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Celestica Inc. (CLS)
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TerraVest Industries Inc. (TVK)
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Hammond Power Solutions Inc. Class A Subordinate Voting Shares (HPS.A)
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Lumine Group Inc. (LMN)
Q: Many years ago I heard Peter say on BNN that one of the best indicators that a stock will outperform the index is when a company initiates a dividend for the first time. Are there any good quality Canadian growth companies that currently do not pay a dividend that you feel are reasonable candidates to start paying a dividend in the next 12 - 18 months?
On the same topic, generally speaking, what would be some of your favourite small to mid cap Canadian growth stocks that do not pay a dividend? Say under a $10B market cap.
On the same topic, generally speaking, what would be some of your favourite small to mid cap Canadian growth stocks that do not pay a dividend? Say under a $10B market cap.
5i Research Answer:
Dividend initiation is certainly a positive signal as the company starts returning some of the profit to shareholders. But it is quite hard to predict such events with a high degree of confidence. We also like companies that continues to pay no dividend or very low yield if the internal reinvestment is attractive (like CSU). Here is a list of companies that pay no dividend or low dividend yield (due to the priority for reinvestment) that we like, and the dividend growth is expected to be meaningful and consistent over time like HPS.A, TVK, LMN, CLS. DSG might pay a dividend one day. WELL possibly also.