Search

DOREL INDUSTRIES $30.78 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-934-3034; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.0 billion; Dividend yield: 5.1%) reports that its sales rose 0.9% in the three months ended September 30, 2015, to $679.3 million from $673.0 million a year earlier (all figures except share price and market cap in U.S. dollars).

Earnings fell 35.1%, to $0.48 a share from $0.74. However, Dorel gets half of its sales from outside the U.S., and the high U.S. dollar cut its earnings by $0.28 a share in the latest quarter. Costs related to the company’s plan to shift juvenile-product manufacturing to Asia also weighed on its earnings.

The stock trades at a low 7.9 times Dorel’s forecast 2016 earnings of $2.94 a share. It yields a high 5.1%.

...

STANTEC INC. $33.13 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 94.2 million; Market cap: $3.1 billion; Dividend yield: 1.3%) sells a range of consulting, project-delivery, design and technology services.

Its clients operate in a variety of industries, including oil and gas, transportation and construction.

In the three months ended September 30, 2015, Stantec’s acquisitions and the stronger U.S. dollar boosted its revenue by 14.0%, to $620.1 million from $544.2 million a year ago. However, earnings rose just 2.8%, to $49.9 million, or $0.53 a share, from $48.6 million, or $0.52. That was mostly due to the cost of integrating recently purchased firms.

...

MITEL NETWORKS $11.40 (Toronto symbol MNW; TSINetwork Rating: Extra Risk)(613-592-2122; www.mitel.ca; Shares outstanding: 120.3 million; Market cap: $1.4 billion; No dividends paid) develops and markets products centred on business telephone systems, including technology that integrates land lines and mobile phones. The company also offers call centre and videoconferencing products.

In the three months ended September 30, 2015, Mitel’s revenue rose 7.2%, to $293.7 million from $274.0 million a year earlier (all figures except share price and market cap in U.S. dollars).

However, earnings per share fell 33.3%, to $0.12 from $0.18, as the stronger dollar lowered the value of the company’s international sales. Even so, that beat the consensus estimate of $0.07 a share.

...

RESTAURANT BRANDS INTERNATIONAL $36.59 (New York symbol QSR; TSINetwork Rating: Average) (905-845-6511; www.rbi.com; Shares outstanding: 476.4 million; Market cap: $17.4 billion; Div. Yield: 1.4%) is the world’s third-largest fast-food operator, after McDonald’s and Yum Brands, with 14,669 Burger King outlets and 4,845 Tim Hortons stores in 100 countries.

In the three months ended September 30, 2015, Restaurant Brands earned $162.7 million, up 26.8% from $128.3 million a year earlier. Earnings per share gained 25.9%, to $0.34 from $0.27, on more shares outstanding.

However, sales fell 8.4%, to $1.02 billion from $1.11 billion, as the high U.S. dollar hurt the contribution from Restaurant Brands’ overseas operations.

...

EXTENDICARE INC. $9.36 (Toronto symbol EXE; TSINetwork Rating: Extra Risk)(905-470-5534; www.extendicare.com; Shares outstanding: 87.7 million; Market cap: $833.7 million; Dividend yield: 5.1%) owns 57 longand short-term senior-care facilities that can house 8,118 residents. It also manages a further 95 residences that are home to 6,195 seniors.

Extendicare also operates 47 ParaMed Home Health Care branches in six provinces. ParaMed’s 10,900 staff members provide nursing care and other forms of assistance to clients who live at home.

In late 2014, the company sold its 156 U.S. facilities for after-tax proceeds of around $231.1 million U.S. Extendicare is now reporting improved results and has deployed the cash from the sale.

...

Developing no drugs of its own, Canada’s Merus Labs is a penny stock that relies exclusively on acquisitions to grow—and that adds risk.

Our take on the risks and rewards of growth by acquisition with Element Financial, a rapidly-expanding growth stock whose shares have soared.

With $5.8-billion worth of investment planned in Alberta and Mexico, blue chip stock Canadian Utilities is poised to generate new profits.

Devon Energy and Cimarex Energy are among the energy stocks we view as being best positioned to weather the oil and gas slowdown.

Ten ways to find gems among the rocks when investing in Canadian penny mining stocks

Exchange traded receipts are a novel way for investors to invest in gold bullion

Our view on the risks and rewards of Canadian penny stock Madalena Energy, which is carrying out ambitious plans in Argentina

ISHARES S&P/TSX 60 INDEX ETF $20.99 (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. Expenses are just 0.17% of assets.

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, 8.3%; TD Bank, 7.3%; Bank of Nova Scotia, 5.7%; CN Railway, 4.7%; Suncor Energy, 3.9%; Bank of Montreal, 3.8%; Valeant Pharmaceuiticals, 3.8%; Enbridge, 3.7%; BCE, 3.2%; Manulife Financial, 2.9%; TransCanada Corp., 2.9%; CIBC, 2.9%; Canadian Natural Resources, 2.8%; CP Rail, 2.5%; and Potash Corp., 2.5%.

...

BANK OF NOVA SCOTIA $63.67 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $77.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%, www.scotiabank.com) was our #1 pick for 2014.

The stock hit a high of $74.93 in November 2014. It has moved down lately with stock markets, but it’s still up almost 8%, including dividends.

Bank of Nova Scotia is the third-largest of Canada’s five big banks, with $805.7 billion of assets.

...

You are never too old to have a long term investing strategy

GLOBAL X COPPER MINERS ETF $5.26 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes 20 to 40 international companies that mine, refine or explore for copper. Germany-based Structured Solutions AG created this index.

Canadian firms make up 38.8% of the ETF’s holdings. It also includes companies based in Australia (15.6%), Mexico (5.5%), Peru (5.4%) and Poland (5.0%). The fund’s MER is 0.65%.

Its top holdings are Sandfire Resources at 10.4%; Southern Copper, 7.9%; Oz Minerals, 7.7%; Grupo Mexico, 6.9%; Vedanta Resources, 6.8%; Lundin Mining, 6.3%; Antofagasta plc, 5.9%; KGHM Polska Miedz, 5.7%; Turquoise Hill, 5.6%; Jiangxi Copper, 5.2%; and Freeport- McMoRan, 4.4%.

...

GLOBAL X SILVER MINERS ETF $7.41 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index. This index includes 25 international firms that mine, refine or explore for silver. It was developed by Germany-based Structured Solutions AG.

Canadian firms make up 58.0% of the fund’s holdings, but it also includes miners in the U.S. (12.3%) and Mexico (11.2%). Its MER is 0.65%.

...

ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $8.55 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index, which is made up of 38 gold stocks from Canada and around the world. The ETF began trading on March 23, 2001. Its MER is 0.61%. The fund’s top holdings are Goldcorp at 13.6%; Newmont Mining, 11.5%; Barrick Gold, 9.7%; Franco-Nevada Corp., 9.3%; Agnico-Eagle Mines, 7.6%; Randgold Resources (ADR), 7.4%; AngloGold Ashanti (ADR), 4.3%; and Royal Gold, 4.0%.

iShares S&P/TSX Global Gold Index is a hold.
...

MARKET VECTORS VIETNAM ETF $17.317 (New York symbol VNM; buy or sell through brokers) holds Vietnamese companies or foreign firms that get a significant amount of their revenue from Vietnam.

The ETF’s top holdings are Vincom Corp. (real estate), 7.8%; Bank for Foreign Trade of Vietnam, 7.5%; Masan Group (a food, resources and banking conglomerate), 6.5%; Saigon Thuong Tin Commercial Bank, 6.3%; and Baoviet Holdings (insurance), 6.1%.

The ETF cuts risk by investing part of its assets in firms that are based outside of Vietnam but still do business there. That’s a better approach than adding thinly traded or illiquid shares of smaller Vietnamese firms.

...

VERESEN $11.60 (Toronto symbol VSN; Shares outstanding: 292.0 million; Market cap: $3.2 billion; TSINetwork Rating: Average; Dividend yield: 8.6%; www.vereseninc.com) and KKR & Co. LP (symbol KKR on New York) formed a joint venture in late 2014 called Veresen Midstream.

The partners then bought natural gas gathering and compression assets in northeastern B.C. from Encana and Japan’s Mitsubishi Corp. for $1 billion.

As well, Veresen Midstream agreed to undertake a $5-billion expansion for gas producers, including Encana. This development would be backed by 30-year contracts that would significantly cut Veresen Midstream’s risk.

...

ISHARES MSCI CANADA INDEX FUND $24.49 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.48% MER and yields 1.7%.

The index’s top holdings are Royal Bank, 7.7%; TD Bank, 7.1%; Valeant Pharmaceuticals, 5.6%; Bank of Nova Scotia, 4.9%; CN Railway, 4.4%; Suncor Energy, 3.7%; Bank of Montreal, 3.5%; Enbridge, 3.1%; and Manulife Financial, 3.0%. If you want to own a Canadian index fund, you should buy the iShares S&P/TSX 60 Index ETF (see previous page). You’ll pay about a third of the management fees.

We don’t recommend the iShares MSCI Canada Index Fund.

...

POWERSHARES QQQ ETF $105.63 (Nasdaq symbol QQQ; buy or sell throughbrokers ; www.invescopowershares.com), formerly called Nasdaq 100 Trust Shares, holds stocks representing the Nasdaq 100 Index, which consists of the 100 largest shares on the Nasdaq exchange by market cap.

The Nasdaq 100 Index contains shares of companies in a number of major industries, including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain financial firms. The fund’s expenses are about 0.20% of its assets. It yields 1.0%.

The index’s highest-weighted stocks are Apple, Microsoft, Amgen, Google, Cisco Systems, Intel Corp., Amazon.com, Gilead Sciences, Comcast and Facebook.

...

ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $22.48 (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 4.3%.

The fund’s top holdings are CIBC, 9.7%; Bank of Montreal, 6.8%; Royal Bank, 6.5%; BCE, 5.8%; Bank of Nova Scotia, 5.5%; Laurentian Bank of Canada, 5.0%; Rogers Communications, 4.5%; Manitoba Telecom, 4.4%; TD Bank, 4.4%; National Bank, 4.1%; IGM Financial, 4.0%; and Emera Inc., 3.8%.

The ETF holds 53.7% 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 $20.47 (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. Expenses are just 0.18% of assets, and the units yield 3.1%.

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, 8.3%; TD Bank, 7.7%; Valeant Pharmaceuticals, 6.0%; Bank of Nova Scotia, 5.6%; CN Railway, 4.7%; Suncor Energy, 4.0%; Bank of Montreal, 3.7%; BCE, 3.6%; Enbridge, 3.3%; Manulife Financial, 3.2%; CIBC, 3.0%; Brookfield Asset Management, 2.8%; and TransCanada Corp., 2.4%.

...

ENBRIDGE INC. $55.89 (Toronto symbol ENB; Shares outstanding: 860.1 million; Market cap: $46.6 billion; TSINetwork Rating: Above Average; Divd. yield: 3.3%; www.enbridge.com) has received regulatory approval to reverse the flow of crude oil on its Line 9 pipeline between Sarnia, Ontario, and Montreal.

Under the plan, oil will now flow from Sarnia to Montreal. Enbridge will also increase the line’s capacity so it can handle heavy crude from Alberta’s oil sands.

It took longer than expected for regulators to sign off, so the project’s cost jumped to $800 million from its original estimate of $100 million. To put that in context, Enbridge earned $505 million in the latest quarter.

...