spin off

ARAMARK CORP. $38 is a buy. The company (New York symbol ARMK; Manufacturing sector; Shares outstanding: 261.1 million; Market cap: $9.9 billion; Dividend yield: 1.2%; Takeover Target Rating: Medium; www.aramark.com) plans to spin off its uniform business as a separate, publicly traded firm called Vestis....

Over the span of 100 years, General Electric became one of the world’s largest conglomerates through a series of acquisitions, including many that were outside its main electrical products businesses such as insurance and broadcast TV networks.


After the 2008 financial crisis, GE decided to unwind its financial services businesses....

TECK RESOURCES LTD. $57 remains a buy. The company (Toronto symbol TECK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 515.0 million; Market cap: $29.4 billion; Price-to-sales ratio: 2.0; Dividend yield: 0.9%; TSINetwork Rating: Extra Risk; www.teck.com) continues to examine ways to re-organize its operations into two separate firms—one would focus on metallurgical coal (a key ingredient in steelmaking), while the other would hold its copper, zinc and other mines.


The company cancelled a proposal to spin off the coal operations earlier this year due to shareholder opposition....

Given government mandates to cut greenhouse gas emissions, these three utility companies continue to invest in renewable power. That should lift their appeal for big institutional investors, which increasingly focus on ESG (environmental, social, and governance) scores.


While most renewable energy projects rely on government subsidies, these three draw almost all of their earnings from regulated operations (including renewable projects)....

CANADIAN SOLAR INC., $26.25, symbol CSIQ on Nasdaq, is one of the world’s largest manufacturers of solar photovoltaic modules and solar energy and battery storage solutions. Founded in 2001, it went public in 2006, selling shares at $15 each.

On August 17, 2023, the Ontario-based company announced it would deliver 1,200 megawatt hours of energy storage solutions to its Papago Storage project in Arizona....

ROYAL BANK OF CANADA, $122.85, Toronto symbol RY, is a buy.

Canada’s largest bank by market capitalization raised your quarterly dividend by 2.3% with the August 2023 payment. Investors now receive $1.35 a share instead of $1.32. The new annual rate of $5.40 yields a solid 4.4%.

The bank continues to benefit from higher interest income on its loans due to higher interest rates....

We’ve long told our readers that spinoffs are a great way for companies to unlock hidden value for their shareholders. A recent example is General Electric, which is breaking up into three smaller firms. GE is now up 35% since it announced that plan in November 2021; its new spinoff GE HealthCare has gained 20%....

SUNCOR ENERGY INC., $44.84, Toronto symbol SU, is a buy.

The company is Canada’s largest integrated oil firm, with major projects in the Alberta oil sands. It also operates four refineries (three in Canada and one in Colorado), along with 1,875 Petro-Canada gas stations.

Suncor’s average daily oil production in the three months ended June 30, 2023, rose 3.0%, to 741,900 barrels a day from 720,200 a year earlier....

You Can See Our Spinoff Stock Portfolio For September 2023 Here.

Why we like spinoffs so much
We think that spinoffs are the closest thing you can find to a sure thing for two main reasons:


1) The management of a parent company will only hand out shares in a subsidiary to its own investors if it’s all but certain that business, and the parent, will be better off after the spinoff.


2) Spinoffs involve a lot of work and legal fees....

NCR CORP. $29 is a buy for aggressive investors. The company (New York symbol NCR; Manufacturing & Industry sector; Shares outstanding: 140.9 million; Market cap: $4.1 billion; No dividend paid; Takeover Target Rating: Medium; www.ncr.com) plans to split into two separate firms by the end of 2023....