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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ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $35 and ACO.Y [class II voting] $35; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.atco.com) has sold its ATCO Emissions Management subsidiary for an undisclosed sum. This business helps producers of oil, gas and electricity reduce air and noise pollution. Small deals like this help simplify ATCO’s complex holding company structure, which should enhance its long-term value. The class I (X) non-voting shares are more liquid than the class II (Y) voting shares....
BANK OF NOVA SCOTIA $53 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $63.6 billion; Price-to-sales ratio: 2.9; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.scotiabank.com) is considering selling all or part of its 49% stake in Thailand’s Thanachart Bank, which has a book value of $2.4 billion. Like many Asian nations, Thailand prohibits foreign firms from controlling domestic banks. Economic weakness and political uncertainty have also hurt loan demand in the country. Bank of Nova Scotia would probably use the proceeds from any sale to expand in Latin America. In 2015, it acquired 51% of Chilean retailer Cencosud’s credit card and consumer loan operations, making Scotiabank that country’s third-largest credit card lender. It also acquired Citibank’s retail banking businesses in Peru, Panama and Costa Rica....
CANADIAN IMPERIAL BANK OF COMMERCE $87 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.3 million; Market cap: $34.6 billion; Price-to-sales ratio: 2.7; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.cibc.com) is Canada’s fifth-largest bank, with total assets of $463.3 billion. CIBC has built up its Canadian banking operations in the past few years, and this business now supplies 62% of its earnings. It gets a further 25% from its capital markets division, which provides brokerage and underwriting services in Canada, the U.S. and other countries. The remaining 13% comes from its wealth management division, which has $304.8 billion in assets under administration and management.
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Steady revenue and earnings gains
BOMBARDIER INC. $1.35 (www.bombardier.com) recently sold 30% of its railcar business to Caisse de dépôt et placement du Québec, which manages the province’s public pension plan, for $1.5 billion U.S. It also sold 49.5% of its CSeries passenger jet business for $1 billion U.S. However, its debt of $9.0 billion U.S. is now a high 4.8 times its depressed market cap of $2.7 billion (Canadian). As a result, we’ve cut Bombardier’s TSINetwork Rating, from “Extra Risk” to “Speculative”. Hold. PENGROWTH ENERGY INC. $0.72 (www.pengrowth.com) has sold its Jenner oil property in Alberta for $78 million. This is part of its plan to sell $600 million of its less-important properties, and apply the proceeds to its long-term debt of $1.86 billion (as of November 30, 2015), which is a high 4.8 times its $391.0-million market cap. However, low oil prices will hurt its ability to keep paying down debt, which is why we’ve cut Pengrowth’s TSINetwork Rating, from “Average” to “Speculative”. Hold. RESTAURANT BRANDS INTERNATIONAL INC. $46 (www.rbi.com) has raised its quarterly dividend by 8.3%, to $0.13 U.S. a share from $0.12 U.S. The new annual rate of $0.52 U.S. yields 1.5%. Hold....