Not all shares listed on 52-week minimums are worth risking hard-earned money, but these qualitative Canadian shares are different.
Bank of Nova Scotia (TSX: BNS) (NYSE: BNS) and Canadian tire (TSX: CTC.A) have been paying dividends for many years. They continue to pay secure dividends, which are supported by reasonable payout ratios and long-term profit increases. Even during the recession, their dividends remained intact.
Bank of Nova Scotia
Scotiabank shares fell by around 10% last year, which reduced their valuation to around 9.6 times profit, as short-term growth is expected to be lower than usual. However, the valuation is unbelievably cheap for a stable business, which is expected to increase profits by 5-6% per annum in the long run.
Over the past few years, Scotiabank has left many countries and moved around $ 7 billion in capital to increase its scale and market share in key markets in the Pacific Alliance.
Despite the deterrents against leaving some countries, the most international bank in Canada still managed to increase its earnings per share by around 7% per year during this period. The bank believes that greater concentration on key markets will contribute to sustainable profit growth and improve their quality.
Scotiabank has paid dividends every year since it was founded in 1832, and its stable income has allowed it to increase its dividend for 43 over the past 45 years. The discounted shares increased the dividend profitability to an attractive 5%, which is supported by a safe payout ratio of less than 50%.
Canadian Tire's roots date back to 1922. Since then, the seller has become an icon that is very recognizable and easily accessible to people across the country.
Over the years, Canadian Tire has made acquisitions, including Mark & # 39; s (leading retailers for workwear, casual and active clothing) and FGL Sports (the largest sportswear retailer in the country with many standards, including Sport Chek and Sports Experts). He recently acquired the Canadian Party City business to further expand his offer.
The company is known for sharing profits with shareholders. For example, since 2004, Canadian Tire has increased its dividend at an annual growth rate of 16%, despite the dividend being frozen in 2009 during the global financial crisis.
At around 32%, the stock payout ratio is still relatively low for retailers. Therefore, 3.1% Canadian Tire performance is safe and should be able to continue to increase its dividend by approximately 10% per year over the next few years.
The value of shares dropped by about 18% last year, which means that it is listed at a discount of approximately 20% compared to the usual multiple, which was the last sale in 2013.
Just released! 5 TSX "Dirt Cheap" inventory to buy today (free)
The team of Motley Fool Canada experts, which overtook the market, has just published a new FREE report, which revealed 5 "cheap" stocks that can be bought today.
Our team believes these 5 shares are currently undervalued, but more importantly they can potentially make Canadian investors make a fortune quickly.
Don't miss this opportunity! Simply click the link below to download a free copy and discover all 5 of these resources now.
Apply for a free 5-share report!
Stupid associate Kay Ng owns the shares of CANADIAN TIRE CORP LTD CL A NV and Bank of Nova Scotia. Bank of Nova Scotia Is a recommendation Canada Stock Exchange Advisor.