canadian tire

Every Monday we feature “A Stock to Sell” as our daily post. With every stock we recommend as a sell, we give you a full explanation of why we advise against investing in the stock at this time. Keyera Corp. (symbol KEY on Toronto; www.keyera.com), provides a number of services to the oil and gas industry, including gathering, processing, storage and transportation....

Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. We continue to advise against investing in bonds, because low interest rates hurt their appeal, while rising rates would push down their future value. For stable income and growth, we prefer high-yielding utilities. Their dividends also qualify for the dividend tax credit. ATCO LTD. (Toronto symbols ACO.X [class I non-voting] and ACO.Y [class II voting; www.atco.com) holds 53.2% of Canadian Utilities. It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energy exploration firms; Canadian Utilities owns the remaining 24.5%....

Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. IGM Financial is in a strong position to profit as baby boomers sign up for retirement planning services. The company also trades at a low multiple to its earnings and will probably raise its dividend in 2015. IGM FINANCIAL INC. (Toronto symbol IGM; www.igmfinancial.com) is Canada’s largest independent mutual fund firm. Power Financial owns 58.7% of IGM, along with 67.0% of Great-West....

CANADIAN TIRE CORP., $108.49, Toronto symbol CTC.A, earned $169.9 million in the quarter ended June 28, 2014, up 9.7% from $154.9 million a year earlier. Earnings per share gained 11.0%, to $2.12 from $1.91, on fewer shares outstanding. That easily beat the consensus estimate of $2.02. Overall sales rose 4.8%, to $3.2 billion from $3.0 billion. Strong demand for spring-related goods, such as garden tools, auto supplies and bicycles, increased same-store sales by 2.8% at the 493 Canadian Tire outlets....

Every Tuesday we bring you “Best Canadian Stocks” as our daily post. In these posts, you get our specific recommendation on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves that are profiled in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. “Best Canadian Stocks” is part of our new approach offering you regular buy, hold and sell advice in our daily posts. Every week you get “A Stock to Sell” on Monday, “Our Top U.S. Stocks” on Thursday and on Friday, our advice on one of the stocks our Inner Circle members have asked about in their weekly Question & Answer sessions. A key part of successful investing involves picking stocks with hard-to-replace assets, like popular brand names....

CANADIAN TIRE CORP. $103 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.7 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 492 Canadian Tire stores, which specialize in automotive, household and sporting goods. It also owns other retail chains, such as Mark’s (casual clothing) and SportChek.

The company is selling 20% of its credit card operations to Bank of Nova Scotia (see page 74) for $500 million. Canadian Tire has an option to sell an additional 29% to the bank over the next 10 years.

Meanwhile, Canadian Tire earned $70.6 million in the quarter ended March 29, 2014, down 3.3% from $73.0 million a year earlier. Earnings per share fell 2.2%, to $0.88 from $0.90, on fewer shares outstanding.

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A key part of successful investing involves picking stocks with hard-to-replace assets, like popular brand names. Canadian Tire and Tim Hortons are two leading examples. Both firms have built their brands over decades, and both have become synonymous with Canada. That gives them a big advantage when launching new products and competing with bigger U.S. chains. CANADIAN TIRE CORP. $103 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.7 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 492 Canadian Tire stores, which specialize in automotive, household and sporting goods. It also owns other retail chains, such as Mark’s (casual clothing) and SportChek....

BANK OF NOVA SCOTIA $70.50 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $85.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%, www.scotiabank.com) has agreed to buy 20% of the credit card division of Canadian Tire Corp. (Toronto symbol CTC.A and a recommendation of The Successful Investor).

This business is Canada’s eighth-largest credit card issuer, with 1.8 million clients and $4.4 billion in outstanding loans. Its cardholders spend $1.2 billion annually.

The bank will pay $500 million for this stake, and Canadian Tire has an option to sell an additional 29% to Bank of Nova Scotia over the next 10 years.

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RIOCAN REAL ESTATE INVESTMENT TRUST $27.64 (Toronto symbol REI.UN; Units outstanding: 304.4 million; Market cap: $8.4 billion; TSINetwork Rating: Average; Dividend yield: 5.1%; www.riocan.com) is Canada’s largest real estate
investment trust (REIT), with interests in 340 shopping malls containing over 82 million square feet of leasable area. That total includes 47 U.S. malls with over 13 million square feet.

In the three months ended March 31, 2014, RioCan’s revenue increased 6.4%, to $299 million from $281 million a year earlier. Cash flow per unit rose 2.4%, to $0.42 from $0.41, on more units outstanding.

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RIOCAN REAL ESTATE INVESTMENT TRUST (Toronto symbol REI.UN; www.riocan.com) is Canada’s largest real estate investment trust (REIT), with interests in 340 shopping malls containing over 82 million square feet of leasable area. That total includes 47 U.S. malls with over 13 million square feet. In the three months ended March 31, 2014, RioCan’s revenue increased 6.4%, to $299 million from $281 million a year earlier. Cash flow per unit rose 2.4%, to $0.42 from $0.41, on more units outstanding. RioCan continues to see growth opportunities in Canada and the U.S. In 2013, it spent $849 million on 32 properties. In the first quarter of 2014, it bought two more for a total of $21 million....