Dividend Stocks With Room To Grow

Big-yield stocks are nice, but only if the payouts are sustainable. Today’s screen seeks not only companies with attractive dividends and healthy payout ratios, but also with momentum and a realistic chance of growth ahead. In crunching today’s numbers, Sudip Ghosh, senior consultant at Morningstar CPMS, used return on equity (ROE) and analyst revisions over the past three months to get a read on each companies’ chances of good growth and momentum.

Industrial Alliance Insurance and Financial Services Inc. ranks as the top company in terms of combined dividend yield and growth potential. The stock has been yielding a bit more than 2.6 per cent of late. While that is near the low end on this list, the life and health insurance company boasts the lowest payout ratio in terms of cash flow, which suggests it is well positioned to boost the dividend. Rounding out the list is Contrans Group Inc., which provides trucking and logistics services throughout North America. The transportation company raised its dividend by 25 per cent at the start of the year.

Source: Globe and Mail

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