Over the last year, our Dividend All-Stars struggled against a series of interest rate increases that put a damper on the returns of many Canadian dividend payers.
Our A-graded stocks gained an average of 10% since last year’s update and the larger group of A-and-B-graded stocks gained 6% on average. By way of comparison, the iShares Canadian Select Dividend exchange traded fund (XDV), which holds 30 of the top yielding stocks in Canada, climbed 5% over the same period.
(The returns above assume dividends are reinvested once a year, when the portfolio turns over. The returns below assume dividends are reinvested when they are received.)
Last year’s Dividend All-Stars fared relatively well. There were a slew of big winners and a few stinkers in the bunch.
The top two performers happened to be B-graded stocks. Suncor Energy climbed to the very top with a 29.9% total return. Genworth MI Canada took the second spot with a 28.2% return.
The next three spots were taken by A-graded bank stocks. The Dividend All-Star portfolio benefited from the Bank of Montreal gaining 25.2%, CIBC advancing 22.9%, and TD Bank climbing 22.8%. The three banks rounded out the list of All-Stars with gains north of 20% this year.
The huge returns were offset somewhat by stinkers that fell by 10% or more. CI Financial reduced its dividend, tumbled 20.8%, and took home the year’s dividend dud award. Linamar gave up 15.6% in a poor showing while Arc Resources fell 10.0%.
Overall, 13 of the 22 stocks we identified as All-Stars last year were profitable, nine gained more than 10%, and five beat the 20% mark. On the other hand, five fell by more than 5%. Many profitable portfolios experience a similar sort of return divergence. The big gains come with a few losers.
Here’s the full breakdown of how the Dividend All-Stars performed over the last year.
|Rank||Company||Total Return||Previous Year's All-Star Grade|
|2||Genworth MI Canada||28.2%||B|
|3||Bank of Montreal||25.2%||A|
|6||National Bank of Canada||19.6%||B|
|9||Sun Life Financial||14.5%||A|
|11||Bank of Nova Scotia||4.9%||B|
|12||Industrial Alliance Insurance||2.1%||B|
|14||Power Corp of Canada||-2.0%||A|
Norm Rothery, CFA, PhD, tweets as @NormanRothery. He may hold some of the securities mentioned in this article.