Last week we took a glance at the big 4 Canadian banks and their current divined yields, so I figured that I would continue on this and take a look at our top 4 financial services / insurance companies. Yesterday we had a little bit of a rally in the Canadian markets, due to some strength in resource stocks, but unfortunately the bear decided to prove its strength and took hold of todays momentum once again. Just like last week I thought I'd take two metrics into consideration for todays chart. The first and most important one, is the Dividend Yield and the second is the Payout Ratio which I feel is a good indication if future dividend increases are feasible. The 4 stocks that we will be looking at today are MFC, SLF, GWO and IAG.
All yields and prices are as of todays close (October 21, 2008).
| Company |
Ticker |
Price |
Yearly Div. |
Div. Yield |
Payout Ratio |
| Manulife Financial Corp. |
MFC |
$27.31 |
$1.04 |
3.81% |
35% |
| Sun Life Financial Inc. |
SLF |
$29.27 |
$1.44 |
4.92% |
36% |
| Great-West Lifeco Inc. |
GWO |
$28.35 |
$1.23 |
4.34% |
35% |
| Industrial Alliance Insurance & Financial Services Inc. |
IAG |
$28.88 |
$0.98 |
3.39% |
28% |
As we can see, SLF and GWO have the highest yields, and virtually the same payout ratio, this means that Sun Life Financial might be your best bet as a dividend based investment right now. Of course, you will have to look into more factors then just the payout ratio and dividend yield. But I hope this gives you a good starting point to look at. Manulife comes in third place with IAG in last. Since IAG has a low payout ratio compared to the others, we might be able to see a greater increase in dividend payouts then the others in years to come. Like I said last week, I don't think the financial crisis is over, so it may not be the best time to buy yet. BUT, having said that, I don't think prices will drop too much further so it could be worthwhile to take Mr. Buffett's advice and start buying up stocks now. I hope that if you need to increase your holdings in this part of your asset allocations, that you consider my findings!
Enjoy the ride!
Bullish Dividends
Full Disclosure: I currently do NOT own shares in any of the banks
Disclaimer: Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.
