One of the Dividend Indices in the family of Dow Jones Stoxx Dividend Indices is the “Dow Jones STOXX® Americas Select Dividend 40 Index” for the Americas. The objective of this index is “to measure the performance of the highest dividend-paying stocks relative to their home markets”.
Some of the unique features of these STOXX Dividend indices are:
- Stocks are screened by defined historical non-negative dividend-per-share growth rates and dividend to earnings-per-share ratios.
- Index components are weighted by their indicated annual net dividend yield, i.e. the largest dividend-yielding companies have the highest weight in the index.
- Fixed component numbers and cap factors guarantee index diversification
As of June 30,2009 the dividend yield of this index is 3.97%.
In this post, lets take a look at the 12 Canadian components in the Dow Jones STOXX® Americas Select Dividend 40 Index. The Canadian companies represented in this index are:
Bank of Montreal (BMO)
Great-West Lifeco Inc
Power Financial Corp
CIBC Group (CM)
IGM Finanacial Inc
Power Corp. of Canada
Bank of Nova Scotia (BNS)
TD Banking Group (TD)
National Bank of Canada
Royal Bank of Canada (RY)
Transcanada Corp (TRP)
Enbridge Inc (ENB)
Of the twelve companies, the five major banks are included and two energy companies are listed in the US exchanges as inter-listed stocks. All the Canadian banks have weathered the credit crunch well and have rebounded strong from the March lows. The most profitable bank in Canada, Royal Bank (RY) has a 3.86% yield now and has more than doubled form recent lows. The stock is also is a consistent performer over many years. Scotia Bank (BNS) has a significant present in Mexico and the Caribbean. BMO currently pays a 5.18% dividend. TD and Canadian Imperial Bank have also come back strong. The five banks are solid long-term investment plays.
Enbridge Inc (ENB) operates in the crude oil and natural gas industry while TransCanada (TRP) operates pipelines and also in the energy area. TRP has a 4.96% yield. Enbridge recently announced that its on target to achieve 20%+ growth this year and 10%+ thru 2013.
