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Top Stock Picks 2012 – Year End Results

Over the past few years, a group of bloggers have enlisted in a friendly competition as to who can pick the best stocks for the year.   As per tradition, we all report quarterly results to see how we are doing relative to each other, and more importantly, the market. This year, I picked a financial stock (BNS.TO), a big US consumer stock (MMM), a large Canadian minerals company (TCK-B.TO), and a well known Canadian oil company (SU.TO).

Up to the end of Q3, the portfolio returned 4.46% including dividends which lagged the 6% return of the TSX.  The Q3 results placed us 6th out of the 10 bloggers.  How did Q4 turn out?  Lets take a look!

Bank of Nova Scotia (BNS.TO) – With Canadian banks retreating from their highs in late 2011, their dividend yields have reached an attractive range. Scotia Bank, with a current yield of approximately 4%,  is known for their international operations and I believe has some upside coming in 2012.  That is providing that we don’t have a global financial meltdown. :) Trading price as of closing Dec 30, 2011: $50.83. Disclaimer: I own shares of BNS.TO.

Although BNS had a volatile year, it finished strong with a 52 week high at the finish line.  Q3 was strong with a 9.36% return, what about Q4? Trading price as of December 31, 2012: $57.50. Combined with a $2.24 dividend equates to a return of 17.53% for 2012. Disclaimer: I own shares of BNS.TO.

3M Co. (MMM) –  This company is a great example of a Dividend Achiever where it has increased their dividend for 53 consecutive years with a current yield of 2.69% and P/E ratio of 13.74.  Who is 3M?  They are a  large diversified technology company with seven large divisions.  However, they are likely most well known as the inventor of the Post-It note.  3M shares sold off in late 2011 but it looks like the stock has already started its recovery.  Trading price as of closing Dec 30, 2011: $81.73. Disclaimer: I own shares of MMM.

I picked this one to get exposure to the US market and that it appeared oversold at the beginning of the year.  This one has been a winner as the US market remained strong, especially for top US dividend stocks. Trading price as of December 31, 2012: $94.67. Combined with a $2.36 dividend equates to a return of 18.7% for 2012. Disclaimer: I own shares of MMM.

Teck Resources (TCK.B.TO) –  Teck Resources is my mineral play where the company is engaged in the exploration, development and production of copper, coal, gold and zinc.  It faced a steep decline in 2011 and I believe will start climbing again once confidence in the economy thus commodities returns. Teck currently yields 2.23% with a P/E ratio of 8.92. Trading price as of closing Dec 30, 2011: $35.91. Disclaimer: I own shares of TCK.B.

The most volatile stock in the portfolio played its part and was extremely volatile in 2012.  By the end of Q3, the stock was underwater by -18.1%. Trading price as of December 31, 2012: $36.93 combined with a $0.85 dividend equates to a surprising return of 5.2% for 2012. Disclaimer: I own shares of TCK-B.TO.

Suncor Energy (SU.TO) –  Suncor Energy is Canada’s largest integrated energy company.  It has a large stake in the oil sands and is involved in numerous other energy plays across the country. While this is not a huge dividend stock with a yield of 1.50%, I believe that the energy sector is oversold and has a large upside should the buyers return.    Trading price as of closing Dec 30, 2011: $29.38.Disclaimer: I own shares of SU.TO.

Canadian oil stocks dragged a bit in Q4, but performed well in 2012 overall.  Trading price as of December 31, 2012: $33.34. Combined with a $0.50 dividend equates to a return of 15.2% for 2012. Disclaimer: I own shares of SU.TO.

While the portfolio lagged the TSX in Q3, it more than doubled the Canadian market in 2012.  The portfolio averaged 14.2% in 2012, with the TSX returning approximately 6.6% including dividends (via XIU.TO). While 14.2% is a great return, it was not enough to beat the SP500 which returned 16.2% including dividends for 2012 (via XSP.TO).

The 14.2% return was good enough for 2nd place out of the 10 bloggers for 2012.  More results below:

Here are the the picks and results from the other bloggers:

  1. Where Does All My Money Go: 35.64%
  2. Million Dollar Journey:  14.2%
  3. My Traders Journal: 8.63%
  4. Dividend Growth Investor: 8.26%
  5. Wild Investor: 6.88%
  6. Dividend Mantra: 6.05%
  7. Intelligent Speculator: 6.04%
  8. The Passive Income Earner:  5.87%
  9. The Financial Blogger: -10.78%
  10. Beating The Index: -51.56%
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FrugalTrader About the author: FrugalTrader is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 11 comments… add one }
  • Jungle January 4, 2013, 6:55 am

    That Bank of America would have been a real nice pick.

  • SST January 4, 2013, 12:58 pm

    Interesting comment (#1).
    Demonstrates the public holding a very real disconnect between the performance of a company and the performance of it’s stock.

    Nice picks, FT.

  • My Own Advisor January 4, 2013, 2:12 pm

    Overall, good picks :)

  • sssssss January 4, 2013, 2:50 pm

    LOL @ Beating The Index. Lesson learned?

  • Canadian Dividend Blogger January 4, 2013, 2:51 pm

    I also own BNS – great company, and they raised their dividend twice this year. Even with the big 2012 gains, the yield is still 4% as they’re paying 57 cents a quarter instead of 52 cents. I also like the value in energy companies, at least ones like Suncor and Husky that are not paying more dividends than earnings.

  • Janine @ My Pennies, My Thoughts January 5, 2013, 2:23 am

    This is a really neat idea! I love seeing how stocks perform over the year!

  • Income Tax Man January 5, 2013, 4:24 am

    Thank you for the stock picks. I hope the money I have saved in 2011 can earn me some money this year.

  • Doug Willson January 11, 2013, 6:41 pm

    Only need 1 stock. CMG.TO growth like crazy and close to 4% div yield.

  • SST January 11, 2013, 11:03 pm

    Beware the parabola, Doug, but enjoy the ride (and riches)!

  • Sasha January 15, 2013, 12:43 am

    If you purchased CDN bank stocks on the US exchange in USD. Are the dividends subject to withholding tax? I’m assuming not but need confirmation. :)

  • Michael Kohn February 1, 2013, 4:48 am

    I also own MMM stocks..I hope they will do better next year.
    By the way you’ve picked some very good stock, congrats for your 2nd place!

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