royal bank

BMO DIVIDEND FUND $50.87 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) currently holds about 58.3% of its portfolio in the Financial services industry. Its largest holding is Energy at 16.1%. BMO Dividend Fund’s largest holdings are Manulife Financial, Bank of Nova Scotia, CIBC, Royal Bank of Canada, Enbridge, Toronto-Dominion Bank, Canadian National Railway, TransCanada Corporation, Imperial Oil, Brookfield Asset Management, Thomson Corporation, BCE Inc. and Sun Life Financial. Over the last five years, the $5.7 billion BMO Dividend Fund has posted a 13.2% annual rate of return. That’s just under the S&P/TSX 60’s gain of 13.4%. The fund gained 9.9% over the last year, compared to a gain of 15.0% for the S&P/TSX 60. BMO Dividend’s MER is 1.73%....

BMO Dividend and Royal Dividend hold mostly high-quality stocks. These stocks sometimes run into deep trouble and go through lengthy struggles, just like lesser investments. Eventually, though, most solve their problems and go on to thrive anew. Both funds hold a high proportion of their assets in financial services stocks. However, if you must focus on something, finance is a relatively stable sector. If you do invest in these funds, be sure to adjust the rest of your portfolio so these funds won’t overly concentrate your holdings in the financial sector....

FIDELITY CANADIAN LARGE CAP FUND $26.55 (CWA Rating: Conservative) (Fidelity Investments Canada, 483 Bay St., Suite 200, Toronto, Ont. M5G 2N7. 1-800-263-4077; Web site: www.fidelity.ca. Load fund — available from brokers) invests mostly in large-sized firms like those on the S&P/TSE Index, although it may also invest in small and mid-cap stocks. The top holdings of the $416.3 million Fidelity Canadian Large Cap Fund are Royal Bank of Canada, Suncor Energy, Manulife Financial, Bank of Nova Scotia, Bank of Montreal, Research in Motion, Western Oil Sands, CIBC, Rogers Communications and Toronto-Dominion Bank. The fund is diversified by industry sector as follows: 38.3% in Financials, 21.7% in Energy, 17.1% in Materials, 6.2% in Information technology, 5.9% in Consumer discretionary, 4.2% in Telecommunication services, 3.8% in Industrials, and 2.3% in Consumer staples....

ROYAL BANK OF CANADA $57 (Toronto symbol RY) earned $1.14 a share in its first fiscal quarter ended January 31, 2007, up 28.1% from $0.89 a year earlier, thanks to strong gains at both its Canadian and U.S. operations. The bank also raised its quarterly dividend 15%, from $0.40 a share to $0.46. It now yields 3.2%. The current rate is 35% of earnings, which is below Royal’s target of between 40% and 50%, so further hikes seem likely. Buy. CANADIAN PACIFIC RAILWAY LTD. $63 (Toronto symbol CP) has increased its quarterly dividend four times in the past three years. The new annual rate of $0.90 yields 1.4%. The company also increased its latest share repurchase authorization by 10% over 2006. Best Buy. CAE INC. $12 (Toronto symbol CAE) has sold 33 flight simulators to civilian airlines so far in fiscal 2007 (fiscal years end March 31). That’s a 57% gain over the 21 simulators it sold in fiscal 2006. The company’s pilot training business is also in a good position to profit from rising demand for new pilots, particularly in Asia. Buy....

TEMPLETON GROWTH FUND $12.94 (CWA Rating: Conservative) (Franklin Templeton Management Limited, 1 Adelaide Street East, Suite 2101, Toronto, ON. M5C 3B8. 1-800-387-0830; Web site: www.templeton.ca. Buy or sell through brokers) is invested 33.5% in the U.S., 14.4% in the UK, 8% in the Netherlands, 7% in Japan, 5.4% in Spain, 3.8% in Singapore, 3.8% in Switzerland, 3.1% in Germany and 2.8% in Hong Kong. The fund’s top holdings include Banco Santander Central Hispano SA (Spanish bank), Royal Dutch Shell (Netherlands oil & gas), Koninklijke Philips Electronics NV (Netherlands consumer electronic & electrical products), Cheung Kong Holdings (Hong Kong conglomerate), GlaxoSmithKline plc (UK pharmaceutical), Repsol YPF SA (Spanish oil & gas), Unilever NV (global packaged consumer goods), Merck & Co. Inc. (U.S. pharmaceuticals), ING Groep NV (Dutch financial services) and DBS Group Holdings (Singapore-based banking). The fund made 19.4% over the last year, compared to a gain of 20.5% for the benchmark Morgan Stanley Index. The fund’s MER is 2.35%....

ACCORD FINANCIAL CORP. $7.90 (Toronto symbol ACD; SI Rating: Speculative) (416-961-0007; www.accordfinancial.com; Shares outstanding: 9.4 million; Market cap: $74.3 million) is in the factoring business in Canada and the U.S. Factoring is the purchase of a company’s accounts receivable at a discount. Accord profits by collecting the receivables. Accord can also handle a company’s credit-checking, record-keeping and collections. Most of its customers fail to meet bank lending standards. In Canada, the company focuses on textiles, footwear and other “soft goods” industries. In the U.S. it services a wider range of industries. Besides factoring, Accord and its subsidiaries also offer asset-based lending services. In the three months ended September 30, 2006, Accord’s revenues rose 4.5%, to $7 million from $6.7 million. Earnings rose 45.6%, to $1.5 million or $0.15 a share, from $1 million or $0.10 a share. Cash flow rose 31.6%, to $2.4 million or $0.25 a share, from $1.8 million or $0.18 a share. Accord’s shares yield 2.8%....

SCOTIA CANADIAN GROWTH FUND $69.01 (CWA Rating: Conservative) (Scotia Securities, 40 King Street West, 6th Floor, Toronto, Ontario M5H 1H1. 1-800-268-9 269; Website: www.scotiabank.com. No load — deal directly with the company.) uses fundamental analysis to identify what the managers see as investments that have the potential for above-average growth. The $609.0 million Scotia Canadian Growth Fund’s 10 largest holdings are Manulife, Suncor Energy, Royal Bank, TD Bank, Goldcorp, Petro-Canada, CN Railway, CIBC, Sun Life Financial and EnCana. Scotia Canadian Growth currently holds 31.5% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 19.7%....

BMO EQUITY FUND $31.63 (BMO Mutual Funds, 77 King Street West, Suite 4200, Royal Trust Tower, Toronto, Ont., M5K 1J5, 1-800-665-7700; Web site: www.bmo.com. No load — deal directly with the bank) (CWA Rating: Conservative) generally invests in the shares of 20 to 40 “blue-chip” Canadian companies. These stocks are selected based on the manager’s outlook for the industry they operate in, the earnings record of each company, the strength of management, and the potential for growth. BMO Equity Fund’s 10 largest holdings are Manulife Financial, Suncor Energy, Royal Bank, TD Bank, Sun Life Financial, EnCana Corporation, Barrick Gold, CIBC, Bank of Nova Scotia and Telus. The $2.2 billion fund currently holds 35.9% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 20.0%....

RBC CANADIAN EQUITY FUND $27.30 (CWA Rating: Conservative) (RBC Funds, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.royalbank.com. No load — deal directly with the bank) invests mostly in larger-capitalization stocks, but also looks for opportunities in small and mid-cap stocks. The fund’s 10 largest holdings are TD Bank, Manulife Financial, Bank of Nova Scotia, Royal Bank, EnCana, Barrick Gold, CN Railway, CIBC, Suncor Energy and Bank of Montreal. The $4.7 billion fund holds 31.6% of its holdings in Financial stocks. It also holds 21.5% in Energy stocks....

TD CANADIAN EQUITY FUND $30.40 (CWA Rating: Conservative) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-463-3863; Web site: www.tdcanadatrust.ca. No load — deal directly with the bank) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify undervalued companies with strong growth potential. TD Canadian Equity Fund’s 10 largest holdings are Bank of Nova Scotia, Suncor Energy, Royal Bank, TD Bank, Rogers Communications, Canadian Oil Sands Trust, CN Railway, Tim Hortons, Canadian Natural Resources and Teck Cominco. The $2.9 billion fund currently holds about 28.0% of its portfolio in Financial services shares. It also has a bias towards Energy stocks, with 21.7% of its holdings in that sector....