Monday, September 24, 2007

"True" Yield

Leonard Zehr of The Globe and Mail posted the following article:

Going beyond dividend yield
Leonard Zehr, today at 8:50 AM EDT

Take the dividend yield and subtract the three-year compounded annual growth rate of shares outstanding. What you’re left with is “true yield,” which provides a “more comprehensive measure of how firms return capital to shareholders,” contends UBS strategist George Vasic.

By his reckoning, there are only nine stocks in the TSX composite index, with a dividend yield 1.5 per cent, a true yield of 3 per cent, no share dilution over the last three years, five consecutive dividend increases with growth of greater than 10 per cent and a payout ratio of less than 50 per cent.

They are: Methanex Corp., National Bank of Canada, Canadian National Railway Co., Manulife Financial Corp., Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, Sun Life Financial Inc. and Royal Bank of Canada.

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