The easiest place to look for dividends are banks and utility companies which people use and pay fees to and fortunately for the companies there are few choices to avoid the fee. For the banks, people need loans to buy homes and cars; for utility it is either gas, oil or electricity to run the home, once they are in it is reasonably difficult to change. The harder aspect is to find the bargains and Craig McGee ran a chart looking at North American diversified banks.

Using the sources Morningstar CPMS and Bloomberg data bases Mr. McGee pick the following criteria:

price to book ratio (P/B)

forward PEG ratio (P/E divided by sustainable growth rate)

dividend yield

3 month consensus earnings estimate revision

Rank   Company                        Ticker           Mkt Cap       P/B      PEG    Dividend         3M EPS

($-Bil)                                    Yield %           Revision %

1. CIBC                                 CM-T          37.36            1.88    0.94      4.76                1.78
2. Citigroup                            C-N           151.37            0.74   1.03      0.40                 0.93
3. National Bk of Can            NA-T            14.17           1.56    0.88      4.84                -1.42
4. Bank of Montreal              BMO-T          45.10           1.27    1.44      4.67                 0.64
5. Bank of Nova Scotia         BNS-T           70.17           1.44    1.23      4.82                -0.49
6. Bank of America               BAC-N         162.42           0.71    1.59       1.29                0.95
7. TD Bank                            TD-T             95.77            1.55    1.31       3.95                0.42
8. Royal Bank of Can            RY-T            104.34            1.89   1.07       4.36                0.00
9. JP Morgan Chase             JPM-N           225.36          1.04    1.24       2.89                0.00
10. Wells Fargo & Co              WFC-N         262.01           1.56    1.29       2.94                0.11
11. US Bancorp                       USB-N           72.50            1.84    1.13       2.48                0.00
12. Comerica Inc                      CMA-N           7.20              0.96   2.28       2.08               -3.48

Linking to dividend paying stocks, the chart allows for a comparison but note the yields are very attractive for the risk of owning the shares. When share prices go down, for new money going in there is the ability to upgrade to the highest quality for the least risk and given the companies will continue to be profitable to pay their dividends, the share prices will rise accordingly.

There are more questions than answers, till the next time – to raising questions.

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