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TMX Group: A Consistently Growing Dividend

Published Fri, 29 May 2020 07:35:59 -0400 on Seeking Alpha

TMX Group operates the Toronto Stock Exchange and the TSX Venture Exchange.
Higher volatility levels should result in a strong Q2 (on the back of an improved Q1).
The coverage ratio of 2% dividend is in excess of 200%, and a recently instated share buyback program will help to reduce the share count.
Perhaps wait for a dip, but TMX could be a good, defensive dividend payer for any portfolio.
TMX Group Ltd. (OTCPK: TMXXF) is the operator of the Toronto Stock Exchange. The company's share price has increased by approximately 50% since reaching its March lows, as investors realized volatility actually is a good thing for the operators of stock exchanges. Although the recent run in its share price has reduced the dividend yield to approximately 2%, strong financial results will allow TMX to rapidly reduce debt and/or accelerate a share buyback program to complement the 2% yield.
Data by YCharts
The average daily volume of TMX on the OTC market is around 1,000 shares per day, which isn't great. That's why it would be recommended to trade in the shares through the facilities of the Toronto Stock Exchange (which also is the best way to support the business) where it's trading with X as its ticker symbol. With an average daily volume exceeding 220,000 shares, liquidity in Canada is clearly much better. And as TMX is a Canadian company reporting its financial results in Canadian dollars, I will be using CAD as the base currency throughout this article. And where applicable, I will be pointing to the Canadian listing to determine the per-share metrics.
TMX Group: Operating the Toronto Stock Exchange
TMX Group operates the main Canadian stock exchanges with the Toronto Stock Exchange and TSX Venture Exchange as main trading venues. The company's subsidiaries operate derivative markets and clearing houses as well as normal cash markets for several asset classes.

Source: Annual Information Form (retrieved on SEDAR.com)
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