National Bank’s “Dividend All-Stars” portfolio has outperformed the broader index by a wide margin this year.
In mid-February, National Bank released its 2025 All-Stars portfolio, which included 21 securities. Between Febr.14 and Aug. 29, it rallied 15.6 per cent with a total return of 18.8 per cent, including the 3.2-per-cent yield. In comparison, the S&P/TSX Composite Index is up 12.1 per cent, which combined with the 1.6-per-cent yield for the period brings the total return to 13.7 per cent.
On Sept. 8, National Bank updated its portfolio and replaced four securities. Canadian Imperial Bank of Commerce (CM-T), Cogeco Communications Inc. (CCA-T), Innergex Renewable Energy Inc. (INE-T) and Transcontinental Inc. (TCL-A-T) were replaced by Aura Minerals Inc. (ORA-T), Bank of Montreal (BMO-T), BCE Inc. (BCE-T) and Pembina Pipeline Corp. (PPL-T).
To be included in the portfolio, each security must meet the following requirements: 1) have a minimum yield of approximately 5 per cent; 2) exhibit a high probability of sustainable or rising dividends; and 3) have an overall positive outlook for the company and/or the security price.
Here is a list of all securities in the updated portfolio grouped by sector exposures along with brief commentaries on the portfolio’s recent additions.
Pipeline/Utilities/Energy
AltaGas Ltd. (ALA-T)
- Target price: $45
- Yield (as of Sept. 9): 3.1 per cent
Brookfield Renewable Partners LP (BEP-UN-T)
- Target price: US$32
- Yield (as of Sept. 9): 5.9 per cent
Capital Power Corp. (CPX-T)
- Target price: $63
- Yield (as of Sept. 9): 4.9 per cent
Gibson Energy Inc. (GEI-T)
- Target price: $25
- Yield (as of Sept. 9): 6.6 per cent
Pembina Pipeline Corp. (PPL-T)
- Target price: $56
- Yield (as of Sept. 9): 5.4 per cent
TC Energy Corp. (TRP-T)
- Target price: $76
- Yield (as of Sept. 9): 4.7 per cent
Topaz Energy Corp. (TPZ-T)
- Target price: $33.50
- Yield (as of Sept. 9): 5.4 per cent
Financials
Alaris Equity Partners Income Trust (AD-UN-T)
- Target price: $25
- Yield (as of Sept.9): 7.4 per cent
Bank of Montreal (BMO-T)
- Target price: $173
- Yield (as of Sept.9): 3.7 per cent
IGM Financial Inc. (IGM-T)
- Target price: $58
- Yield (as of Sept. 9): 4.5 per cent
Communication Services
BCE Inc. (BCE-T)
- Target price: $38
- Yield (as of Sept. 9): 5.2 per cent
Transportation
Exchange Income Corp. (EIF-T)
- Target price: $84
- Yield (as of Sept. 9): 3.7 per cent
Mullen Group Ltd. (MTL-T)
- Target price: $17
- Yield (as of Sept. 9): 6.1 per cent
Real Estate
Choice Properties REIT (CHP-UN-T)
- Target price: $16
- Yield (as of Sept. 9): 5 per cent
Dream Industrial REIT (DIR-UN-T)
- Target price: $13.25
- Yield (as of Sept. 9): 5.7 per cent
RioCan REIT (REI-UN-T)
- Target price: $19.75
- Yield (as of Sept. 9): 6.2 per cent
Sienna Senior Living Inc. (SIA-T)
- Target price: $21
- Yield (as of Sept. 9): 5.1 per cent
Diversified
Chemtrade Logistics Income Fund (CHE-UN-T)
- Target price: $17.50
- Yield (as of Sept. 9): 5.3 per cent
Dexterra Group Inc. (DXT-T)
- Target price: $14
- Yield (as of Sept. 9): 4.2 per cent
Doman Building Materials Group Ltd. (DBM-T)
- Target price: $10.50
- Yield (as of Sept. 9): 5.7 per cent
Materials
Aura Minerals Inc. (ORA-T)
- Target price: US$35
- Yield (as of Sept. 9): 3.9 per cent
Four Additions
Aura Minerals Inc.
- “Outperform” rating
- “Aura has built a strong track record of rewarding shareholders through dividends and buybacks, returning approximately US$276 million between dividends and buybacks since 2021…We expect the trend to continue, supported by the currently strong gold price environment and as Aura continues to expand its gold production base.”
- “With six operating mines including Borborema (commercial production expected Q3/25) and MSG (acquisition close by year end), Aura is well positioned to take advantage of a rising gold price environment while delivering on growth and FCF [free cash flow].”
- Net Asset Value (NAV) per share: $32.88
- Price/Net Asset Value: 0.81
Bank of Montreal
- “Outperform” rating
- “BMO’s CET1 ratio stands at a healthy 13.5 per cent, approximately 200 bps above OSFI’s minimum requirements. BMO also has the longest-running dividend payout record of any company in Canada, at nearly 200 years, with approximately 7 per cent annual growth in dividends per share over the last decade. Over the medium term, we expect BMO’s dividend growth to persist at similar levels, powered by BMO’s large excess capital position as well as strong EPS [earnings per share] growth (+12 per cent in 2026E).”
- “Our target price of $173 is derived via a 13x P/E multiple applied on our 2026E EPS forecast.”
- Adjusted earnings per share: $9.68 in 2024, $11.82 forecast in 2025, $13.25 forecast in 2026.
BCE Inc.
- “Outperform” rating
- “With its Q1 [first quarter] reporting in May, BCE sought to change the narrative on its story which had become stale over the past several quarters amid slowing EBITDA [earnings before interest, taxes, depreciation and amortization] growth and declines in revenues and FCF [free cash flow] in 2024 as well as calls for a necessitated cut to the dividend. The dividend finally got reduced by 56 per cent and the long-term target for the dividend payout policy was updated to 40 per cent to 45 per cent of FCF from 65 per cent to 75 per cent. Leverage was telegraphed to reach approximately 3.5x in 2027 (it will close 2025 at approximately 3.8x or approximately 3.7x pro forma Ziply Fiber) and roughly 3.0x by 2030.”
- “Our target’s based on the average of our 2025E/2026E DCF [discounted cash flow] & 2026E/2027E NAV, with implied EV/EBITDA multiples of 7.2x PF2025E & 7.1x 2026E”
Pembina Pipeline Corp.
- “Outperform” rating
- “We forecast Pembina’s 2026e cash flows to be approximately 90 per cent fee-based, which includes roughly 60 per cent take-or-pay / cost-of-service with the Peace Pipeline & Northern Pipeline under long-term commitments and the bulk of its conventional pipelines in British Columbia operated under a cost-of-service model.”
- “PPL remains focused on the completion of its in-flight projects, including RFS IV, the Wapiti Expansion, the K3 Cogeneration Facility and Cedar LNG, which the company continues working through its shortlist of counterparties and entered definitive agreements to remarket its 1.5 Mtpa [million tonnes per annum] of Cedar LNG Project capacity.”
- “Meanwhile, PPL has significant unutilized capacity spanning the Montney and Duvernay resource plays, setting the company up to capture incremental NGL volumes down its Peace Pipeline system. Combined with approximately $1.0 billion of Pipeline expansion opportunities, unutilized processing capacity and other greenfield developments, we highlight a sector-leading roughly 15 per cent unrisked valuation upside profile across the company’s gas & NGL infrastructure platform.”