BMO BMO chief strategist picks TSX stocks with dividend growth potential
BMO chief investment strategist Brian Belski argued that the strong cash flow generation for TSX companies will favour dividend growth stocks , and he provided investment options with the potential to increase payouts, “S&P/TSX cash generation has been strong, while balance sheets remain in great shape, according to our models. As such, we believe the capital deployment cycle, which started in mid-2021 will likely continue to be a key theme in the back half of 2022 and well into 2023. Ultimately, our work shows this type of environment will favour dividend-based strategies - particularly companies that have strong enough cash generation and balance sheets to support growth within the operating portions of their business while also growing dividends and buying back shares … capital spending has only recently risen above the rate of depreciation, leaving plenty of room for the capital deployment cycle to continue, in our opinion.”
The stocks in the accompanying dividend growth potential screen are Boardwalk REIT, Birchcliff Energy, Canadian Apartment Properties REIT, CCL Industries, Canadian Natural Resources, Crescent Point Energy, Constellation Software, Cenovus Energy, Dream Office REIT, Dollarama, Dundee Precious Metals, EQB Inc., Gildan Activewear, H&R REIT, Interfor Corp., Interrent REIT, Methanex, Nutrien, Paramount Resources, Parex Resources, SSR Mining, Tricon Residential, Teck Resources Ltd., Whitecap Resources, West Fraser Timber Co., and Sleep Country Canada Holdings.