Stock Talk- Ideas for conservative investors

Five stocks with an attractive dividend.

Ashley Redmond 25 June, 2012 | 1:00PM

 

 

Ashley Redmond: Welcome back to Stock Talk. Melissa, thanks so much for joining me.

Melissa Kahnert: Thanks, Ashley, it's great to be here today.

Redmond: And for this month's edition, we're going to focus on low volatility with high yield. We thought this would be a great idea given the recent market conditions.

Kahnert: Exactly. The stocks that we'll be talking about today are great choices for a conservative investor. Not only are these companies good at weathering different market conditions, but they also have an attractive dividend for investors. In light of the recent economic conditions, these might be a comfortable alternative for investors, who are looking to weather any market turmoil for the next couple of months.

Redmond: Great, and like we were chatting about earlier when markets are more volatile, these stocks - which we promise we are going to reveal - are great ideas for investors who want to ride it out. So, why don't you tell me about the screen that you ran?

Kahnert: Excellent. The screen that we ran runs through our CPMS Canadian stock universe, and takes a few variables into consideration. We're looking for stocks with lower price volatility. We're also looking for stocks with expected payout ratios under 100%. We also are looking for some positive movement in any of the median cash flow estimates over the past 90 days, and finally on top of all the variables we've considered we've added a diversification element with a maximum of five stocks per industry sector to all of our results.

Redmond: Great. Just a reminder, CPMS is Morningstar's quantitative equity research service utilized by fund managers across the country. So, Melissa, I'm sure everyone watching at home and at the office would like to know what were the top 5 stocks?

Kahnert: Absolutely, the top 5 stocks in our ranking were Bell Aliant; Cominar REIT; Dundee REIT, Pembina Pipeline Corporation; Calloway REIT.

Redmond: There's a lot of big names here.

Kahnert: There definitely are, we can also notice that there are a few real estate investment trust, pipeline and utility companies in this list; while there are never any guarantees, companies that are decently positioned to weather all market conditions are considered defensive in nature and are usually a great bet for a conservative investor.

Redmond: Great. Thanks so much, Melissa. Just a reminder, Melissa is not providing financial advice. We encourage you to speak with a financial advisor or do your own research before selecting stocks. CPMS software is only available to institutional clients and investment advisors. However, you can find free stock quotes at the top of Morningstar.ca.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Cominar Real Estate Investment Trust15.12 CAD-0.72
Dream Office Real Estate Investment Trust A36.24 CAD1.74
Pembina Pipeline Corp53.10 CAD-0.23
SmartCentres Real Estate Investment Trust31.48 CAD0.80

About Author

Ashley Redmond

Ashley Redmond  Ashley Redmond is a Vancouver-based freelance writer.