | Westport Innovations Inc | WPRT |
| 50 | Workstream Inc. | WSTM |
| 51 | World Heart Corporation | WHRT |
| 52 | Zi Corporation | ZICA |
Many more top Canadian companies like Bank of Montreal(BMO), Encana(ECA), TD Bank (TD), Canadian Pacific(CP) trade on the NYSE. The list of Canadian stocks traded on the NYSE can be found here.
Top Nine Canadian Energy Stocks
The S&P ADR Index, which tracks some of the large foreign companies traded in the U.S. markets, also includes many ordinary Canadian equities. The top nine energy companies of Canada are listed below. Energy trusts are excluded.
1.Cameco Corp. (CCJ)
Sector: Mining - Uranium
Earnings Growth (5 year): 10.21%
2.Canadian Natural Resources Ltd.(CNQ)
Sector: Integrated oil and gas
Earnings Growth (5 year): 13.85%
3.Enbridge Inc (ENB)
Sector: Oil Well Services & Equipment
Earnings Growth (5 year): 13.85%
4.EnCana Corp. (ECA)
Sector: Integrated oil and gas
Earnings Growth (5 year): 23.61%
5.Imperial Oil Ltd. (IMO)
Sector: Integrated oil and gas
Earnings Growth (5 year): 23.41%
6.Nexen Inc (NXY)
Sector: Integrated oil and gas
Earnings Growth (5 year): 28.21%
7.Suncor Energy Inc (SU)
Sector: Integrated oil and gas
Earnings Growth (5 year): 17.41%
8.Talisman Energy (TLM)
Sector: Integrated oil and gas
Earnings Growth (5 year): 33.99%
9. TransCanada Corporation (TRP)
Sector: Oil
Earnings Growth (5 year): 9.72%
Most of the companies noted above are in the oil and natural gas sector. This sector accounts for one of the large export revenue generators for Canada. Most of the oil and gas exports go to USA, its largest trading partner.The U.S. considers Canada to be an important and secure source of crude oil.
Most of the Canadian crude oil is extracted from the tar sands in Alberta. Calgary, Alberta-based Suncor Energy (SU) acquired Petro-Canada,another large integrated oil company in March this year. Petro-Canada operates gas stations under the same name. Imperial oil operates gas stations under the Esso brand.
Last month, the U.S. State Department granted approval for the construction of the US portion of the Enbridge (ENB) Alberta Clipper pipeline. The pipeline will carry crude oil to the U.S. midwest.The pipeline goes from Hardisty,Alberta to Superior,Wisconsin on the U.S. side costs about $3.7B to build. When completed it will transport 450,000 barrels per day with a maximum capacity of 800,000 per day if required.
Most Valuable Brands of Canada 2009
“Branding is about having a unique personality, a point of view and a positioning.”
David Haigh
CEO, Brand Finance plc
The Most Valuable Brands of Canada for 2009 were published by Brand Finance a while ago. The rankings ” represents a point-intime examination of the Canadian ‘brandscape’, including many brands who are ‘getting it right’ - and consequently are playing an increasingly important role on the global stage during these challenging times.”
Royal Bank of Canada is the top brand with an estimated brand value of almost C$5.4 B. RIM’s BlackBerry is Canada’s highly rated brand with a score of AAA-. Canada Post ranks the best among ‘Iconic’ brands. In 2009, 65 companies were included in the most valuable brands list.
The Ten Most Valuable Canadian brands are listed by rank order (ascending):
Royal Bank of Canada (RY)
Related: Royal Bank of Canada Financial Information
Research In Motion (RIMM)
Toronto-Dominion Bank (TD)
Manulife Financial (MFC)
BCE Inc. (BCE)
Bank of Nova Scotia (BNS)
Loblaw Companies Ltd
Bombardier
Bank of Montreal (BMO)
CIBC (CM)
Mining, Oil & Gas and Banking form the top 3 sector by enterprise value in 2008. So its not surprising to see the five large banks in the list above.
To see the complete list of 65 most valuable brands click on the icon below.
Canada’s Financial System: Why Is It Stable In This Crisis?
The IMF Country Report for Canada published today offers some unique perspectives on the reasons for the stability of Canada’s financial system since the credit crunch began. There have no been no failures of financial institutions, no large scale bailout of banks and the financial system did not undergo severe systemic pressures like it did in the US and UK. In this post lets review some of the key points from this report.
1. Sound Supervision and Regulation: Regulators follow some of the best practices with respect to supervision of institutions including the new Basel principles for banking supervision. As a result writedowns by Canadian banks have been much smaller when compared to major-peer countries as shown in the chart below.
2. Strict Capital Requirements: Canadian banks’ Tier 1 Capital Ratio exceeds 7% which is higher than the 4% that required by the Basel Accord.
As of February, 2009 the Tier Ratios of the six large banks are as follows:
3. Leverage ratio: This is limited to just 5% of total capital or up to 20% maximum. US banks on the other hand are allowed up to 33% based on their strength and sophistication.
4. Conservative lending policies: Canadian banks like their customers exhibit low risk tolerance and have very conservative lending policies. Also their domestic retail market is profitable and stable unlike in the US.
5.Conservative Residential Mortgage Markets: In the US, 25% of all mortgages are non-prime and 60% of mortgages are securitized. In Canada these numbers are just 5% and 25% respectively. In addition most of the mortgages in Canada have Loan-To-Value (LTV) ratios of below 80%.
6. Periodic Regulatory Reviews: Since the financial sector is ever-changing with innovations and globalization, the federal authorities in Canada review the financial regulations every 5 years. It is not clear if a similar process exists in the US.
7. Cooperation among regulatory agencies: Officials of the various government agencies such as the Office of the Superintendent of Financial Institutions (OSFI), Finance
Canada, Bank of Canada (BoC), Canada Deposit Insurance Corporation (CDIC), and the Financial Consumer Agency of Canada meet regularly as part of the Financial Institutions Supervisory Committee (FISC) to discuss and exchange regulatory information.In the US, agencies such as the Office of Thrift Supervision (OTS), FDIC, Federal Reserve, etc. usually operate independently of one another. Inter-agency cooperation is non-existent for the most part.
8. Proactive response to financial strains: Federal authorities are proactive when it comes to dealing with financial strains to the system. The 2009 budget contains many provisions to support stability in the financial system.
As a result of the above reasons, all the top five Canadian banks have become strong and powerful among the banks in North America.
For example, the above table shows that Royal Bank of Canada (RY) had a market cap larger than Bank of America (BAC) on April 1, 2009. And all five banks were well ahead of Citibank (C). Citibank used to have a market above $200B only a few years ago. Now if not for the government bailout, the bank would failed. Some experts like Mark Patterson have said that many large US financial giants are technically insolvent.
Overall despite being very close to US in terms of financial and economic linkages, Canadian banks have so far shown remarkable resilience during this crisis.
Source: Canada: 2009 Article IV Consultation—Staff Report; Staff Statement; and Public Information Notice on the Executive Board Discussion, May 2009, IMF
Disclosure: Long all five Canadian Banks listed in the US markets
Royal Bank of Canada Financial Information
