Top pick Barrick Mining just raised its dividend a whopping 140% as it generates record earnings and continues its strategic asset reorganization.
Warner Music Group Corp. is well-positioned for higher-margin catalog revenues, added streaming adoption, and new AI monetization opportunities.
ARC Resources keeps returning its cash flow to shareholders through a growing dividend and substantial share buybacks.
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MAPLE LEAF FOODS INC. $30 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 134.6 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.2%; TSINetwork Rating: Average; www.mapleleaffoods.com) is Canada’s largest food processor. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company recently completed a multi-year restructuring plan that involved closing older meat processing plants and shifting their operations to newer, more efficient ones. Thanks to the success of this plan, Maple Leaf earned $42.3 million, or $0.31 a share, in the three months ended March 31, 2016. The results are a big improvement over the $2.9 million, or $0.02, it lost a year earlier. If you factor out unusual items, earnings per share jumped to $0.28 from $0.05....
HOME CAPITAL GROUP INC. $32 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 66.0 million; Market cap; $2.1 billion; Price-to-sales ratio: 3.9; Dividend yield: 3.0%; TSINetwork Rating: Average; www.homecapital.com) offers most of its loans through 4,000 independent mortgage brokers. In July 2015, it cut ties with 45 of them after it uncovered inaccurate information on loan applications. Allegedly, these brokers falsified borrowers’ annual incomes but not their credit scores and property values. The company has now reviewed 75% of these loans. So far, it has not found any unusual problems. It expects to complete the process by the end of 2016. Home Capital also cuts its credit losses down by identifying problem loans early and adjusting the repayment terms. In the first quarter of 2016, it set aside $1.4 million to cover potential loan losses, down 42.0% from a year earlier....
THOMSON REUTERS CORP. $53 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 752.4 million; Market cap: $39.9 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.thomsonreuters.com) mainly sells information products to financial clients, such as banks and brokerages. In 2015, this business supplied 52% of Thomson’s revenue. The company also sells specialized information to professionals in the legal (27%); tax and accounting (11%); and intellectual property and science (8%) fields. Its Reuters news division supplies the remaining 2%. Thomson now plans to sell its intellectual property business. It will probably use the expected proceeds of $3 billion to buy back its own shares (all amounts except share price and market cap in U.S. dollars). The sale should close later this year....
BANK OF NOVA SCOTIA $63 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $75.6 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.scotiabank.com) continues to expand its Internet and mobile banking operations. As a result, it is reorganizing its branches and cutting jobs. Severance payments and other costs will reduce the bank’s earnings by $0.22 a share in the quarter ended April 30, 2016. To put that in context, it earned $1.43 a share in the previous quarter. Bank of Nova Scotia is a buy.