Lists & Rankings

The dogs of the TSX

Stocks to buy up, relinquish for a profit and repeat.


Methodology: The Dogs of the TSX is a play on the Dogs of the Dow, a popular investing strategy wherein you buy the 10 stocks with the highest dividend yield on the Dow Jones industrial index, then sell them a year later and begin the process anew. Our variation features the 10 stocks with the highest yields on the S&P/TSX 60 Index.

Why you should care: The idea is to take advantage of a high yield while also grabbing at a good chance to later sell for a profit. That’s because a stock with a high dividend percentage is working hard to attract investors, which may indicate it’s undervalued.

Worth noting: Six of these 10 companies are returning for at least a second year. Stocks on this list have been ahead of the pack the past few years, with 2009’s group outperforming the S&P/TSX composite by an average of 10%, and last year’s contingent bettering the composite by 15.4%. But you’re always well advised to research any company screened through a single factor (in this case, dividends). It may be on the Dogs list because it’s lost the market’s confidence for a good reason. Take Yellow Media, owner of the Yellow Pages directories. The company is paying an enormous 11.9% yield as it works to build its digital business and reduce debt to retain its investment-grade rating. Analysts are split over whether this dog is dying or warming up for a new fight