Top 20 SPscore – Canada

For this week’s content analysis we’re diving into the SPScore tool to identify the top-20 overall companies in the Canadian market, ranked by SPScore, for all sectors and market caps. While this list represents the 20 best SPScores in Canada, we then sorted this top-20 by Economic Performance Index (EPI) to provide the attached table. By doing so, we are prioritizing economic performance (return on capital vs cost of capital), or put otherwise, the creation of shareholder wealth.  Download

One initial takeaway which we find surprising is that within these top-20 Canadian companies, only five are not active constituents of the S&P/TSX Composite Index. However, once sorted by EPI, four of these five (GS, GBT.A, ESL, LGT.B) are ranked in the top-5. Despite lower market caps, all between $500M and $1Bn, these companies merit consideration, particularly given that each has been showing up in many of our filters for the past few months.

Looking at it from a different angle, we’ll point out Intact Financial (IFC), Thomson-Reuters (TRI) and Cogeco Cable (CCA), who are notable for the recent increase in their SPScores. Each one of these three companies is trading at a discount—whether measured by Intrinsic Value (P/IV < 1) or by future growth value (FGV/EV < 0%)—while also offering a dividend yield greater than 1.5%, and a 5-year annualized dividend growth rate above 5%.

* Please note that in the attached table, the 12-month dividend yield (Div % 12M) includes the payment of special dividends, if applicable.