You know that since I’ve bought this blog almost 2 years ago, I never thought I would like writing about dividend investing so much? To be honest, I used to write more creative stuff over on my main blog, The Financial Blogger. At first, I felt the need to present something more professional and “straight”. I thought that my creativity had to be put on the shelf as dividend investing was darn serious and you should not be fooling around with money.
This is partially true thought. I actually think that both creativity and professionalism can co-exist. Others obviously disagree with me. And I guess this is why I had some reactions when I compared investor profiles with Lords of the Ring Characters or when I pulled out my controversial survey asking Do You Have What it Takes To Be Dividend Investor? So I already know upfront that I won’t be creating any unanimity today again with my idea of publishing a Power Ranking… but that’s okay… as long as I’m having fun doing it 😉
What is the Dividend Stock Power Ranking?
Power rankings are usually seen in sports and this wording is notably used by ESPN (you can see an example here). It’s basically a way to rank something (in my case it will be dividend stocks) through a constantly evolving chart. This is what I’m going to try to do with our Dividend Growth Index. Since there are 24 great dividend stocks picked by 8 bloggers, I thought it could be interesting to rank them during the year. The goal is to position all stocks included in the index from #1 to #24 according to which stocks should outperform the others (stock value + dividend paid).
So here’s my Dividend Stock Power Ranking:
| Company Name | Ticker | Comments |
| __ | __ | __ |
| Intel | INTC-US | A great mix of leadership and profitability, INTC recently announced that they signed an agreement with Lenovo to produce chips for their smartphone. This could be the beginning of their (late) entry into this market |
| __ | __ | __ |
| National Bank | NA-T | National Bank has been growing at a fast rate for several years. It was the first Canadian bank to raise its dividend after 2008 and completed major acquisitions in 2010-2011. |
| __ | __ | __ |
| Chevron | CVX-US | I’m expecting a rising economy in 2012. This is why I think the energy sector, especially the oil sector is going to do well. Since Chevron is a leader in this industry, they will surely continue to grow. |
| __ | __ | __ |
| ConocoPhillips | COP-US | I believe strongly that energy stocks will rise in 2011. Since I’ve been following CVX for more than a year, I put them in front of COP but I could be wrong too. One thing is for sure (in my mind anyways) is that both COP & CVX will have a great year. |
| __ | __ | __ |
| Husky Energy | HSE-T | As I metioned in CVX comments, I think the energy sector will do well in 2012. HSE is well established in Canada and I’m sure they will jump based on better margin on the oil barrel. |
| __ | __ | __ |
| McDonald’s | MCD-US | I think MDC will benefits from its omnipresence in all markets. While US consumers are going back to spending, emerging markets can’t have enough of those so popular MD’s fries… |
| __ | __ | __ |
| Philip Moris International | PM-US | I’m not a big fan of tobacco companies in terms of ethics. However, when it comes down to rating stocks for profit, I think that PM will do well in 2012. |
| __ | __ | __ |
| Procter & Gamble | PG-US | There is nothing like a strong, cash rich, diversified stock in your portfolio. PG is the perfect example of a company that can succeed in all kinds of situations. |
| __ | __ | __ |
| Royal Bank | RY-T | The biggest Canadian Bank will do well in 2012 and will benefit from its leader position to set the tone on the market. |
| __ | __ | __ |
| Coca-Cola | KO-US | KO is more a defensive stock while its dividend will keep increasing. I’m expecting less growth for KO than some other stocks mentioned in this list but if we hit more concerns on the stock market, it will be a great shelter. |
| __ | __ | __ |
| PepsiCo | PEP-US | A strong diversification and a strong dividend payer. I put them right beside KO as both companies will be great defensive stocks if we ever hit an economic slow down. |
| __ | __ | __ |
| ScotiaBank | BNS-T | BNS has decided to not increase their dividend and keep their money for expansion projects. While I like getting dividend raises, I’m curious to see where this liquidity can lead them. |
| __ | __ | __ |
| Wal-Mart | WMT-US | With a continuously rising EPS and an economy forcing people to search for deals, I think Wal-Mart is going to do well in 2012. |
| __ | __ | __ |
| Staples | SPLS-Q | The combination of low debt and a low dividend payout ratio leaves a lot of room for SPLS to increase its dividend while growing their sales. The game will be in the margin management in 2012. |
| __ | __ | __ |
| Enterprise Product Partners | EPD-US | Another oil related company! Definitely, if this industry doesn’t do well in 2012, my power ranking won’t win any awards! EPD is a solid dividend payer and I expect another dividend increase this year. |
| __ | __ | __ |
| Abbott Labs | ABT-US | ABT has recently declared its 352nd consecutive dividend payment during the last quarter. This company is solid as a rock and will reward investors for their trust. |
| __ | __ | __ |
| Canadian National Railway | CNR-T | One of the best railway companies in North America, CNR is even part of Warren Buffett’s portfolio. If CNR was to raise its dividend in 2012, it would gain a few positions in my ranking! |
| __ | __ | __ |
| Canadian National Resources | CNQ-T | It’s low dividend yield earns CNQ a lower ranking. While it should do well because the Canadian energy sector should come back life after a depressing year in 2011, I prefer stocks that pay dividends. |
| __ | __ | __ |
| Progressive Waste Solutions | BIN-T | Waste management is definitely an interesting sector for the future. Recession or not, we will need companies to take care of our waste. |
| __ | __ | __ |
| Novartis | NVS-US | Novartis faces a 2012 patent expiration of a leading drug, Diovan. While this is common business for health care companies (patent management), I don’t like this kind of incertainty very much. |
| __ | __ | __ |
| Energy Transfer Equity | ETE-US | News for the partnership was good: unitholders overwhelmingly approved the merger with SUG, and Energy Transfer Partners issued new units, which is usually a good thing for an MLP, especially for the General Partner. |
| __ | __ | __ |
| Aflac | AFL-US | Hum… a company involved in life and health insurance…. To be honest I don’t like insurance companies at the moment. I’m a bit scared of another balance sheet scandal. |
| __ | __ | __ |
| CML Healthcare | CLC-T | There was a lot of drama around CML in 2011 and this is why I put them in the last position for now. I’m not convinced that the saga is over yet since they had to go from an income trust structure to a regular company in 2011. |
| __ | __ | __ |
| Fortis | FTS-T | Fortis is eyeing expansion in the US. You never know how it might turn out…. I don’t know much about the company and this is why its ranking is so low at the moment! |
| __ | __ | __ |
Think it’s a great idea? Don’t tell me, tell my friend Intelligent Speculator who did a Techno Stocks Power Ranking ;-). Would you have ranked those stocks in this order? What’s your take on my #1 spot?
You might want to go back and take a look at your post, since this is how I see it (I don’t see any rankings):
So here’s my Dividend Stock Power Ranking:
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Think it’s a great idea?
Yeah… sorry for the technical difficulties. I did in a excel table and tried to upload it… didn’t work (probably because of the amount of text in the last column).
at least the ranking is there now 😉
thx!
Mike.
Interesting list. Thanks. Fortis is one of my favorite dividend stocks. It’s a great electric utility company that has been raising its dividend for the last 20 years. It has 5 stars under the Dividend Allstar ranking, and pays a decent 3.5%. It’s payout ratio is 68.00%, which is normal for this type of company. Plus, its 5 year dividend growth rate is 11.92% (not bad!). it also has a DRIP. Total return for the last 3 years is 54.43%.
I would rank it in the top ten. My opinion only. 🙂
I’m bullish on oil rising over $100/barrel this year. Energy companies that have large oil holdings (like husky) should be poised to have a good year. Although, I’m biased since I work in the industry!
Great list!! I agree with a lot of the companies you mentioned, and the others I just have never researched their company enough to know about. But all in all, I like these investments. I just praise the soft drink companies (PEP & KO) should be much higher on the list 🙂
Hey Michel,
I’ll take a closer look at Fortis later on, you’ve picked my curiosity 😉
That is good news for Intel. One of the biggest concerns with the company was that they would miss the mobile computing revolution. Now it looks like they at least can get in the fray.