Top 10 Canadian Dividend Stocks

Posted by on

The Dow Jones Canada Select Dividend Index represents 30 of the top dividend stocks in Canada. These stocks are selected to the index annually based on yield.

The index is up 29.04% year-to-date as of July 31,2009 with dividends reinvested. Last year the index was down about 31%.The 10-year annualized return is 10.62%. One of the interesting features of this DJ Canada Select Dividend Index is that about 73% of the index is made up of financials.Telecom, utilities and energy form about 7% each.

The Top 10 Components in the Index are:
National Bank of Canada
Bank of Montreal (BMO)
Canadian Imperial Bank of Commerce (CM)
Toronto-Dominion Bank (TD)
IGM Financial Inc.
Bank of Nova Scotia (BNS)
Royal Bank of Canada (RY)
Manitoba Telecom Services Inc.
TMX Group Inc.
Sun Life Financial Inc (SLF)

The only utility in the above list is telecom provider Manitoba Telecom Services Inc whose stock does not trade in the US markets. Among the financials all the large banks are in the list with one life insurance company. SunLife Financial (SLF) has a dividend of 4.43%.The five largest Canadian banks weathered the credit crisis well and have shown their strength with a strong rebound since the March lows. Their dividends range from 3.69% to 5.62%. One of the biggest advantage with holding the Canadian bank stocks is that due to strict regulation and highly conservative business practices, they produce consistent profits year after year. Some even call these banks the “cash cows” of Canadian stocks due to their dividend payments.

Another point is that these banks and insurance companies such as Manulife, Sun Life, etc. are in many of the mutual fund portfolios held by Canadian thru their 401-K equivalent for retirement savings called the RRSP account.

While its true that these banks took some unwanted risk thru the use of derivatives in recent years they have written most of the losses.Unlike the US, the housing market in Canada is relatively holding up well and consumer debts such as credit card debt is not a huge problem due to strict underwriting standards. None of the banks in Canada are in serious risk of collapse like some of the large US banks.

Disclosure: Long all five banks

Knowledge is Power: Sensex and Shanghai Indices Correlation Edition

Posted by on

Sensex and Shanghai index show high positive correlation. The movements of Sensex and the Shanghai Composite Index show a high positive correlation at 0.9 in 2008 and 2009. This linear relationship appears to have strengthened in the decline since January 2008.Chinese curse on Indian shares

China-India-markets

Shares in five Nigerian banks, which were bailed out by the government last week, have been suspended.  Shares suspended in Nigeria banks

Fidelity’s John Ford says the prospects for further recovery have not been adequately priced into Asian equities.More buying opportunities of Asian shares over next 18 months

China received 5.36 billion U.S. dollars of foreign direct investment (FDI) in July, down 35.7 percent year on year, said Ministry of Commerce spokesman Yao Jian on Monday.China’s FDI falls 35.7% in July

After going into a tailspin for a year, the German economy is experiencing slight growth once again. But experts are divided over whether it is merely a temporary respite or a sign of genuine recovery.Is the Recession Really Over?

Despite the Bank of Canada’s most recent economic forecast that the current recession is over, diminished..Commercial real estate activity remains down: CBRE

Top Performing Asian and Latin American ADRs

Posted by on

As of July 31,2009 the S&P; 500 Index and the Dow Jones Composite Index are up 10.97% and 2.47% respectively . But many of the ADR indices are gone up much higher. The Year-To-Date (YTD) performance of some of ADR indices are as follows:

BNY Mellon ADR Index: 21.44%
BNY Mellon Asia ADR Index: 27.54%
BNY Mellon Dev Mkts ADR Index: 16.65%
BNY Mellon Emg Mkts ADR Index: 43.22%
BNY Mellon Europe ADR Index: 15.59%
BNY Mellon Lat. Amer. ADR Index: 53.96%

So far this year, the developed markets are lagging the performance of emerging markets.

The Top Performing Latin American ADRs for the Month of July are listed below:

Gafisa S.A.(GFA) – Up 55.21%
Gruma S.A.B. de C.V. (GMK) – Up 44.50%
Votorantim Celulose e Papel S.A. (VCP) – Up 39.50%
Nortel Inversora S.A. (NTL) – Up 36.42%
Aracruz Celulose S.A. (ARA) – Up 34.50%
GOL Linhas Aereas Inteligentes S.A. (GOL) – Up 30.69%
TIM Participacoes S.A. (TIM) – Up 26.33%
Desarrolladora Homex S.A.B. de C.V.(HXM) -Up 26.32%
Telemig Celular Participacoes S.A.(TMB)- Up 22.18%
Companhia Brasileira de Distribuicao(CBD) – Up 21.68%

The Top Performing Asian ADRs for the Month of July are listed below:

Woori Finance Holdings Co. Ltd.(WF) – Up 45.21%
Internet Initiative Japan Inc. (IIJI) – Up 43.49%
China Eastern Airlines Corp. Ltd. (CEA) – Up 43.02%
WNS (Holdings) Ltd. (WNS) – Up 41.67%
Patni Computer Systems Ltd. (PTI) – Up 39.14%
SINOPEC Shanghai Petrochemical Co. Ltd. (SHI) – Up 32.72%
Shinhan Financial Group Co. Ltd. (SHG) – Up 32.36%
CNinsure Inc. (CISG) – Up 31.39%
KB Financial Group Inc. (KB) – Up 28.82%
China Southern Airlines Co. Ltd. (ZNH) – Up 27.18%

Note: ADRs under $5 per share are not included in the list above.

Many of the top performers for July have also performed very well year-to-date. For example Korean Bank Kookmin is up 62.90% YTD. Last month alone KB went up 28.82%. The above picks can be starting point for investors looking to gain exposure to the Latin American and Asian markets. However many of the emerging markets have soared already this year. The main indices of China and India may experience pullbacks as some folks consider them to be over-priced relative to earnings and growth.

FactSheet: Dow Jones STOXX® Select Dividend Indices

Posted by on

Dow Jones and Stoxx publish many stock indices. One such index is the Dow Jones STOXX® Select Dividend Indices which comprises of the following indices:

Dow Jones STOXX® Global Select Dividend 100 Index
Dow Jones STOXX® Americas Select Dividend 40 Index
Dow Jones STOXX® Select Dividend 30 Index
Dow Jones STOXX® Asia/Pacific Select Dividend 30 Index
Dow Jones EURO STOXX® Select Dividend 30 Index
Dow Jones STOXX® NORDIC Select Dividend 20 Index
Dow Jones STOXX® EU Enlarged Select Dividend 15 Index

The above indices have excellent dividend yields ranging from 3.97% to 6.28% as of June30,2009. For example, the  Dow Jones STOXX® EU Enlarged Select Dividend 15 Index has an yield of 6.28%. These indices can be used to identify top dividend paying stocks. The Global Selec Dividend Index has 10 stocks including BB&T Corp (BBT)  and New York Community Bancorp Inc (NYB). BBT acquired the deposits of Colonial Bank of Alabama which failed on Friday.

To download the complete factsheet click Dow-Jones-STOXX-Select-Dividend-Indices.

For other Dow Jones Select Dividend Indices factsheets, go here.

A Look at the Petroleum Sector of Norway

Posted by on

The Petroleum Sector is the largest industry of Norway. Today there are 60 oil fields in production on the Norwegian Continental Shelf. In 2008, they produced 2.5 Million barrels of crude oil per day. Norway is one of the top oil producing countries in the western world. In 2008, Norway is projected to surpass Canada to become the second largest natural gas producer in the world.

The Norwegian government receives significant revenues in the form of tax revenues from the sector. In 2008, this sector accounted for 34% of the state’s total revenues.  The revenues are allocated to a special fund called the “Government Pension Fund – Global” which had a value of NOK 2275 Billion at the end of last year. (Note: 1 NOK = 0.1644 US$ on August 15,2009)

Growth of the Government Pension Fund – Global

Government Pension Fund – Global

Importance of the Petroleum Sector for Norway (click to enlarge)

Norway-Oil-Sector

The largest oil and natural gas company in Norway is  StatOilHydro (STO) which was formed by the merger of Statoil and Norsk Hydro’s oil and gas operations  in 2007. StatOilHydro has presence in 24 countries and operates 2,300 service stations in Scandinavia, Poland, the Baltic States and Russia. Year-to-Date the stock is up nearly 31%.

5-Year Performance of StatOilHydro (STO):

STO-performance-5-year

Top Countries to which Norway exported its natural gas in 2008:
(click to enlarge)

Norway-Top-Natural-Gas-Exports

Source: Facts 2009, The Norwegian Petroleum
Ministry of Petroleum, Norway