- Begin with the TSX60 stocks.
- Remove any stocks with a dividend of less than 3%. This minimizes the number of stocks I need to analyze.
- Remove any stocks that might have an unsustainable dividend. For this I remove any stock with a payout ratio above 1.2 (equivalent to a coverage of less than 83%). I also remove any former trusts.
- Finally, select the ten stocks with the highest dividends.
The analysis looks like this:
The resulting list is as follows.
- BCE Inc.
- Bank of Montreal
- Canadian Imperial Bank Of Commerce
- Power Corporation of Canada
- National Bank of Canada
- Shaw Communications Inc.
- Bank of Nova Scotia (The)
- Husky Energy Inc.
- Royal Bank of Canada
- TELUS Corporation
Interestingly, four of the companies on the earlier list have fallen off as they no longer have a sustainable payout ratio. These decliners are:
- Manulife Financial Corporation
- Sun Life Financial Inc.
- TransAlta Corporation
- Thomson Reuters Corporation