Toronto-Dominion Bank

AIMIA INC. $17.56 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 173.0 million; Market cap: $3.0 billion; Dividend yield: 3.9%) owns and operates Aeroplan, Canada’s largest loyalty program, with over 4.6 million members who collect Aeroplan miles from participating companies. Members can exchange miles for flights, car rentals, hotel rooms and merchandise.

Aimia also owns Nectar, the U.K.’s biggest loyalty program. In addition, it has interests in Air Miles Middle East and Nectar Italia, as well as Club Premier, the leading loyalty program in Mexico.

In the three months ended December 31, 2013, Aimia’s revenue rose 1.4%, to $687.6 million from $678.2 million a year earlier. Excluding one-time items, earnings per share fell 5.8%, to $0.49 from $0.52. The earnings decline was due to an increase in the company’s cost per mile, mostly because its expenses rose as it expanded its operations.

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ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $24.40 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.55%. It yields 3.8%.

The fund’s top holdings are CIBC, 7.0%; TD Bank, 6.3%; National Bank, 6.2%; Bonterra Energy, 6.0%; Bank of Montreal, 5.6%; Royal Bank, 5.1%; BCE, 4.3%; AG Growth International, 4.3%; and IGM Financial, 3.9%.

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iShares 1-5 Year Laddered Corporate Bond Index ETF, $19.82, symbol CBO on Toronto (Units outstanding: 93.1 million; Market cap: $1.8 billion; ca.ishares.com), invests in a portfolio of short-term bonds drawn from the DEX (formerly Scotia Capital) Bond Index. The ETF first sold units to the public at $20 each and began trading on Toronto on February 25, 2009. Its MER is 0.28%, and it currently yields 4.2%....

Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.

ETFs trade on stock exchanges, just like stocks....

ROYAL BANK OF CANADA, $72.16, Toronto symbol RY, earned $2.1 billion in the quarter ended January 31, 2014, up 2.2% from $2.05 billion a year earlier. Per-share earnings rose 3.0%, to $1.38 from $1.34, on fewer shares outstanding. Excluding a loss on the sale of its Jamaican banking operations, Royal earned $1.44 share in the latest quarter, matching the consensus forecast. Overall revenue rose 7.6%, to $8.5 billion from $7.6 billion. Revenue at Royal’s retail banking division (which supplied 40% of the total) rose 6.9%. That’s partly due to its February 2013 purchase of Ally Financial’s Canadian operations for $3.7 billion. Ally, which provides car loans through 1,600 dealerships, contributed $62 million to Royal’s revenue and $22 million to its earnings in the latest quarter. Higher demand for mortgages and consumer and business loans also contributed to the improved results....

TD Bank recently overtook Royal Bank as Canada’s largest bank by assets. That’s partly because it has spent about $20 billion in the past three years buying other businesses.

Growth by acquisition is riskier than internal growth, as acquisitions carry an above-average chance of unpleasant surprises....

PLEASE NOTE: One week from today, on January 31, 2014, shortly after the stock market closes at 4:00 p.m. Toronto time, we will reveal our #1 U.S. Stock of 2014 to subscribers of Wall Street Stock Forecaster. You can be among the first to hear about our #1 pick for 2014. Because you’re a loyal subscriber, we are happy to offer you a bargain-priced, no-risk introduction to Wall Street Stock Forecaster. It gives you the first month—and the 2014 Stock of the Year—FREE. But you must act now. Click here. CAE INC., $14.24, Toronto symbol CAE, announced this week that it has sold five flight simulators to Air Canada and four other customers. In all, these orders are worth $70 million. That’s equal to 3% of CAE’s annual revenue of $2.2 billion....

Canoe EIT Income Fund, $11.99, symbol EIT.UN on Toronto (Units outstanding: 89.9 million; Market cap: $1.1 billion; www.canoefinancial.com), changed its name from EnerVest Diversified Income Trust in November 2013. The stock symbol remained the same. Canoe EIT is a closed-end fund that invests in a portfolio of stocks that are mainly listed on the Toronto exchange, with a focus on dividend income. The fund trades at a 16.6% discount to its net asset value and has an MER of 1.45%. The fund’s top holdings are TD Bank, Bank of Nova Scotia, Royal Bank of Canada, CN Rail, Crescent Point Energy, Telus, Microsoft, Boeing, Encana and Wells Fargo. Canoe EIT has 33.8% of its assets in finance stocks and 25.1% in oil and gas firms....

SHERRITT INTERNATIONAL CORP., $3.70, symbol S on Toronto, has announced that it plans to sell all of its coal interests. A group led by Altius Minerals (symbol ALS on Toronto) will buy Sherritt’s development-stage coal projects and mining royalties for cash of $481 million. In addition, Westmoreland Coal (symbol WLB on Nasdaq) will purchase Sherritt’s operating coal mines for cash of $312 million. Westmoreland will also assume $153 million of equipment lease obligations. These sales will let Sherritt focus on its nickel, cobalt and oil interests and pay down some of its $2.1-billion debt....

ISHARES MSCI CANADA INDEX FUND $28.59 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.49% MER.

The index’s top holdings are Royal Bank, 7.4%; TD Bank, 6.5%; Bank of Nova Scotia, 5.7%; Suncor Energy, 4.0%; CN Railway, 3.7%; Bank of Montreal, 3.5%; Manulife Financial, 2.7%; Canadian Natural Resources, 2.7%; CIBC, 2.7%; Valeant Pharmaceuticals, 2.7%; and Enbridge, 2.5%.

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