Of the top 10 brands in Canada, nine are publicly available on the Toronto Stock Exchange. You can become the part owner of Canada’s most valuable brands by buying their shares today.
The 100 most valuable brands in Canada are listed on the Brand Finance website, and the list was compiled in partnership with the Globe and Mail earlier this year.
Canada’s most valuable brands
Canada’s most valuable brands include the Big Five Canadian banks: Royal Bank of Canada (TSX:RY)(NYSE:RY), Toronto-Dominion Bank (TSX:TD)(NYSE:TD), Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), Bank of Montreal (TSX:BMO)(NYSE:BMO), and Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM).
Here are the top 10 brands with their brand values, share prices, and yields.
|1||Royal Bank of Canada||12,473||$75.6||4.2%|
|4||Bank of Nova Scotia||7,028||$58||4.8%|
|5||Bank of Montreal||6,930||$78.7||4.3%|
|6||Rogers Communications Inc.||4,814||$48.5||4%|
|7||Canadian Imperial Bank of Commerce||4,851||$93||4.9%|
* Share prices and yields as of closing on December 24, 2015.
What’s in it for shareholders?
You might notice that all of these brands pay dividends. Moreover, most pay at least a 4% yield. Investors not only get to own a part of a valuable brand, but they also get to share profits in the form of dividends, a regular income.
Companies aren’t obligated to pay dividends, but all of these companies have a history of paying dividends. Bank of Nova Scotia has increased its dividend for 43 of the last 45 years. Enbridge has paid a growing dividend for 19 consecutive years. Telus has paid a growing dividend for 11 consecutive years.
With a strong culture of paying dividends, these valuable brands are likely to continue paying and even increasing them. As these brands continue to turn a profit, shareholders should also see steady price appreciation in their stakes.
Which are good buys today?
Canadian banks have pulled back this year due to a weakened economy and energy and mining woes. Of the Big Five banks, Bank of Nova Scotia has the biggest discount compared with its historical normal multiple. Canadian Imperial Bank of Commerce is the second cheapest, followed by Royal Bank of Canada.
Bank of Nova Scotia and Canadian Imperial Bank of Commerce also give the highest yields among the Big Five banks, paying out yields of 4.8% and 4.9%, respectively.
There are also some good deals in the telecoms. BCE is fairly valued and provides a stable income. Telus Corporation is priced at a multiple that’s similar to 2013’s pullback when there was a rumour that Verizon was entering the Canadian market.
The recent news that Shaw Communications Inc. is buying Wind Mobile is a big factor for Telus’s pullback. That said, Shaw ranks 12th on the most valuable brand list and Telus ranks higher at the eighth place. So, it’s compelling to buy Telus, which yields 4.5% at a discount multiple.
Along with other energy companies, Enbridge has fallen in price. Yet it just increased its dividend by 14%. The price decline allows investors to buy for a 4.6% yield instead of the 3.1% yield it had at the start of 2015.
The most valuable brands are great additions to any diversified portfolio, particularly one that’s focused on income and income growth. However, investors should keep risk in check as well. Don’t allocate more than 3-5% in any company, and don’t allocate more than 20% in any sector.