cn rail
We still think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying stocks with strong business prospects.
These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.
Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.
Here are 20 stocks we think meet those criteria:
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These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.
Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.
Here are 20 stocks we think meet those criteria:
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CANADIAN PACIFIC RAILWAY LTD., $230.28, Toronto symbol CP, earned a record $400 million in the three months ended September 30, 2014, up 20.8% from $331 million a year earlier. Earnings per share rose 22.9%, to $2.31 from $1.88, on fewer shares outstanding. Even so, that missed the consensus estimate of $2.39 a share. Revenue rose 8.9%, to a record $1.67 billion from $1.53 billion. CP saw strong revenue gains from shipping grain, crude oil, metals and consumer products. That offset declines in shipments of fertilizer, coal and automotive products....
ROYAL BANK OF CANADA, $80.80, Toronto symbol RY, earned $2.4 billion in the three months ended July 31, 2014, up 10.2% from $2.2 billion a year earlier. Per-share earnings rose 11.0%, to $1.62 from $1.46, on fewer shares outstanding. These figures exclude unusual items, such as a $40-million loss on the recent sale of Royal’s Jamaican banking operations. On this basis, the latest earnings beat the consensus estimate of $1.54 a share. Revenue jumped 25.2%, to $9.0 billion from $7.2 billion. The bank set aside $283 million to cover bad loans in the latest quarter, up 6.0%, from $267 million. That’s mainly due to higher provisions at its Caribbean and Canadian corporate lending operations....
BCE INC., $49.32, Toronto symbol BCE, has agreed to buy the 56% of BELL ALIANT INC., $30.93, Toronto symbol BA, that it doesn’t already own. Bell Aliant sells phone and Internet services to 2.3 million customers in Atlantic Canada and rural Ontario and Quebec. It also provides wireless services through an alliance with BCE. Bell Aliant shareholders will have three options when they tender their shares: $31.00 in cash; 0.6371 of a BCE common share; or $7.75 in cash plus 0.4778 of a BCE share. Investors can defer capital gains taxes on the BCE shares they receive until they sell....
CANADIAN PACIFIC RAILWAY LTD., $200.48, Toronto symbol CP, and CANADIAN NATIONAL RAILWAY CO., $67.94, Toronto symbol CNR, both stand to gain as a lack of pipeline capacity in Western Canada forces oil producers to ship crude by rail. In 2013, oil shipments accounted for just 6% of CP’s revenue and 4% of CN’s revenue. However, an oil industry group now expects rail shipments to jump from 200,000 barrels a day in 2013 to 700,000 by 2016. Both companies are upgrading their networks to handle the rising demand. As well, Ottawa recently brought in new rules to phase out older tanker cars, like the ones that exploded in the July 2013 train crash in Lac-Mégantic, Quebec. Oil producers own most of these cars, so they would have to pay for their replacements, not the railways....
CANADIAN NATIONAL RAILWAY CO. $64 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 824.5 million; Market cap: $52.8 billion; Price-to-sales ratio: 5.0; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,350-kilometre network stretches across the country and through the U.S. Midwest to the Gulf of Mexico.
Thanks to strong shipping volumes in the wake of the recession, CN’s revenue rose 43.5%, from $7.4 billion in 2009 to $10.6 billion in 2013.
Earnings jumped 68.4%, from $1.5 billion to $2.6 billion; while per-share earnings rose 88.9%, from $1.62 to $3.06, on fewer shares outstanding (all per-share amounts adjusted for a 2-for-1 stock split in November 2013).
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Thanks to strong shipping volumes in the wake of the recession, CN’s revenue rose 43.5%, from $7.4 billion in 2009 to $10.6 billion in 2013.
Earnings jumped 68.4%, from $1.5 billion to $2.6 billion; while per-share earnings rose 88.9%, from $1.62 to $3.06, on fewer shares outstanding (all per-share amounts adjusted for a 2-for-1 stock split in November 2013).
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ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $55 and ACO.Y [class II voting] $55; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $6.3 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.atco.com) has won a contract to operate a new camp for 1,500 potash miners in Saskatchewan....
CANADIAN NATIONAL RAILWAY CO. $64 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 824.5 million; Market cap: $52.8 billion; Price-to-sales ratio: 5.0; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway....
CANADIAN PACIFIC RAILWAY LTD., $171.19, Toronto symbol CP, reported better-than-expected earnings this week, despite harsh winter weather that cut shipping volumes and slowed deliveries. In the three months ended March 31, 2014, CP’s earnings rose 17.1%, to $254 million from $217 million a year earlier. Per-share earnings increased at a slower pace of 16.1%, to $1.44 from $1.24, on more shares outstanding. That beat the consensus estimate of $1.41. Revenue rose 0.9%, to $1.51 billion from $1.50 billion. That’s mainly due to higher revenue from shipping consumer and industrial products (up 10.8%) and grain (up 4.1%). These gains offset declines in major areas like fertilizers (down 11.8%), automotive products (down 9.3%), forest products (down 9.4%) and coal (down 0.7%)....
PLEASE NOTE: Due to the Good Friday holiday, our next Hotline will go out on Thursday, April 17, 2014. BANK OF NOVA SCOTIA, $64.24, Toronto symbol BNS, has formally changed the name of its ING Direct subsidiary to Tangerine (www.tangerine.ca). The bank bought ING Direct from its Netherlands-based parent, ING Group, in November 2012. This business provides no-fee banking services to 1.9 million clients, mainly over the Internet. The new name will let Bank of Nova Scotia keep using the orange colour associated with the ING Direct brand....