Investments
Great-West Lifeco and IGM Financial get a big part of their earnings from fee income that varies with the value of the securities they manage.
Rising stock markets have increased earnings at both companies. As well, both are taking fewer writedowns on bonds and mortgage-backed securities because of improving credit markets.
GREAT-WEST LIFECO INC. $25 (Toronto symbol GWO; Conservative Growth Portfolio, Finance …read more »
CANADIAN NATIONAL RAILWAY CO. $64 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 465.4 million; Market cap: $29.8 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.7%; SI Rating: Above Average) operates the largest freight rail network in Canada. It also serves 16 U.S. states. Ottawa nationalized CN in 1922, as railways were critical to Canada’s early growth. …read more »
Ottawa’s new tax on income trusts comes into effect just over four months from now, on January 1, 2011. When it does, it will put trusts on an equal footing with regular corporations.
Right now, income trusts pay out a high percentage of their cash flows to their unitholders. This lets them avoid paying corporate taxes. It also gives many …read more »
The economic recovery continues to increase CP Rail’s shipments of forest products, coal, potash, grain, steel and cars. This new growth and the company’s aggressive cost cuts almost doubled its earnings in the latest quarter. Ongoing capital spending should help it take even better advantage of rising demand.
CANADIAN PACIFIC RAILWAY LTD. $62.60 (Toronto symbol CP; Shares outstanding: 168.7 million; Market …read more »
The investment industry has created all sorts of exchange-traded funds (ETFs) in recent years. However, quality varies. All too many exist to tap into popular, but risky, themes and fads, so you need to be highly selective with your ETF holdings.
ETFs offer very low management fees. In addition to low fees, the best ETFs offer well-diversified, tax-efficient portfolios of high-quality …read more »
CLAYMORE/ALPHASHARES CHINA SMALL CAP INDEX ETF $27.17 (New York Exchange symbol HAO; buy or sell through brokers) is an ETF that aims to track the AlphaShares China Small Cap Index. This index is made up of all investable Chinese stocks with market caps between $200 million and $1.5 billion.
The $314.2-million fund’s top holdings are Air China, 2.3%; Shandong Wiegao Group …read more »
ISHARES CDN REIT SECTOR INDEX FUND $12.72 (Toronto symbol XRE; buy or sell through a broker) holds the 11 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of this index’s value.
RioCan REIT is the fund’s largest holding, at 25%, followed by H&R REIT (14.2%), Canadian REIT …read more »
TRANSCANADA CORP. $36.81 (Toronto symbol TRP; Shares outstanding: 689.9 million; Market cap: $25.4 billion; SI Rating: Above Average; Dividend yield: 4.4%) has started pumping oil from Alberta’s oil sands to refineries in Illinois through the first phase of its new Keystone pipeline. The second phase of Keystone will extend to Oklahoma, and should be ready in 2011.
The company has already …read more »
LOBLAW COS. $43.87 (Toronto symbol L; Shares outstanding: 277.3 million; Market cap: $12.2 billion; SI Rating: Above Average; Dividend yield 1.9%) is Canada’s largest food retailer. It now has around 1,000 company-owned and franchised stores.
In the three months ended June 19, 2010, Loblaw’s earnings fell 6.7%, to $180 million from $193 million a year earlier. Earnings per share fell 8.6%, …read more »
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away.
Today’s tip: “Investment success depends …read more »
