Latest Stock Advice
Toromont Industries Ltd. should see continued earnings growth thanks to its leading market share and Canada’s plan to increase spending on infrastructure projects.
ARC Resources keeps returning its cash flow to shareholders through a growing dividend and substantial share buybacks.
These aren’t space startups: discover 7 dividend-paying aerospace and defense contractors tied to NASA’s Artemis mission (from TSI’s latest Globe and Mail column).
Top pick Linamar Corp. is trading cheaply despite delivering higher sales and profits.
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ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $20.37 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highestyielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of the ETF’s assets. The fund’s MER is 0.55%, and it yields 5.0%. Its top holdings are CIBC, 9.7%; Bank of Montreal, 7.4%; Royal Bank, 6.8%; BCE, 6.5%; Bank of Nova Scotia, 5.6%; Rogers Communications, 5.2%; Laurentian Bank of Canada, 5.0%; Manitoba Telecom, 5.0%; TD Bank, 4.7%; IGM Financial, 4.4%; and TransCanada Corp., 4.4%. The ETF holds 58.6% of its assets in financial stocks. The top Canadian finance stocks have sound prospects, but if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector....
ISHARES S&P/TSX 60 INDEX ETF $18.65 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. The ETF’s MER is just 0.18% of assets, and the units yield 3.2%. The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include. The index’s top holdings are Royal Bank, 8.7%; TD Bank, 8.0%; Bank of Nova Scotia, 5.6%; CN Railway, 4.8%; BCE, 4.0%; Bank of Montreal, 3.9%; Suncor Energy, 3.8%; Valeant Pharmaceuticals, 3.5%; Enbridge Inc., 3.3%; and Manulife Financial Corp., 3.1%....
We feel that investors will profit the most by holding a well-balanced portfolio of high-quality stocks. However, if you don’t want to build a portfolio, or you want to supplement your individual stock holdings, then ETFs can provide a great alternative. The main factors we use to evaluate ETFs are the stocks they hold, the diversification of their holdings across the five economic sectors and the fees (MERs) they charge. In general, investors holding mainly ETFs would want, say, 60% in Canadian ETFs and 20% to 30% in U.S. ETFs....
CANADIAN PACIFIC RAILWAY $159.03 (Toronto symbol CP; Shares outstanding: 153.8 million; Market cap: $25.5 billion; TSINetwork Rating: Above Average; Yield: 0.9%; www.cpr.ca) reported 5.9% lower freight volumes in the latest quarter, mainly because of falling prices for oil, minerals and other commodities. In the three months ended December 31, 2015, CP earned $419 million, down 8.9% from $460 million a year earlier. However, per-share earnings gained 1.5%, to $2.72 from $2.68, on fewer shares outstanding. Revenue fell 4.1%, to $1.69 billion from $1.76 billion. Still, revenue from forest products jumped 20.4%, and fertilizer shipments rose 18.0%....