11 Canadian Non-Financial Dividend Aristocrats To Consider

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I have written about investment opportunities in Canada many times before.Many others have written on the same topic as well. More recently Seeking Alpha published an excellent piece by Joseph L. Shaefer of Stanford Wealth Management, LLC.

In this post let me list some of the top dividend stocks of Canada. These stocks are part of the S&P/TSX Canadian Dividend Aristocrats Index. Components of the index must satisfy the following criteria:

1.The company’s security is a common stock or income trust listed  on the Toronto Stock Exchange and a constituent of the S&P Canada  Broad Market Index (BMI).
2.The security has increased ordinary cash dividends every year for at least five consecutive years.
3.The float-adjusted market capitalization of the security, at the time of the review, must be at least C$ 300 million.

Some of the Canadian dividend aristocrats trading on the organized U.S. exchanges are listed below with their current dividend yields:

1.Company: TransCanada Corp (TRP)
Current Dividend Yield: 4.06%
Sector:Natural Gas Utilities

2.Company: TELUS Corp (TU)
Current Dividend Yield: 4.33%
Sector: Telecom

3.Company: Shaw Communications Inc (SJR)
Current Dividend Yield: 4.59%
Sector:Broadcasting & Cable TV

4.Company: Enbridge Inc (ENB)
Current Dividend Yield: 3.08%
Sector: Oil Well Services & Equipment

5.Company: Thomson Reuters Corp (TRI)
Current Dividend Yield: 3.09%
Sector:Printing & Publishing

6.Company: Canadian National Railway Co (CNI)
Current Dividend Yield: 1.78%
Sector: Railroads

7.Company: Tim Hortons Inc (THI)
Current Dividend Yield: 1.44
Sector:Restaurants

8.Company: Canadian Pacific Railway Ltd (CP)
Current Dividend Yield: 1.67%
Sector: Railroads

9.Company: Talisman Energy Inc (TLM)
Current Dividend Yield: 1.04%
Sector:Oil & Gas Operations

10.Company: Cameco Corp(CCJ)
Current Dividend Yield:1.39%
Sector:Metal Mining

11.Company: Canadian Natural Resources Ltd (CNQ)
Current Dividend Yield: 0.80%
Sector:Oil & Gas Operations

Note: Yields noted are as of April 28, 2011

Disclosure: Long CNI

The Five Best and Worst Performing Foreign Bank Stocks YTD

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The five best performing foreign bank stocks trading as sponsored ADRs in the organized exchanges and OTC markets are listed below together with their current dividend yields:

1.Bank: Swedbank (SWDBY)
YTD Change: 37.98%
Current Dividend Yield: 1.73%
Country: Sweden

2.Bank: ING Grope (ING)
YTD Change: 33.81%
Current Dividend Yield: N/A
Country: The Netherlands

3.Bank:Banco Bilbao Vizcaya Argentaria, S.A. (BBVA)
YTD Change: 24.48%
Current Dividend Yield: 6.76%
Country:Spain

4.Bank:Intesa Sanpaolo SpA (ISNPY)
YTD Change: 22.69%
Current Dividend Yield: 3.35%
Country: Italy

5.Bank:BNP Paribas (BNPQY)
YTD Change: 21.78%
Current Dividend Yield: 2.36%
Country: France

The five worst performing foreign bank stocks are:

1.Bank: Banco Macro S.A. (BMA)
YTD Change: -27.09%
Current Dividend Yield: 2.43%
Country: Argentina

2.Bank: Creditcop (BAP)
YTD Change: -25.54%
Current Dividend Yield: 2.20%
Country: Peru

3.Bank: Commerzbank AG (CRZBY)
YTD Change: -14.40%
Current Dividend Yield: N/A
Country: Germany

4.Bank:Banco Santander (Brasil) S.A. (BSBR)
YTD Change: -11.40%
Current Dividend Yield: 3.34%
Country: Brazil

5.Bank:BBVA Banco Frances S.A. (BFR)
YTD Change: -11.38%
Current Dividend Yield: 10.81%
Country: Argentina

Note: Data noted above are as of market close April 27, 2011

Disclosure: Long ING, BMA, CRZBY, BBVA, SWDBY

Who Pays More Taxes in the U.S.- Corporations or Individuals?

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The chart below answers the question in the title of this post:

us-corporate-personal-taxes.png

Source: Treasury Bulletin March 2011. U.S. Department of the Treasury

From the report:

Individual income tax receipts, net of refunds, were $256.0 billion for the first quarter of fiscal year 2011. This is an increase of $48.3 billion over the comparable prior year quarter.

Net corporate income tax receipts were $35.9 billion for the first quarter of fiscal year 2011. This is an increase of $2.0 billion compared to the prior year first quarter.

Over the past few decades corporations have paid lower and lower taxes each year while individual income taxes have accounted for a larger portion of the Federal receipts.

Investing in Emerging Markets is a Must

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Emerging markets have not performed well in recent months compared to many developed markets. Investors are concerned about investing in emerging markets due to inflation, political risks and other factors. However according to a report by Josephine Shea of Hartford Investment Management the best days of emerging markets(EM) are in fact ahead of us. He offers the following reasons on why investing in emerging markets is a must:

  • The future growth of U.S. multinationals is in emerging markets and not in the domestic market.
  • Global GDP is expected to grow 4.4% this year with roughly two-thirds driven by EM.
  • According to the IMF, the growth rate for China and U.S. are estimated to be 4.4% and 11.7% per year for 2011-2015.
  • Emerging and developing economies already produce 36.5% of global GDP.In ten years that could be 50% and by 2030, as high as 60%.
  • Foreign Direct Investment (FDI) flows into emerging markets have rebounded since the financial crisis according to a United Nations Conference on Trade and Development (UNCTAD).
  • In just five years, the market capitalization of the Hang Seng Index grew 48%, the Bombay 200 Index 55%, the Shanghai Composite Index 123%, the Brazil Bovespa Index 77% and lastly Russia’s RTS Index 38%, while the market capitalization of the S&P 500 Index has gone up only 2.5%.
  • Large EM corporates have stronger credit rating than their U.S. peers.

Source: Emerging Markets No Longer a Choice; A Must – Hartford Investment Management

Some of the large-cap emerging market giants are Petrochina Co Ltd of China (PTR), Vale SA (VALE) of Brazil, HDFC Bank Ltd (HDB) of India and Gazprom OAO (OGZPY) of Russia. While investing in EM companies directly is one way to profit from their growth another option is to simply invest in U.S. and European multinationals who have a strong presence in developing countries. Examples of such western multinationals include Nestle (NSRGY), Caterpillar Inc(CAT), Unilever (UN, UL), Coca Cola (KO), etc. A list of the top 25 U.S. and European multinationals with high exposure to emerging markets can be found here and here.

Disclosure: No positions

Brazil’s Trade With China Soars

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One of the factors that investors need to consider when selecting an emerging market for investment is the country’s trade with other emerging markets. Countries such as China that depend heavily on exports to the developed world will not fare better should the developed countries experience another downturn again. Emerging market countries that depend on exports to other emerging countries offer better investment options. Brazil matches the profile of such an emerging country.

Brazil’s trade with China from 1999 to 2010 is shown in the chart below:

Click to enlarge

brazil-china-trade.jpg

Source: CEIC Data

From CEIC Brazil Data Talk Report:

The total trade between Brazil and China has expanded aggressively during the past 12 years. Brazil’s exports to China grew by a Compound Annual Growth Rate (CAGR) of 46.9% annually while imports from China grew by a CAGR of 37.8% annually from 1999 to 2010. The growth rates are high compared to its aggregate exports and imports which saw a CAGR of 12.7% and 11.5% respectively.

The growth in Brazil’s exports to China are largely commodities based, led by iron ore, soybeans and crude oil. Total exports of iron ore amounted to USD13.34 billion in 2010, representing 43% of Brazil’s exports to China. At the same time, soybeans and crude oil combined exports constituted USD11.19 billion or 36.34% of Brazil’s exports to China. These commodities have been displayed an upward export trend since 1999, coinciding with China’s increasing demand for commodities and fuel sources, as China broaden its net beyond its established suppliers in Asia and the Middle East.

Brazilian companies operating in the industrial metals and mining sector are listed below with their tickers:

  • MMX Mineracao e Metalicos (MXHMY)
  • Gerdau (GGB)
  • Companhia Siderurgica Nacional (SID)
  • Paranapanema (PNPPY)
  • Usiminas (USDMY)
  • Vale (VALE)

Three of the Brazilian oil companies include:

  • Petrobras (PBR)
  • OSX Brasil  (OSXRY)
  • OGX PETROLEO E GAS PARTICIPACOES (OGXPY)

The iShares MSCI Brazil ETF (EWZ) offers a simple and easy way to gain exposure to the Brazilian market.

Disclosure: Long PBR