However, he thinks Canadian investors have to expect some turnover, given the reversal in macroeconomic conditions that we’ve seen over the past two years. “We were living in a world with practically zero interest rates,” Raina says. Canadian investors had to take on more risk to get decent yields from their investments.
Today, investors can find virtually risk-free investments with a 5% yield. That’s going to reshuffle the deck somewhat.
“The commodity-type companies are showing up [with better scores] on a valuation perspective,” Raina says. “It could set them up nicely for [investment gains] this year because if rates go down and, more specifically, if the U.S. dollar goes down, that could provide a tailwind for some of these commodity stocks.”
Those seeking more sectoral diversification will want to check out our B-Team. These stocks are almost as promising, by our criteria, and with their greater industrial diversity, they can help fill any gaps in your portfolio. (As our past dividend performance summary shows, last year’s B list actually far outperformed the A list.)
What the numbers appear to be saying is that 2024 might be a year to lean into natural resources. “Going into this [process], I’m not trying to skew it to get a certain outcome. We’re just running the factors, and whatever comes out, comes out,” Raina says. “The theme is, right now, commodity stocks might be undervalued and provide an opportunity.”
The MoneySense A-Team and B-Team dividend stocks for 2024
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Top dividends A-team
Top dividends B-team
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