investment
An investment is an asset or property acquired to generate income or gain appreciation. Appreciation is the increase in the value of an asset over time. It requires the outlay of a resource today, like time, effort, and money, for a greater payoff in the future or for generating a profit.
An investment involves using capital in the present to increase an asset’s value over time.
Investments may include bonds, stocks, real estate, or alternative investments.
Investments can be diversified to reduce risk, though this may reduce the amount of earning potential.
In business contexts, investments are financial; however, consider how some people spend time to make higher incomes in the future (i.e. invest in a college education).
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Pat McKeough responds to many personal questions on buying stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. This past week, an Inner Circle member asked us about a company that clearly benefits when the global economy is doing well. This American heavy-equipment manufacturer already makes the majority of its sales outside the U.S. and it’s looking to developing economies to fuel even more growth....
H&R REAL ESTATE INVESTMENT TRUST $24.16 (Toronto symbol HR.UN; Units outstanding: 181.0 million; Market cap: $4.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.8%; www.hr-reit.com) and Dundee REIT (Toronto symbol D.UN) have agreed to buy Scotia Plaza, a 68-storey office building in downtown Toronto, from Bank of Nova Scotia (see page 41) for $1.3 billion.
Dundee REIT will own two-thirds of the property, and H&R will own the remaining third.
Scotia Plaza contains about 2 million square feet of office and retail space across four connected buildings. Scotiabank will remain as the anchor tenant.
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Dundee REIT will own two-thirds of the property, and H&R will own the remaining third.
Scotia Plaza contains about 2 million square feet of office and retail space across four connected buildings. Scotiabank will remain as the anchor tenant.
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PRIMARIS RETAIL REAL ESTATE INVESTMENT TRUST $22.79 (Toronto symbol PMZ.UN; Units outstanding: 87.8 million; Market cap: $2.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.4%; www.primarisreit.com) owns large malls in medium-sized Canadian cities and suburban areas. In all, it owns 33 properties that contain 13.7 million square feet of leasable area.
Primaris has 43% of its properties in Ontario, followed by Alberta, 16%; B.C., 14%; Quebec, 14%; Saskatchewan, 9%; Manitoba, 3% and New Brunswick, 1%. Primaris has a 96.7% occupancy rate.
In the quarter ended March 31, 2012, acquisitions pushed up Primaris’s revenue by 22.6%, to $100.4 million from $81.9 million a year earlier. Cash flow rose 30.8%, to $32.7 million from $25.0 million. Cash flow per unit rose 8.3%, to $0.393 from $0.363, on more units outstanding. The trust yields 5.4%.
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Primaris has 43% of its properties in Ontario, followed by Alberta, 16%; B.C., 14%; Quebec, 14%; Saskatchewan, 9%; Manitoba, 3% and New Brunswick, 1%. Primaris has a 96.7% occupancy rate.
In the quarter ended March 31, 2012, acquisitions pushed up Primaris’s revenue by 22.6%, to $100.4 million from $81.9 million a year earlier. Cash flow rose 30.8%, to $32.7 million from $25.0 million. Cash flow per unit rose 8.3%, to $0.393 from $0.363, on more units outstanding. The trust yields 5.4%.
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RIOCAN REAL ESTATE INVESTMENT TRUST $26.57 (Toronto symbol REI.UN; Units outstanding: 285.0 million; Market cap: $7.6 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.riocan.com) is Canada’s largest REIT. It has interests in 333 shopping malls in Canada, including 10 under development. These properties contain over 91 million square feet of leasable area.
RioCan also owns stakes in 46 malls in the U.S. through joint ventures. In addition, it owns 14% of Cedar Shopping Centers, a U.S. REIT whose malls are mainly in the northeastern U.S.
In the quarter ended March 31, 2012, RioCan’s revenue rose 15.6%, to $274 million from $237 million a year earlier. Cash flow per unit rose 5.7%, to $0.37 from $0.35. The units yield 5.2%.
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RioCan also owns stakes in 46 malls in the U.S. through joint ventures. In addition, it owns 14% of Cedar Shopping Centers, a U.S. REIT whose malls are mainly in the northeastern U.S.
In the quarter ended March 31, 2012, RioCan’s revenue rose 15.6%, to $274 million from $237 million a year earlier. Cash flow per unit rose 5.7%, to $0.37 from $0.35. The units yield 5.2%.
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BCE INC. $41.54 (Toronto symbol BCE; Shares outstanding: 773.6 million; Market cap: $32.1 billion; TSINetwork Rating: Above Average; Dividend yield: 5.2%; www.bce.ca) is teaming up with a group of other investors, including the Ontario Teachers’ Pension Plan, to buy privately held Q9 networks Inc.
Toronto-based Q9 provides data-storage and web-hosting services to businesses across Canada. It has 11 data centres in Ontario, Alberta and B.C.
This investment will help BCE take advantage of growing demand from business clients for reliable cloud-computing services (the general term for shifting software and data off of users’ machines and onto service providers’ machines via the Internet). The company already operates six data centres. It will open a seventh later this year.
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Toronto-based Q9 provides data-storage and web-hosting services to businesses across Canada. It has 11 data centres in Ontario, Alberta and B.C.
This investment will help BCE take advantage of growing demand from business clients for reliable cloud-computing services (the general term for shifting software and data off of users’ machines and onto service providers’ machines via the Internet). The company already operates six data centres. It will open a seventh later this year.
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BANK OF NOVA SCOTIA $52.20 (Toronto symbol BNS: Shares outstanding: 1.1 billion; Market cap: $57.4 billion; TSINetwork Rating: Above Average; Div. yield: 4.2%, www.scotiabank.com) is the third-largest of Canada’s five big banks, with assets of $659.7 billion.
Without one-time items, the bank earned $1.15 a share in the quarter ended April 30, 2012, up 8.5% from $1.06 a share a year earlier. It is also setting aside less money to cover bad loans: loan-loss provisions fell 2.2%, to $264 million from $270 million a year ago.
The Canadian banking division’s earnings jumped 23.3% due to an increase in deposits and higher demand for loans. The division also did a good job of controlling its costs.
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Without one-time items, the bank earned $1.15 a share in the quarter ended April 30, 2012, up 8.5% from $1.06 a share a year earlier. It is also setting aside less money to cover bad loans: loan-loss provisions fell 2.2%, to $264 million from $270 million a year ago.
The Canadian banking division’s earnings jumped 23.3% due to an increase in deposits and higher demand for loans. The division also did a good job of controlling its costs.
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MART RESOURCES, $1.36, symbol MMT on Toronto, jumped over 28% this week after the company declared a special dividend of $0.10 a share, payable on August 8, 2012. Mart will then begin paying quarterly dividends of $0.05 a share starting in September 2012. The stock is now up 288.6% since we first recommended it in our May 2010 issue at $0.35. Mart is focused on developing, producing and drilling for oil at its properties in Africa. The company is currently producing oil at its 50%-held Umusadege field in Nigeria....
Dundee International REIT, $9.85, symbol DI.UN on Toronto (Units outstanding: 48.5 million; Market cap: $477.7 million; www.dundeeinternational.com), is the only Canadian real estate investment trust that focuses exclusively on investing outside Canada. Dundee International aims to grow by acquiring different types of properties in certain European countries, starting with Germany. Right now the trust owns 295 commercial properties that contain a total of 12.6 million square feet. In all, these buildings have an 87.8% occupancy rate....
Canadian Apartment Properties REIT, $23.72, symbol CAR.UN on Toronto (Units outstanding: 93.2 million; Market cap: $2.2 billion; www.capreit.net), is a real estate investment trust that owns multi-unit residential properties, including apartment buildings and townhouses. In all, CAP REIT owns 30,878 residential suites. Ontario accounts for 65.7% of its holdings, followed by Quebec (16.6%), B.C. (8.9%), Alberta (4.5%), Nova Scotia (3.5%) and Saskatchewan (0.8%). In the three months ended March 31, 2012, CAP REIT sold a 136-suite apartment building in Toronto for $17.5 million. Even without this building’s contribution, the trust’s revenue rose 10.3% in the quarter, to $95.3 million from $86.3 million a year earlier. That’s mainly due to acquisitions that CAP REIT made in 2011, plus a 1.6% rise in average monthly rents. Its occupancy rate was unchanged at 98.3%....
This is the latest in a series of video interviews in which Pat McKeough gives his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and in still others he serves as an investment counsellor as he discusses events that are affecting the markets and the economy. That’s his role this week as he discusses the anxiety many have about the ongoing crisis in Greece. Pat turns the general sense of pessimism on its head—the markets frequently move up before crises are solved, while there’s often more cause to worry when things look good. And he adds an optimistic postscript about energy in the years ahead.
The Crisis in Greece: Be Ready for an Upturn...
The Crisis in Greece: Be Ready for an Upturn...