Top Canadian stocks and their total returns - MoneySense

Top Canadian stocks and their total returns

Here’s what our All-Star returns would look like with reinvested dividends


This year’s Top 200 Canadian Stocks and Top 500 American Stocks are due to arrive in the next issue of MoneySense magazine. They’ll also appear on, which will be the home of all of the magazine’s content in the new year.

The returns generated by the All-Star stocks have been very pleasing in recent years. But, for historical reasons, we’ve reported their capital gains rather than their total returns. That is, the reported returns of the All-Star portfolios have not included dividends.

Mark Brown, our investing editor, wondered what the figures would look like with reinvested dividends. He spent some time going through the data to figure it out. (I filled in a few holes along the way.)

But, before discussing the results, it is important to be aware that the total returns have not been finalized. They may well change slightly as we go through the data with a fine-toothed comb. In addition, we’ve only worked through the last five years worth of numbers so far.

Starting on the Canadian side of the ledger, the Top 200 All-Stars gained an average of 16.3% per year over the last five years. By way of comparison, the S&P/TSX Composite gained 7.7% annually over the same period.

We also looked at the performance of the top value and top growth lists. The stocks that got As for value gained an average of 9.3% annually over the last five years while those that got As for growth gained 18.7% annually. Both handily beat the index.

Turning to the U.S., the Top 500 All-Stars gained an average of 18.5% annually over the last five years while the S&P 500 trailed with an annual advance of 14.5%, in U.S. dollar terms.

The U.S. stocks that got As for value gained an average of 14.3% annually and slightly trailed the market over the last five years. Those that got As for growth gained 16.3% annually and beat the market over the same period. Again both are in U.S. dollar terms.

(All of the returns mentioned above include reinvested dividends. They also assume an equal dollar amount of each stock was purchased, held for roughly a year between data collection periods, sold, and the proceeds rolled into the new crop of top stocks.)

The last few years haven’t been great for value investors and our results reflected that unfortunate trend. But we’ve generally done quite well and hope that value will start pulling its weight in the future.

We’ll have more to say on the topic as we delve further into the numbers. Until then, be sure to check out the new All-Star stocks in the next magazine and online at

Safer Canadian Dogs

Investors following the Dogs of the Dow strategy want to buy the 10 highest yielding stocks in the Dow Jones Industrial Average (DJIA), hold them for a year, and then move into the new list of top yielders.

The Dogs of the TSX works the same way but swaps the DJIA for the S&P/TSX 60, which contains 60 of the largest stocks in Canada.

My safer variant of the Dogs of the TSX tracks the 10 stocks in the index with the highest dividend yields provided they also pass a series of safety tests, such as having positive earnings. The idea is to weed out companies that might cut their dividends in the near term. Just be warned, it’s a task that’s easier said than done.

Here’s the updated Safer Dogs of the TSX, representing the top yielders as of November 11. The list is a good starting point for those who want to put some money to work this week. Just keep in mind, the idea is to hold the stocks for at least a year after purchase – barring some calamity.

Name Price P/B P/E Earnings Yield Dividend Yield
BCE (BCE) $57.45 4.02 18.18 5.50% 4.75%
CIBC (CM) $102.00 1.87 9.87 10.13% 4.75%
Emera (EMA) $44.60 1.65 17.96 5.57% 4.69%
National Bank (NA) $47.71 1.68 13.71 7.29% 4.61%
TELUS (T) $41.70 2.98 17.59 5.68% 4.60%
Power (POW) $29.49 1.08 14.69 6.81% 4.54%
Shaw (SJRB) $26.10 2.11 10.44 9.58% 4.54%
Bank of Nova Scotia (BNS) $71.03 1.69 12.48 8.01% 4.17%
Bank of Montreal (BMO) $86.06 1.48 12.75 7.84% 4.00%
Fortis (FTS) $40.52 1.44 21.55 4.64% 3.95%

Source: Bloomberg, November 11, 2016

Price: Closing price per share

P/B: Price to Book Value Ratio

P/E: Price to Earnings Ratio

Earnings Yield: Earnings divided by Price, expressed as a percentage

Dividend Yield: Expected-Annual-Dividend divided by Price, expressed as a percentage

As always, do your due diligence before buying any stock, including those featured here. Make sure its situation hasn’t changed in some important way, read the latest press releases and regulatory filings and take special care with stocks that trade infrequently. Remember, stocks can be risky. So, be careful out there. (Norm may own shares of some, or all, of the stocks mentioned here.)