investment

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

In last Friday’s Wall Street Stock Forecaster Hotline, we analyzed the great results that McDonald’s Corp., $111.55, symbol MCD on New York (Shares outstanding: 941.8 million; Market cap: $105.7 billion; www.mcdonalds.com), reported for the three months ended September 30. It was a standout quarter, particularly compared to the weak results that many companies have reported this year.

The first media comment we saw on these results took the view that the stock had gone up enough to offset the improvement in its results. The investment reporter quoted what he called “cynical observers” who said “there was almost no way but up” for the stock. These observers pointed out that McDonald’s had trailed the market by 62 percentage points during a recent three-year period, and that the company had only registered growth in global same-store sales in one quarter out of the past seven.

The statistics in the last sentence are true. But when you analyze a stock, you can come to a wide range of conclusions, depending on the breadth of data you choose, and the beginning and end dates of the periods you look at.

McDonald’s stock price rose from pennies per share (adjusted for stock splits along the way) in the 1970s to a peak of $45 in 1999. Like a lot of high-quality stocks, it suffered in the first few years of the new millennium, and fell to as low as $12 in early 2003. Then it began another monumental rise.

It sailed through the 2008-2009 market downturn with barely a scratch. It hit an all-time high of $67 in August 2008. The following month, the U.S. federal government took control of mortgage giants Fannie Mae and Freddie Mac, and Lehman Brothers filed the largest bankruptcy case in U.S. history. McDonald’s fell on this news like the rest of the market. In October 2008, it hit $46, an 18-month low. The stock then resumed its rise and hit $100 in October 2011.

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Purpose Core Dividend Fund ETF, $24.97, symbol PDF on Toronto (Units outstanding: 8.2 million; Market cap: $204.8 million; www.purposeinvest.com), holds U.S. and Canadian stocks its managers see as being able to sustain and grow their dividends. The ETF yields 3.3%. The fund holds mostly high-quality companies. Its holdings include Rogers Communications, Peyto Exploration, CIBC, SNC-Lavalin, BCE, Altria Group, Bank of Montreal, General Motors and Philip Morris. The Purpose Core Dividend Fund ETF holds 61.0% of its funds in Canadian stocks, 36.6% in U.S. stocks and 2.4% in cash. Its breakdown by industry is as follows: Financials, 14.9%; Utilities, 14.7%; Energy, 14.5%; Real Estate, 14.4%; Consumer Discretionary, 12.3%; Telecom Services, 10.0%, Industrials, 7.5%; Consumer Staples, 5.2%; and Materials, 4.2%....

CHIPOTLE MEXICAN GRILL, $649.72, symbol CMG on New York, is a Denver-based Mexican restaurant chain. It charges slightly higher prices than fast food companies but offers better quality food, including naturally raised meat, and superior decor and service. The stock dropped almost 7% this week after Chipotle reported slowing sales growth and earnings that failed to meet expectations. In the three months ended September 30, 2015, the company’s sales rose 12.2%, to $1.22 billion from $1.08 billion a year earlier. Its restaurants attracted more customers during the quarter, pushing up same-restaurant sales by 2.6%. However, that was below the 4.3% increase in the preceding quarter and well short of a 19.8% jump a year earlier....

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

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $34.30 (Toronto symbol AP.UN; Units outstanding: 77.9 million; Market cap: $2.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.alliedreit.com) owns 146 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 10.5 million square feet of leasable area. Class I refers to 19th- and early-20th-century industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors.

Allied spent $400 million acquiring properties in 2012, $182.4 million in 2013 and $234.9 million in 2014. In the first half of 2015, it added three more for $136.1 million.

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RIOCAN REAL ESTATE INVESTMENT TRUST $25.78 (Toronto symbol REI.UN; Units outstanding: 318.8 million; Market cap: $8.1 billion; TSINetwork Rating: Average; Dividend yield: 5.5%; www.riocan.com) is Canada’s largest real estate investment trust.

In the three months ended June 30, 2015, RioCan’s revenue rose 6.3%, to $322.3 million from $303.2 million a year earlier. Cash flow per unit gained 2.4%, to $0.42 from $0.41.

The trust has now agreed to unwind its 50/50 joint venture with U.S.-based Kimco Realty. This business manages 35 malls across Canada.

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Canadian annuities offer a predictable source of income—but we advise against buying them.

The price of natural gas, like the price of oil, is highly volatile—and influenced both up and down by a wide range of factors. So it’s a bad idea to base investment decisions on predictions of future natural gas prices, and their effects on natural gas stock prices, because these predictions are simply not reliable.

However, you can profit nicely over long periods by investing in well-established or well-managed companies that are active in businesses that involve highly volatile commodities like oil and gas. You profit all the more if you buy these companies when they are cheap in relation to earnings and assets.

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