best 2012 dividend stocks...best 2012 dividend stocks e 2 intro – ‘cause you can’t just...

Disclaimer: This document is not meant to be taken as professional recommendations. I am

not a professional trader and I am not making recommendations. I’ve produced this eBook to

provide additional information on US and Canadian dividend stocks that have shown strong

metrics over the past 5 years. You may forward this eBook to your friends but in no

conditions you are allowed to duplicate or publish this content.

Best 2012 Dividend Stocks Presented by TheDividendGuyBlog.com

2012

Best 2012 Dividend Stocks

www.CanadianDividendStock.com www.TheDividendGuyBlog.com www.WhatisDividend.com

Page1

Contents Intro – ‘Cause You Can’t Just Jump In The eBook! .................................................................................................................. 2

US Stocks ................................................................................................................................................................................. 3

Company Name: Avon Products Inc ....................................................................................................................................... 3

Company Name: AT&T ............................................................................................................................................................ 4

Company Name: Black Rock Inc .............................................................................................................................................. 5

Company Name: Chevron Corp .............................................................................................................................................. 6

Company Name: Conoco Phillips ............................................................................................................................................ 7

Company Name: Flowers Food Inc ......................................................................................................................................... 8

Company Name: Garmin Ltd ................................................................................................................................................... 9

Company Name: General Mills Inc ........................................................................................................................................ 10

Company Name: Hasbro Inc ................................................................................................................................................. 11

Company Name: Harris Corp ................................................................................................................................................ 12

Company Name: Intel Corp ................................................................................................................................................... 13

Company Name: Johnson & Johnson ................................................................................................................................... 14

Company Name: Lockheed Martin Corp ............................................................................................................................... 15

Company Name: Microsoft Corp .......................................................................................................................................... 16

Company Name: PepsiCo Inc ................................................................................................................................................ 17

Company Name: RadioShack Corp ....................................................................................................................................... 19

Company Name: Seagate Technology PLC............................................................................................................................ 20

Company Name: Sunoco Logistics Partners LP ..................................................................................................................... 21

Company Name: Wisconsin Energy Corp .............................................................................................................................. 22

Company Name: Waste Management Inc ............................................................................................................................ 23

Canadian Stocks .................................................................................................................................................................... 24

Company Name: BCE ............................................................................................................................................................ 24

Company Name: Corus Entertainment Inc ........................................................................................................................... 25

Company Name: Gamehost Inc ............................................................................................................................................ 26

Company Name: IGM Financials ........................................................................................................................................... 27

Company Name: Leon’s Furniture Ltd .................................................................................................................................. 28

Company Name: Magna International ................................................................................................................................. 29

Company Name: National Bank of Canada ........................................................................................................................... 30

Company Name: Telus Corp .................................................................................................................................................. 31

Company Name: Toronto-Dominion Bank ............................................................................................................................ 32

When is The Right Time To Buy One of Those Stocks? ......................................................................................................... 33

www.CanadianDividendStock.com

http://www.thedividendguyblog.com/

www.WhatisDividend.com



Page2

Intro – ‘Cause You Can’t Just Jump In The eBook!

Dear reader,

If you have this eBook in your possession, this means that you are a subscriber to one of my

newsletter. This is why I want to thank you for your support and loyal readership. My passion for

investing has literally no boundaries and while you are celebrating with your friends and family during

the Holiday Season, I’ve decided to pull out a bunch of companies (20 US and 9 Canadian stocks)

and make this eBook as a gift to you for the New Year.

I currently author several investing websites such as TheDividendGuyBlog.com, WhatisDividend.com and

CanadianDividendStock.com and this is probably where you have heard from this eBook. It doesn’t

make me a professional and I still have a lot of things to learn. This is why this document has to be

taken for what it is and nothing else: a compilation of interesting (and not recommended!) stocks

that have proven strong metrics over the past 5 years. Additional researches and analyses are

required before making any trades.

I’ve separated the book into 2 sections: American Stocks and Canadian Stocks. Therefore, there are

stocks for everybody! I hope you will enjoy the work I’ve put together and please forward this eBook

to anyone interested in investing. I’m sure they will appreciate this attention! Remember that

everything you read here is copyrighted so do not modify or replicate its content.

Best regards,

Mike

The Dividend Guy





http://www.whatisdividend.com/

http://www.canadiandividendstock.com/



Page3

US Stocks

Company Name: Avon Products Inc

Ticker: AVP - NYSE

Profile:

Founded in 1886 by David H. McConnell, Avon is the world’s largest direct cosmetics seller. It has

developed several product lines such as beauty products, fashion and home products. Avon’s original

business model has offered women across the world the opportunity to build their own business. Avon

is selling in more than 100 countries with a 6.5 million women into its sales force.

Strengths:

Avon best competitive advantage relies in its sales force. Since they act as independent

representative, the company doesn’t have to bother with high fixed costs incurred by retail stores.

Avon’s gross margins improvements combined with flexible business model could do wonders in

emerging markets in the upcoming years.

Weaknesses:

The main problem with Avon is also linked to its sales force. Since they act as independent

representatives, keeping them happy and hunting the most knowledgeable sellers is quite a challenge.

While sales have grown over the past 5 years, the profitability and free cash flow have diminished.

The change of CEO in 2011 could help bring back Avon’s profitability level to better days.

Company Metrics:

Dividend Metrics

Current Dividend Yield 5.27

5 year Dividend Growth 5.62


Company Metrics

Sales Growth (1 year) 6.44


Earnings growth 21.18

P/E ratio 9.44

Margins growth 0.4

Payout ratio 63.71

Return on Equity 41.4

Debt to Capital Ratio 0.43






Page4

Company Name: AT&T

Ticker: T - NYSE

Profile:

This eternal rival of Verizon is engaged in an epic battle to dominate the world of

telecommunications. Strong from a fast 3G network and several side operations (such as ip based

market along with Yellow and White Pages publishing), AT&T has proven to be a strong and well

established company. However, the main question is always; can it keep the rhythm and dance to a

rapid evolving beat?

Strengths:

AT&T has a strong base of clients and a solid reputation. It has recently proven its strengths by

offering good quarters since they lost the iPhone exclusivity (VZ is now in the game since early

2011). It’s most recent move (spectrum licenses from Qualcomm, QCOM – NASDAQ), will allow

AT&T to boost its 4G Network across the US and continue its epic fight against VZ.

Weaknesses:

Local & smaller competitors offer great services. Verizon (VZ) is hitting hard by offering similar

offers. AT&T also dropped a costly bid in order to avoid face some legal issue in an antitrust battle

in regards to the acquisition proposal of T-Mobile from Deutsche Telecom (DTEGY – NASDAQ). The

company had entered in a 3 billion break-up fee with Deutsche Telecom. This was definitely a

miscalculation from AT&T.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 12.82

Margins growth 0.48

Payout ratio 52.32








Page5

Company Name: Black Rock Inc

Ticker: BLK - NYSE

Profile:

Black Rock Inc is an investment management firm providing services to both individual and

institutional clients. It has developed a variety of products for cash, fixed income and, ETFs and

mutual fund investments. It is clearly dependent on the bond and stock markets evolution and its

client appetite for risk.

Strengths:

The urgent need for financial advices due to high volatility on the market may benefits to Black Rock.

The popularity of its ETFs (iShares) puts them in a strong position on the market. In September

2011, they have requested the authorization from the SEC to launch 13 actively manage ETFs which

do not have to disclose their daily holdings. This would be a great competition to mutual funds

(which don’t have to disclose their daily holdings).

Weaknesses:

One big challenge for Black Rock is the completion of the integration of Barclays Global Investors.

After a honeymoon period, Laurence Fink, BLK CEO, declared they “experienced some significant

merger-related outflow in the quarter”. Market volatility will also be a concern for 2012.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 14.61

Margins growth N/A

Payout ratio 37.62








Page6

Company Name: Chevron Corp

Ticker: CVX - NYSE

Profile:

Chevron is an integrated energy company operating worldwide including exploration, production,

manufacturing, creating products, transportation. On top of that, Chevron is also diversifying into

chemical production (energy related), mining, Nano science research and (very interesting), Chevron is

a leader in geothermal energy. They seem (and this is why they qualify as a SRI) to be involved in

being a good corporate citizen and respectful of the environment.

Strengths:

As the global economy stands in a relatively slow economy, only the good is to predict in the future.

If economic data were to show some growth, the price of oil would definitely rise and Chevron would

see its benefits going the same way. With a low payout ratio and steady signs of growth, CVX

definitely shows some interest specs.

Weaknesses:

Recent oil spill in Brazil shows, once again, the level of risk in the operation of Chevron and other oil

related companies. Political instability in Nigeria is another factor to consider before the purchase of

CVX.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 8.13

Margins growth 2.64

Payout ratio 29.83








Page7

Company Name: Conoco Phillips

Ticker: COP

Profile:

One of Warren Buffett’s top pick, COP is another integrated energy company operating worldwide,

3rd behind Chevron. COP is the result of a merger between Conoco & Phillips Petroleum in 2001 and

operates in more than 30 countries.

Strengths:

Recently (Dec 2th 2011), COP has announced that they are on track on their 3 years strategic plan

to improve returns. It includes a 10 billion program to repurchase the company’s common stocks. It

is currently showing strong sales growth and a great dividend growth rate over the past 5 years.

Everything to please dividend investors!

Weaknesses:

Its concentration in exploration and production of oil and natural gas could eventually become a

problem. In fact, 81% of its 2010 revenue was coming from this segment. Their recent loss incurred

by the sales of their stake of 20% in Lukoil, a major Russian oil player, shows also the risk of

expansion in emerging market.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 8.99

Margins growth -7.4

Payout ratio 27.95








Page8

Company Name: Flowers Food Inc

Ticker: FLO - NYSE

Profile:

Flowers Food produces and markets bakery products to retail customers in the US. The company top

brands are Nature’s Own, Whitewheat, Tastykake and Mrs. Freshley’s. The company based in Georgia

is one of the largest producers of packaged baked goods in the US.

Strengths:

Flowers Food growth over the past 6 years has been quite impressive considering they evolve in a

mature market. If we forget about last year anemic growth (-1.04%), they show a 5 years double

digit growth rate along with a strong ROE. It will mostly like continue to seek growth through the

acquisition of other bakeries as well as the creation of new products.

Weaknesses:

One of Flowers Food growth is the introduction of new products. However, the extension of their #1

brand, Nature’s Own, in 2010 didn’t meet the expectations as the sales didn’t grow in 2011.

Another concern for food companies are always the recall of contaminated/allergic product as it was

the case for FLO in October for Mrs. Freshley’s Canadian Labeled Cereal Bars. The good news is that

FLO seems to have a good grip on their production process and should be able to limit this risk to a

minimum.

Company Metrics:

Dividend Metrics




Company Metrics

Sales Growth (1 year) -1.04



P/E ratio 18.68

Margins growth -0.86

Payout ratio 51.72








Page9

Company Name: Garmin Ltd

Ticker: GRMN - NASDAQ

Profile:

Garmin develops, manufactures and markets global positioning system (GPS). The company makes GPS

for cars, planes, boats and pedestrians. Garmin sells directly to automakers, airplanes makers and boat

makers as well as mass retailers such as Wal-Mart, Best Buys and Amazon. Interesting fact, the

chairman and CEO of Garmin, Min Kao, owns about 23% of GRMN shares.

Strengths:

Garmin is the leader in the GPS device providers with 47% of the US market. Its ability to enhance

its product (with restaurant finders for example) will help them generate extra revenues in the

future. Its leader position is a great advantage in this market dominated by massive R&D

investments. There is also a lot of room for growth as the overall GPS penetration rates is still very

low.

Weaknesses:

While Garmin shows a dominant position in the US, it faces challenges in extending in Europe with

only 26% of market shares. The biggest danger for Garmin is the level of competition the company

may face in the future. Since GRMN is concentrated in a 1 main product (the GPS), it could face a

very similar fate than RIM when Apple came into the ring. Electronic giants such as Sony, LG, and

Samsung or Techno behemoths such as Apple or Microsoft could also become serious competitors.

Company Metrics:

Dividend Metrics

Current Dividend Yield 4



Company Metrics




P/E ratio 15.38


Payout ratio 51.12


Debt to Capital Ratio 0






Page10

Company Name: General Mills Inc

Ticker: GIS - NYSE

Profile:

General Mills is one of the largest packaged food producers in the world. It owns very popular brands

such as Cheerios, Progresso Soup, Hamburger Helpers, Betty Crocker, Green Giants, Pillsbury and

Fruit Rolls-up. Their products go from flour to bakery to frozen products. They sell to grocery

stores, cafeterias, businesses and restaurants.

Strengths:

In a chaotic economic environment, consumers are thriftier and it’s no surprise that General Mills is

doing well. Since Americans tend to shift their spending habits since 2008, I guess that GIS will

continue to post good financial results. The recent acquisition of Yoplait contributed to their great

2011 results. It provides them with great international presence (43 points out of the international

sales increase of 55% were coming from Yoplait). When the US stock market is going down in 2011,

GIS is showing a strong +13.94% ytd as of December 29th 2011.

Weaknesses:

Rise in the price of goods (thx to the oil industry!) along with increases in marketing expenses could

reduce GIS margins in the upcoming years. But overall, GIS is in the driver seat for 2012.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 16.43

Margins growth 2.38

Payout ratio 40.56








Page11

Company Name: Hasbro Inc

Ticker: HAS - NASDAQ

Profile:

Hasbro is a worldwide leader in children and family entertainment. It is mostly known from their

numerous toy brands such as Playskool, Tonka, Milton Bradley and Parker Brothers. They are the 2nd

largest toy company behind Mattel. They have several trademarked franchises such as Transformers,

Star Wars and Marvel action Heroes.

Strengths:

Hasbro has made some serious moves to please their investors by growing its dividend by 20% during

5 years in a row. They benefits from constant sales from several “classic games” such as Monopoly,

Dungeons & Dragons and battleship. They also focus on the production of popular movie toy related

such as Transformers, Iron Man, Thor and other Marvel Heroes.

Weaknesses:

Unfortunately, nothing is perfect for Hasbro at the moment. The company feels constant pressure on

sales since most kids are moving toward more techno toys such as consoles & iPads. Competition is

also pretty heavy with Mattel since they are established in the same playgrounds.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 11.79


Payout ratio 35.19








Page12

Company Name: Harris Corp

Ticker: HRS - NYSE

Profile:

Harris is providing communications equipment & information technology over 150 countries. They

serve both Governments & commercial sectors. Harris has 3 main segments: RF communications

(encrypted and secure radio communication), Government communication systems & broadcast

communication.

Strengths:

Since governments are not the first ones to make quick moves, when you have them as clients, you

can count on a solid cash cow. This is the case for Harris where roughly 75% of its revenue is coming

from the US Federal Government. HRS is also exploring other avenues through acquisitions in order

to diversify its revenue streams.

Weaknesses:

Having the Government as your main client is not always a good thing. As a matter of fact, we all

know that the Defense budget will be cut in the upcoming years in an effort to reduce global US

debt. This is how Harris could face a decrease in its contracts if it doesn’t seek other opportunities.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 7.88

Margins growth 2.38

Payout ratio 21.6








Page13

Company Name: Intel Corp

Ticker: INTC - NASDAQ

Profile:

Intel (INTC) is the largest designer, manufacturer and seller of “computer chips” in the world. Their

microprocessors are well known and reliable. Their biggest competitor is definitely AMD (Advanced

Micro Devices). INTC is also involved in producing flash memory products, motherboards and

connectivity products. Basically, take a look at your electronic devices at home and you’ll find some of

Intel’s products!

Strengths:

INTC benefits from a leader position in its market and has the biggest budget in R&D in this

industry. This is how it will be able to protect its market shares and evolve through times. Emerging

markets (in urgent need of computers) and the development of smartphones and tablets are new

ways of growth for the company.

Weaknesses:

Over the past 5 years, the apparition of smartphones and tablets in the market created new indirect

competitors to computers. The inability of Intel of position itself as a leader in microprocessors for

these new products is definitely a threat over the long term. Massive R&D investments will be

required to gain those important market shares.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 10.34

Margins growth 1.93

Payout ratio 30.56








Page14

Company Name: Johnson & Johnson

Ticker: JNJ - NYSE

Profile:

Johnson & Johnson is among several dividend stock classics. It is the world’s second largest

manufacturer of health care products. They operate across the world and benefits from a very wide

portfolio of brands such as Band-Aid, Tylenol, Neutrogena, Aveeno, etc. JNJ has 3 main segments:

Consumers, Pharmaceutical and Medical devices and diagnostics.

Strengths:

Strong from a highly diversified product offering coupled with geographical diversification, JNJ is more

diversified than most mutual funds. Since global economy is in turmoil, having a solid stock like this

one in your portfolio will bring more stability. Its steady dividend growth is another reason to seek

for this stock that pays you to wait for better days on the stock market.

Weaknesses:

JNJ biggest challenge (besides its competitor) relies in the quality control of its products.

Unfortunately, they have been hit by many recalls over the past 2 years. The most recent one

happened right before the Holidays with 12 million of Motrin bottles taken off the shelves. Those

recalls don’t only affect revenues but could affect consumers confident toward the brand itself.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 13.47


Payout ratio 43.54








Page15

Company Name: Lockheed Martin Corp

Ticker: LMT

Profile:

Lockheed Martin is engaged in the research, design, manufacture and integration of advanced-

technology products. It operates through 4 segments; Aeronautics, Electronic systems, Information

systems & Global solutions and Space systems. In other words, Lockheed Martin is one of the biggest

defense contractors in the world.

Strengths:

LMT benefits from a leader position while many governments feel the urge to improve their security.

The diversification of its income stream almost equally divided into their 4 segments (29%, 31%,

22%, 18%) offer them 4 different playground to provide defense products. It is also considered one

of the most profitable business by Bloomberg in 2011 (The model assigns a rank to a company after

giving equal weighting to five measures of profitability: return on equity, profit margin, return on

assets, EBITDA margin, and return on invested capital.)

Weaknesses:

We have a similar case to Harris as Lockheed sees over 80% of its revenues coming from the US

government. Therefore, the biggest challenge LMT will face in 2012 will be the election followed by a

new Fed budget.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 8.68

Margins growth 5.48

Payout ratio 36.64








Page16

Company Name: Microsoft Corp

Ticker: MSFT - NASDAQ

Profile:

Microsoft is way more than Windows and Office. It is true that software and business contracts are

responsible of 58% of their revenues but MSFT has other cards in its hand. Server & Tools along

with entertainment departments are still a big part of their revenues. The main power of MSFT lies

in its numerous contracts and licensing agreement that ensures the company will sit on a pile of cash

for several years to come.

Strengths:

Microsoft has well survived the departure of its founder, Bill Gates, a few years ago. Their sales

growth is in the double digits and MSFT is now raising its dividend on a steady basis. They still have

a lot of cash in their bank account and it enables them to seize any upcoming opportunities. The

future success of MSFT will lie in their ability to use their cash cows to produce better products and

services in other niches.

Weaknesses:

The problem is that MSFT is facing behemoths as competitors each time they try to gain market

share in another area. So far, they face off against Google, Rim, Apple, Sony, Nintendo and Oracle

just to name a few.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 9.62


Payout ratio 23.33








Page17

Company Name: PepsiCo Inc

Ticker: PEP - NYSE

Profile:

PepsiCo doesn’t only manufacture, market and sell carbonated and non-carbonated beverages; it is also

a major player in the “snack” industry. In fact, only 37% of its revenue comes from the beverage

industry. Its most popular brands are Pepsi, Gatorade, Tropicana, Quaker Oats & Frito-Lay.

Strengths:

PEP made an innovative turn with Gatorade, Tropicana and Quaker Oats just to name a few.

Recognizing that their “unhealthy” product sales growth may eventually be at risk, they quickly

worked on or acquired healthier brands. Not to mention that on a dividend perspective, PepsiCo has

been increasing its dividend payout for 38 years in a row which makes it part of the prestigious

Dividend Aristocrat List.

Weaknesses:

While Pepsi and Frito-Lay (selling Lays, Doritos, Cheetos, Pretzels and Sun Chips) are not really

synonymous of healthy products, they do represent 54% of its revenue (only counting the divisions in

the USA). As mentioned before their, unhealthy products sales growth may be at risk eventually.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 15.48


Payout ratio 47.92






http://whatisdividend.com/dividend-aristocrats-list/



Page18

Company Name: Procter & Gamble

Ticker: PG - NYSE

Profile:

Procter & Gamble is the world largest producer of household and personal products. The company’s

products are sold in over 180 countries and count on popular brands such as Tide, Pampers, Gillette,

Bounty and Olay. PG is divided into 3 segments: Beauty, Health & Well-Being and Household Care.

Strengths:

Several household products sold across the world; what else do you want? Another interesting PG

strength lies in the nature of its products; they are accessible to anyone and most people will need

to continue buying those products even if we hit a recession. This ensures more stability in sales

overtime while PG continues to see growth with emerging markets.

Weaknesses:

The only shadow in the picture for 2012 is the Pringle deal saga. In mid-December, the SEC had

launched a probe into Diamond Food’s accounting of payments to walnut growers. PG has a deal

pending to purchase Pringles and it expires on June 2012. This investigation could delay the deal and

cause distractions in the meantime.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 16.83


Payout ratio 47.77








Page19

Company Name: RadioShack Corp

Ticker: RSH - NYSE

Profile:

RadioShack is a retailer of electronics and services. Instead of using large stores similar to Best Buys,

RadioShack has privileged a higher number of stores (4,486 in US, Puerto Rico and Mexico). Along

with its RadioShack stores, the company also operates several kiosks. They have 1,267 kiosks located

within Target and Sam’s Club stores.

Strengths:

While the sales are stagnating, RSH has kept increasing its dividend. With a low payout ratio

(12.86%) and a high yield (5.1%), the company will be able to sustain this dividend payout for a

long time. I’ve picked RSH to be part of this eBook because of its low P/E ratio (7.6) and the fact

that Best Buys is struggling to post strong financial results. The company is also repurchasing $200

million of shares in 2012.

Weaknesses:

RadioShack faces a lot of competition from Best Buy and Wal-Mart. Their main source of income is

Because of a high dividend and the fact that RSH lost a lot of value on the market in 2011, this

could be a risky but an interesting pick.

Company Metrics:

Dividend Metrics



1 year Dividend Growth 100

Company Metrics



Earnings growth N/A

P/E ratio 7.6


Payout ratio 12.86








Page20

Company Name: Seagate Technology PLC

Ticker: STX - NASDAQ

Profile:

Seagate Technology is the world’s largest designer, manufacturer and marketer of hard drives. It

provides a wide range of hard drives for both companies and individuals. Seagate deals mainly with

Original Equipment Manufacturers (OEM), distributors and retailers. Their main competitors are

Western Digital and captive manufacturer such as Hitachi, Samsung, Toshiba and Futjitsu.

Strengths:

While feeling pressures from its competitors, Seagate is definitely the leader in the hard drive

industry. While most of its sales are coming from OEM, only HP exceeds 10% of STX sales as an

individual client. STX also updated their revenue guidance for Q3 & Q4 2012 above analysts’

estimates. They seem to be under control after the flood in Thailand that had created a hard disk

shortage (see Intel’s analysis).

Weaknesses:

The Main challenge for STX is how technology will evolve. In fact, technology could evolve fast and

the computer industry could move to something else such as with ScanDisk and its Flash Memory.

While we are not there yet, it will be interesting to see how STX will evolve in the upcoming years.

Company Metrics:

Dividend Metrics



1 year Dividend Growth N/A

Company Metrics




P/E ratio 12.83


Payout ratio 31.77








Page21

Company Name: Sunoco Logistics Partners LP

Ticker: SXL

Profile:

Sunoco Logistics Partners is a limited partnership formed by Sunoco (SUN) to acquire, own and

operate a geographically diverse and complementary portfolio of pipelines, crude oil acquisition and

terminal facilities. The Company operates in three segments: Refined Products Pipeline System,

Terminal Facilities and Crude Oil Pipeline System.

Strengths:

If you want a stable and steady dividend stock, I think you have found something great with SXL. It

shows both steady sales growth and dividend growth over the past 5 years with a more than

reasonable payout ratio. SXL business is more focus on managing the cost of oil transportation and

logistics. Therefore, it’s easier to manage this part of the business than to predict the price of oil.

Weaknesses:

SXL is showing very strong number over the past 5 years and may be the victim of eventually

missing its target. An economic recession could slow down the oil sales and SXL would eventually feel

it in its financial statement too.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 15.3

Margins growth 10.23

Payout ratio 41.37








Page22

Company Name: Wisconsin Energy Corp

Ticker: WEC - NYSE

Profile:

This is with no surprises that Wisconsin Energy is the largest electric and natural gas utility in

Wisconsin! The company operates mainly 2 segments: Utility (1,1M electric customers. Power is

generated via coal & natural gas) and Non-Utility (consists primarily of generating plants

constructed). However, the non-utility segment generates less than 5% of WEC revenues.

Strengths:

I’ve written this several times, but being the leader in its industry matter. Once again, this is the

case with WEC in Wisconsin. WEC’s crystal ball paid off when the company entered into a long term

contract on the price of coal back in 2006. Between 2006 and 2008, the price of coal has doubled.

The demand for energy will not likely reduce in the upcoming years and should remain fairly stable.

Weaknesses:

Since WEC is producing electricity from coal, we can imagine that environmental compliance cost will

be an important challenge in the upcoming years. The rising price of commodities will also put

pressure on WEC margins once the long term contracts expire.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 15.73

Margins growth 1.4

Payout ratio 41.15








Page23

Company Name: Waste Management Inc

Ticker: WM

Profile:

Waste Management is a leader in collection, transportation and recycling solid waste. The company

operates through 5 segments: Collection, Landfill, Transfer, Wheelabrator (waste-to-energy) and

recycling. WM also provides recycling brokerage service through its North America well established

network.

Strengths:

This is no news that recycling and producing energy from waste are big interest as resources are

getting rarer. I think that WM is just in the right business at the right time and benefits from solid

logistics. WM biggest clients are Governments and municipalities. This ensures a great stability in

income overtime.

Weaknesses:

In my opinion, there are 2 challenges around WM. The first one is obviously environmental regulation

that can always be tricky when you play with waste management. The second is the rising cost of

fuel that will affect the biggest waste-collection truck fleet in North America.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 14.95

Margins growth 9.72

Payout ratio 63.38








Page24

Canadian Stocks

Company Name: BCE

Ticker: BCE - TSE

Profile:

BCE is the largest communications company in Canada. The company has recently acquired CTV for 1.3

billion dollars. This acquisition included major subsidiaries such as TSN. BCE also owns 15% of the

Globe and Mail, a 45% stake in the Bell Aliant Regional Communications Income Fund and stakes in

both Montreal Canadiens & Toronto Maple Leafs NHL teams.

Strengths:

As many other stocks picked in this eBook, BCE has a strong position of leader. Bell also has clear

objectives which are Improve Customs Service, Accelerate Wireless, Leverage Wireline Momentum,

Invest in Broadband Networks and Services, and Achieve a Competitive Cost Structure. Bell is

definitely strong enough to continue its growth through the acquisition of market shares in different

communication segment in Canada.

Weaknesses:

BCE is currently losing market shares to Videotron in Quebec and Rogers in Ontario. The battle for

Central Canada is fierce and will require more investment from BCE. While BCE is currently

diversifying its revenue sources, the bulk of its income is coming from Wireline clients.

Company Metrics:

Dividend Metrics


5 year Dividend

Growth 8.16


Company Metrics




P/E ratio 13.19

Payout ratio 62.45








Page25

Company Name: Corus Entertainment Inc

Ticker: CJR.B - TSE

Profile:

Corus is an entertainment company that was originally part of the telecommunications giant Shaw

Communications (SJR.B). It is probably most well-known for offering a variety of speciality

programming channels that include such diverse offerings as the Teletoon cartoon network and the

famous HBO channel. Corus also owns 37 of the most popular radio stations across Canada.

Strengths:

Strong from Shaw’s background, Corus has grown throughout the years with success. Its great

diversification across TV speciality channels and radio stations makes them one of the biggest playing

in Canada (with Astral Media). They are evolving in a relatively mature market with limited

competition. The company has clearly shown their interest in raising their dividend in the past 5

years with a growth rate of 20%.

Weaknesses:

Both TV and radio universes will evolve greatly in the upcoming future due to technological evolution.

It will be interested to see how “traditional” entertainment media Company such as Corus will react

to satellite radio and podcast for example. However, I don’t think it will be a major concern in 2012.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 11.78

Margins growth N/A

Payout ratio 45.32






http://canadiandividendstock.com/shaw-communications-inc-sjrb/



Page26

Company Name: Gamehost Inc

Ticker: GH - TSE

Profile:

Formerly Gamehost Income Fund prior to 2011, Gamehost is engaged in gaming and hotel operations.

The gaming segment includes mostly government-own slot machine, video terminals and lottery ticket

outlets. The company owns 91% of Deerfoot (which operates Deerfoot Inn & Casino). Another

important part of its business is the food and beverage services (25% of 2010 sales) attached to its

casinos & hotel operations.

Strengths:

Gamehost is well established in Alberta where the economy has been booming for the past decades.

GH growth is indirectly driven by the oil sand exploitation. For example, they operate the Boomtown

Casino in Ft. McMurray where many oil sand sites has been developed. Targeting a bored and rich

clientele (people working on oil platform per se), GH will probably continue to grow as the oil sand is

at the center of Canada’s economic development plan.

Weaknesses:

GH success is tightly bound with oil sand exploitation. The arrival of new competitors or additional

environmental legislation could slowdown GH growth in the next few years. The fact that Gamehost

is operating solely in Alberta makes it even more dependable on the oil sand exploitation.

Company Metrics:

Dividend Metrics




Company Metrics



Earnings growth N/A

P/E ratio 14.44


Payout ratio 39.5








Page27

Company Name: IGM Financials

Ticker: IGM

Profile:

IGM Financials is mostly known under the name of Investors Group, the largest mutual fund company

in Canada. The company also manages Mackenzie Investments and belongs partly (57%) to Power

Corporation (POW). Investors Group provides financial planning services along with mutual funds and

insurance services. Through a partnership with National Bank, they also provide regular banking

products and loans to their clients.

Strengths:

IGM is the Canadian leader in mutual funds sales with over $120 billion in total assets under

management. They have successfully built a fence around their clients by offering all banking products

through National Bank back office (coupled with a non-competing clause). During volatile markets,

sounds financial advices are needed by investors and IGM will be there to meet clients’ requests. They

show a positive 5 years sales growth despite a disastrous year in 2008.

Weaknesses:

With the coming of low fees investment such as Vanguards’ products, high MER funds such as IG’s

and Mackenzie will face fierce competition. Their added value through sound financial planning will be

challenged by clients who will require additional reasons to pay over 2% in management fees. New

legislation around leveraged loans (a popular strategy at IG) may also affect mutual funds sales.

Company Metrics:

Dividend Metrics


5 year Dividend

Growth 11.22


Company Metrics




P/E ratio 13.54

Payout ratio 73.99






http://canadiandividendstock.com/power-corp-of-canada-pow/



Page28

Company Name: Leon’s Furniture Ltd

Ticker: LNF

Profile:

Leon’s Furniture is a large Canadian retailer of home furnishings from Alberta to Newfoundland. The

company has developed both company-owned and franchises structures. LNF currently operates 37

stores while having 25 franchisees operating an additional 30 stores. Its main product lines go from

dining room to bedroom along with home theatres and electronics.

Strengths:

Leon’s Furniture has been founded back in 1909 and benefits from a strong brand across Canada. LNF

is also operating in different provinces with different strengths (Alberta vs Quebec for example). It is

showing slow but steady growth years after years. Considering its mature market, LNF is doing

pretty well. I also like the fact that LNF is mostly own by the founder’s family holding 70% of the

shares. You can make sure that they will keep the dividend coming for their own sake.

Weaknesses:

Leon’s business model includes a lot of deferred payment sales which includes a financial structure

behind it. A rise in interest rate (which is possible in Canada) would add pressure on margins. The

recent slowdown in the housing market could possibly affect Leon’s sales as well since most new home

owners are the first ones at the furniture stores.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 15.19

Margins growth 0.01

Payout ratio 35.54


Debt to Capital Ratio 0






Page29

Company Name: Magna International

Ticker: MG - TSE

Profile:

Magna is not only an international automobile part supplier, it also designs, develops, manufactures,

assemble and engineer automobile parts. Magna sales to OEM’s (original equipment manufacturers)

across 26 countries. It offers a wide variety of 86 products that go from seating systems to roofing

systems.

Strengths:

While the automotive industry is not the favorite place to invest your money at the moment, Magna

is able to find a way to seek growth and make profits. The dividend payout ratio is extremely low

(10%) which leaves a lot of room for increase in the upcoming years. Since MG is a leader in its

industry, it benefits from a long list of clients where you can find most (if not all) major auto

constructors.

Weaknesses:

The weakness of this company is currently sitting on the chairman position. Mike Harris recently

receives only a minority of shareholder support (38%) for his re-election as chairman in 2011. This

lack of support is linked to a controversial deal to buy dual-class shares held by Magna Founder, Frank

Stronach. The deal sealed at $865 million (a premium of 1,800% above market value at that

time).

Company Metrics:

Dividend Metrics




Company Metrics



Earnings growth N/A

P/E ratio 8.68

Margins growth 0.98

Payout ratio 10.48








Page30

Company Name: National Bank of Canada

Ticker: NA - TSE

Profile:

National Bank is the 6th biggest bank in Canada. It provides numerous financial services to individual,

commercial and institutional clients. Their service range from regular banking, investment, insurance,

brokerage, mortgages, loans, etc. NA is considered more as a regional bank with a leader position in

the province of Quebec.

Strengths:

In 2010-2011, National Bank made some important acquisition such as the brokerage side of HSBC,

Montrusco Bolton and the complete acquisition of Wellington West. Those moves have been in line to

establish National Bank as a leader in wealth management. It also created their brand Private Wealth

1859 that serves high net worth client only. Through their acquisition and partnership with Power

Corps (IGM, London Life, Great West Life), NA is growing its presence outside Quebec.

Weaknesses:

National Bank Achilles heel is definitely its technological deficiency compared to their other

competitors (the big 5 and Caisses Desjardins). They are currently investing hundreds of million in a

new integrated platform and we should see some releases in 2012. The integration of this new

platform will be a major issue this year.

Company Metrics:

Dividend Metrics




Company Metrics



Earnings growth N/A

P/E ratio 9.99

Margins growth N/A

Payout ratio 38.36








Page31

Company Name: Telus Corp

Ticker: T - TSE

Profile:

Telus offers residential phone, internet, TV and mobile phone services. Back in 2008, Telus also

bought Emergis, a leading electronic healthcare solutions provider and then created Telus health

Solutions. With an aging population, healthcare is definitely a great sector for a telecom. Considering

the number of wireless subscribers, Telus is the 3rd largest provider in Canada. Interesting enough, T

is gets 49% of its revenue from Wireline and 51% from Wireless.

Strengths:

Telus benefits from a solid client base in Western Canada where there is less competition than

Central Canada (Ontario & Quebec). This position enables Telus to concentrate in battling for market

shares in Central markets while it benefits from a “break” in its stronghold. The management team

in place is looking forward to create value for shareholders by increasing T dividend by 10% for the

next 2 years.

Weaknesses:

Telus is battling against strong competitors (BCE, Rogers & Shaw) in a relatively mature market.

This leads to massive investments in R&D as well as a big marketing budget. Both consequences will

reduce margins. Not to mention that Shaw is still looking to steal some market shares in Western

Canada while Telus is eyeing the Central market.

Company Metrics:

Dividend Metrics


5 year Dividend

Growth 12.94


Company Metrics




P/E ratio 15.28

Payout ratio 62.09








Page32

Company Name: Toronto-Dominion Bank

Ticker: TD - TSE

Profile:

Based out of Toronto, Ontario, Canada, TD is becoming an increasingly multi-national. The four main

branches of the company are Canadian Personal and Commercial Banking, Wealth management,

Wholesale Banking (securities), and U.S. Personal and Commercial Banking. TD has about $630 billion

dollar worth of assets. For that reason, TD is now on RBC’s radar as it going for the #1 spot for

the biggest bank in Canada.

Strengths:

On top of being a leader in Canada, TD is also the most productive Canadian Bank (e.g. more earnings

relative to its risk-weighted assets). Its earnings volatility is lower than its peers due to less

exposition to capital markets. Finally, TD has deployed a very lean structure into its branch which

benefits greatly their expansion in Quebec and US. TD Bank it is now known as “America’s Most

Convenient Bank”.

Weaknesses:

While TD is appreciated by most financial analysts, its current value (P/E Ratio near 14) could be

one of the downside of buying this stock now. A sudden raise in the Canadian interest rate could also

contract a part of its banking activity if consumers were to slow down on debts.

Company Metrics:

Dividend Metrics




Company Metrics




P/E ratio 10.95

Margins growth N/A

Payout ratio 40.57








Page33

When is The Right Time To Buy One of Those Stocks?

First things first, I hope that you have enjoyed this eBook and that it has been useful for your stock

research. I’ve tried to hit different industries to make sure that you can find something that fits in

your portfolio. But now that you have found this missing piece of your puzzle; when is the right

time to buy?

There are obviously no magical answers to this question. However, you can use some guidelines to

make sure that you make the move at the right moment. I personally use a free technical analysis

tool I found to help me making my decision. I use INO Trend Analysis each time I am about to buy a

new stock in my portfolio. This allows me to avoid buying stocks that are about to break technical

support. INO is specialized in the futures and options markets and provides several trading tools and

publications. If you haven’t heard of them before, I’d suggest you take their free 10 emails trading

course. Please note that those are affiliate links and I do get paid if you use those FREE services. In

all honesty, I use INO Trend Analysis since it’s free ;-). Oh! And since we are in confidence mode, I

own shares of CVX, INTC, JNJ, NA, & T (Telus).

If you liked this eBook, you’ll like this:

I don’t know where you got that eBook but if you like it, here are few other places where you can

find my work:

www.TheDividendGuyBlog.com (Register to my RSS Feed and Newsletter)

www.CanadianDividendSTock.com (Newsletter)


www.DividendStockAnalysis.com (NEW!)

If you have any comments regarding this eBook or my sites, please send me your email at

[email protected] and don’t forget to forward this eBook to your friends!

Best regards,

Mike

The Dividend Guy




http://www.thedividendguyblog.com/TrendAnalysis

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