canadian tire
Toronto symbol CTC.A, operates stores that sell automotive, household and sporting goods. It also operates PartSource auto parts stores, Mark’s Work Wearhouse casual clothing stores and gas stations.
PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $20.25 (Toronto symbol PMZ.UN; Units outstanding: 68.6 million; Market cap: $1.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.0%) owns large malls in medium-sized Canadian cities. It also owns major shopping centres in suburbs of large cities. In all, the trust owns 29 properties that contain 11.1 million square feet of leasable area. Primaris has a 97.0% occupancy rate. Its major tenants include Hudson’s Bay Company, Sears, Shoppers Drug Mart, Loblaw, Reitmans, Canadian Tire and Best Buy. In June 2010, Primaris raised $85.2 million in a unit issue. In August 2010, it used the funds to help pay for the Cataraqui Town Centre, an enclosed shopping mall in Kingston, Ontario....
Real estate investment trusts (REITs) are exempt from Ottawa’s income-trust tax, which came into effect January 1, 2011. That exemption is making REITs’ high yields more attractive as trusts convert to corporations or cut their distributions in response to the new tax. Our REIT recommendations have all moved up, but we still think they offer attractive long-term returns at relatively low risk. ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $21.54 (Toronto symbol AP.UN; Units outstanding: 42 million; Market cap: $904.4 million; TSINetwork Rating: Extra Risk; Dividend yield: 6.1%) owns office buildings in Toronto, Montreal, Quebec City and Winnipeg. These mainly Class I properties contain over 6.3 million square feet of leasable area. Class I refers to 19th and early 20th-century light industrial buildings that have been restored and converted to office and retail space. These properties usually feature high ceilings, natural light, exposed beams, interior brick and hardwood floors....
When you practice a “dollar-cost averaging” investing strategy, you invest equal amounts of money (say $300 a month) over a specific period. It’s a little like systematic saving, except you put your money into stocks instead of a bank account. (Dollar-cost averaging is one of many low-risk strategies you’ll learn about in our new free report, Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money & Cutting Risk. Click here to download yours right away.)
Investing strategy: How dollar-cost averaging can help you profit from long-term market trends
...
The Canadian retailing industry is intensely competitive. That’s why we prefer to focus on well-established retailers, such as the five we analyze below. Their high market shares and strong brands give them an edge. As well, all five trade at reasonable multiples to earnings. However, not all are buys right now. LOBLAW COMPANIES LTD. $41 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 279.5 million; Market cap: $11.5 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer. It now has around 1,000 company-owned and franchised stores. Loblaw continues to restructure its business, including upgrading its inventory-management systems and streamlining its distribution networks....
RIOCAN REAL ESTATE INVESTMENT TRUST $22 (Toronto symbol REI.UN; Units outstanding: 252.3 million; Market cap: $5.6 billion; Price-to-sales ratio: 6.3; Dividend yield: 6.3%; TSINetwork Rating: Average; www.riocan.com) operates 289 retail properties in Canada, mainly outdoor shopping malls. It also owns 28 malls in the U.S. through a joint venture it formed in 2009 with Cedar Shopping Centers Inc. (New York symbol CDR). RioCan owns 80% of this joint venture, and 14% of Cedar. The contribution from the new U.S. malls was the main reason why RioCan’s earnings rose 37.7%, to $39.2 million, in the three months ended September 30, 2010. A year earlier, the trust earned $28.4 million. Earnings per unit rose 33.3%, to $0.16 from $0.12, on more units outstanding. Cash flow per unit rose 20.0%, to $0.36 from $0.30. Revenue rose 14.6%, to $216.6 million from $189.0 million. RioCan pays monthly distributions of $0.115 a unit. The annual rate of $1.38 yields 6.3%. The trust paid out 95.4% of its cash flow in the past quarter. However, 16.0% of its investors prefer to receive new units instead of cash. On this basis, RioCan’s actual cash payout was a more reasonable 80.1% of its cash flow....
CGI GROUP INC., $16.68, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. The company’s services help its customers automate certain routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses. This week, the company reported earnings that exceeded the consensus estimate. This caused the stock to gain 8%. On August 17, 2010, CGI paid $923.2 million for Stanley Inc., which provides computer-outsourcing services to military and civilian agencies of the U.S. government. If you exclude costs to integrate these new operations, the company earned $342.0 million in its 2010 fiscal year, which ended September 30, 2010. That’s up 14.0% from $300.0 million a year earlier....
PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $20.15 (Toronto symbol PMZ.UN; Units outstanding: 68.5 million; Market cap: $1.4 billion; SI Rating: Extra Risk; Dividend yield: 6.1%) owns large malls in medium-sized Canadian cities. It also owns major shopping centres in suburbs of large cities. In all, the trust owns 29 properties that contain 11.1 million square feet of leasable area. Primaris has a 96.6% occupancy rate. Its major tenants include Hudson’s Bay Company, Sears, Shoppers Drug Mart, Loblaw, Reitmans, Canadian Tire and Best Buy. In the three months ended June 30, 2010, Primaris’s revenue rose 14.5%, to $76.4 million from $66.8 million a year earlier. Cash flow per unit rose 5.9%, to $0.36 from $0.34. the trust’s annual distribution of $1.22 gives the units a 6.1% yield....
Most of our real estate investment trust (REIT) recommendations, including the two below, have moved up lately. REITs are exempt from Ottawa’s income-trust tax, which comes into effect on January 1, 2011. That’s making their high yields increasingly attractive as many trusts convert to corporations, or cut their distributions. Even though their prices have risen, we still think the best REITs offer attractive long-term returns at relatively low risk. ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $22.28 (Toronto symbol AP.UN; Units outstanding: 42 million; Market cap: $934.8 million; SI Rating: Extra Risk; Dividend yield: 5.9%) owns office buildings in Toronto, Montreal, Quebec City and Winnipeg. These mainly Class I properties contain over 5.9 million square feet of leasable area. Class I refers to 19th and early 20th-century light industrial buildings that have been restored and converted to office and retail space. These properties usually feature high ceilings, natural light, exposed beams, interior brick and hardwood floors....
POTASH CORP. OF SASKATCHEWAN, $151.59, Toronto symbol POT, continues to trade above the $130.00 U.S.-a-share hostile takeover offer from BHP Billiton Ltd. (New York symbol BHP). That’s partly due to rumours that Potash Corp.’s management is planning to buy a majority interest in the company using borrowed funds. Some of these funds would probably come from several Chinese firms, as well as some sovereign wealth funds from China and other countries. (Sovereign wealth funds are state-owned investment funds that are usually financed by an economic surplus.) However, sovereign wealth funds would only hold a minority stake in Potash Corp. That would help the buyers win regulatory approval for a takeover....
Many Canadian firms have tried to expand into the U.S. over the years. Some, like Royal Bank of Canada (symbol RY on Toronto) have had difficulty in the United States. Other companies’ expansion efforts have failed miserably. Canadian Tire (symbol CTC.A on Toronto) provides a memorable example of a failed U.S. expansion. In 1982, the retailer bought a chain of Whites automotive-retail stores in Texas. By 1985, Canadian Tire had lost $300 million on this purchase. That’s when the company decided to sell the division and retreat to Canada. Its stock price has since gone up more than 360%. Canadian Tire is one of the stocks we cover in our Successful Investor newsletter.