How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
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TELUS $39.66 (Toronto symbol T; Shares outstanding: 593.3 million; Market cap: $23.4 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.telus.com) is Canada’s second-largest wireless carrier (behind Rogers Communications) with 8.4 million subscribers. In addition, its wireline division serves 3.1 million landline phone customers in B.C., Alberta and eastern Quebec. This business also has 1.5 million Internet users and 980,000 TV customers. Telus will now extend its reach into Manitoba with BCE’s takeover of Manitoba Tel (see page 33). To satisfy Canadian telecom regulators, BCE plans to sell to Telus about one-third of Manitoba Telecom’s current postpaid wireless accounts, or a block of about 140,000 subscribers. BCE will also transfer one-third of Manitoba Tel’s retail outlets to Telus. In the three months ended March 31, 2016, the company earned $414 million, down 3.0% from $427 million a year earlier. However, earnings per share were unchanged at $0.70, due to fewer shares outstanding. Revenue gained 2.6%, to $3.11 billion from $3.03 billion....
TD BANK $55.77 (Toronto symbol TD; Shares outstanding: 1.9 billion; Market cap: $103.5 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.td.com) is the first Canadian bank to use Visa’s new tokenization technology in its mobile banking app. This system uses encrypted “tokens” instead of credit card numbers and other account information. That helps protect sensitive client information from online intruders. It also speeds up mobile payments and other transactions. Better security should encourage more of TD’s customers to do their banking online. That would cut its costs as electronic transactions are cheaper to process than those in physical branches....
ENBRIDGE INC. $50.95 (Toronto symbol ENB; Shares outstanding: 924.3 million; Market cap: $47.5 billion; TSINetwork Rating: Above Average; Divd. yield: 4.2%; www.enbridge.com) has received Canadian regulatory approval to replace its Line 3 pipeline, which began operating in the 1960s. It pumps crude oil from Hardisty, Alberta, to Superior, Wisconsin. U.S. regulators have already approved the plan. The project will also enlarge the line’s capacity, from 390,000 barrels a day to 760,000 barrels. Enbridge expects to complete these upgrades by 2019. Regulators have imposed 89 conditions on the project—mainly additional measures to improve safety and environmental protections. But these conditions are unlikely to increase the project’s $7.5 billion cost....
PENGROWTH ENERGY $1.82 (Toronto symbol PGF; Shares outstanding: 543.0 million; Market cap: $1.1 billion; TSINetwork Rating: Speculative; No dividends paid; www.pengrowth.com) started up its Lindbergh oil sands project in Alberta in April 2015. The project includes an electrical power plant that provides the operation with steam used to melt the tar-like bitumen. That makes it easier to pump to the surface. The provincial power grid then buys the company’s excess power. Pengrowth is now selling this plant to a local First Nations group for $35 million. As part of the deal, Pengrowth will lease back the facility for 20 years and continue to operate it....
IMPERIAL OIL $40.37 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $34.2 billion; TSINetwork Rating: Average; Dividend yield: 1.5%; www.imperialoil.ca) is raising its quarterly dividend by 7.1% with the July 2016 payment, to $0.15 from $0.14. The company has paid dividends every year for over a century and has increased its annual dividend payment for 21 consecutive years. Imperial Oil is a buy....
CANADIAN PACIFIC RAILWAY $181.49 (Toronto symbol CP; Shares outstanding: 153.0 million; Market cap: $27.8 billion; TSINetwork Rating: Above Average; Dividend yield: 1.1%; www.cpr.ca) has abandoned its plan to merge with U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). Norfolk rejected CP’s latest offer of about $30 billion U.S. in cash and shares. In addition, U.S. transportation regulators probably would have blocked any deal no matter how CP structured the transaction. The company will now use some of the cash it had set aside for the takeover to raise its quarterly dividend by 42.9%, starting with the July 2016 payment. The new annual rate of $2.00 a share yields 1.1%....
Trading on the after hours market can easily do more harm than good to your portfolio returns.
Imperial Oil is selling its remaining Esso gas stations. This will let the company focus on its oil sands operations. These projects will prosper when oil prices recover, and enhance the company’s growth prospects. IMPERIAL OIL $41.25 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $34.4 billion; TSINetwork Rating: Average; Dividend yield: 1.4%; www.imperialoil.ca) is a major integrated oil company with oil sands projects in Alberta and conventional oil and gas operations across Western Canada. It also operates three refineries. Imperial is now selling its 497 company-owned Esso gas stations to independent operators for $2.8 billion. Following the sale, franchisees will operate all 1,700 Esso stations across Canada....
TRANSCANADA CORP. $49.18 (Toronto symbol TRP; Shares outstanding: 709.0 million; Market cap: $34.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.transcanada.com) has run into difficulties lately in gaining approvals for new pipelines, including Energy East in Canada and Keystone XL in the U.S. However, the company has moved forward with its proposed acquisiton of Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. This is a big purchase for TransCanada, which has a market cap of $35.4 billion (Canadian)....
PEMBINA PIPELINE $34.61 (Toronto symbol PPL; Shares outstanding: 373.4 million; Market cap: $12.7 billion; TSINetwork Rating: Average; Dividend yield: 5.0%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil and almost all of B.C.’s oil. It also carries 30% of Western Canada’s natural gas liquids (NGLs). Pembina owns extensive facilities to extract, process and store NGLs, as well as natural gas processing plants. In the three months ended December 31, 2015, the company’s cash flow per share jumped 57.0%, to $0.77 from $0.49 a year earlier. New plants starting up boosted volumes at its NGL extraction business....