Toronto-Dominion Bank
Canada’s big five banks have avoided the problems with subprime mortgages and European sovereign debt that have crippled many of the world’s largest financial firms. The big banks are now using their strong balance sheets to make acquisitions, often at bargain prices, and to upgrade their holdings....
Softchoice Corp., $12.43, symbol SO on Toronto (Shares outstanding: 19.8 million; Market cap: $246.1 million; www.softchoice.com), resells other companies’ software (around 60% of sales) and hardware (40% of sales) to organizations of all sizes. It has more than 40 offices in the U.S. and Canada. Softchoice is the fifth-largest reseller of Microsoft software in the U.S. and the largest in Canada. Of the 200,000 software titles it sells, 33% are made by Microsoft. The company also resells hardware, including computers, servers and networking equipment, from IBM, Hewlett-Packard, Cisco and other device makers. Softchoice’s competitors include Dell Inc. and CDW Corp. The company also manages software licenses for clients ranging from small companies with as few as 25 computers to large banks with over 70,000. Canadian customers include Bank of Montreal, TD Bank, Rogers Communications and Canadian Tire....
You may find that exchange-traded funds (ETFs) have a place in your portfolio. Unlike many other financial innovations, they don’t load you up with heavy management fees or tie you down with high redemption charges if you decide to withdraw. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. They have another advantage. Since shares are only added or removed when the underlying index changes, there’s a low turnover. That means you aren’t faced with the capital gains bills generated by the yearly distributions most mutual funds pay out to their unitholders....
IMPERIAL OIL LTD., $47.37, Toronto symbol IMO, reported sharply higher earnings for 2011, mainly due to rising oil prices and higher production. During the year, the company earned $3.4 billion, or $3.95 a share. That beat the consensus estimate of $3.55 a share. The 2011 earnings are also up 52.5% from $2.2 billion, or $2.59 a share, in 2010. Revenue rose 22.4%, to $30.7 billion from $25.1 billion. Cash flow per share rose 33.1%, to $4.70 from $3.53. Imperial gets most of its oil from its Cold Lake oil sands project in Alberta. Cold Lake’s daily production rose 11.1%, to a record 160,000 barrels in 2011 from 144,000 barrels in 2010. That helped offset lower production of conventional oil and natural gas. In all, Imperial produced an average of 297,000 barrels of oil equivalent (including natural gas) in 2011, up 1.0% from 294,000 barrels in 2010....
Exchange traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....
PLEASE NOTE: Next week, Wall Street Stock Forecaster, our newsletter that focuses on the U.S. stock markets, will reveal its #1 pick for 2012. TRANSCANADA CORP., $41.81, Toronto symbol TRP, fell 2% this week after the U.S. State Department rejected the company’s plan to build the Keystone XL pipeline, which would pump oil from the Alberta oil sands through Oklahoma to refineries on the U.S. Gulf Coast. However, TransCanada is working to reroute the pipeline around environmentally sensitive areas in Nebraska. Once it finalizes the new route, the company can reapply for a permit. If approved, the pipeline could begin operating in 2014....
RESEARCH IN MOTION LTD., $17.08, Toronto symbol RIM, fell 9% on Friday after it said it would write down its inventory of unsold BlackBerry PlayBook tablet computers. RIM recently cut the price of the PlayBook by 60% to spur sales. The writedown will cut RIM’s after-tax earnings in its 2012 third quarter, which ended November 26, 2011, by $360 million (all amounts except share price in U.S. dollars). RIM earned $329 million, or $0.63 a share, in the second quarter of fiscal 2012. The company shipped 14.1 million BlackBerry smartphones in the third quarter, which was in line with its forecast of 13.5 to 14.5 million. It also shipped 150,000 PlayBooks....
Canada’s big five banks avoided the problems with subprime mortgages and European sovereign debt that have crippled many of the world’s largest financial firms. The big banks are now using their strong balance sheets to make acquisitions, often at bargain prices, and to upgrade their holdings. ROYAL BANK OF CANADA $45 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $63.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s largest bank, with $730.6 billion of assets....
CANADIAN PACIFIC RAILWAY CO., $63.80, Toronto symbol CP, reported higher revenue in its latest quarter. However, earnings fell short of the consensus estimate. In the three months ended September 30, 2011, CP’s revenue rose 4.3%, to $1.34 billion from $1.29 billion. That’s mainly because the company raised its shipping rates and fuel surcharges. In addition, CP shipped more coal and potash during the quarter; that offset lower volumes of manufactured goods and grain. Even with the higher revenue, earnings fell 5.3%, to $186.8 million, or $1.10 a share. That missed the consensus estimate of $1.11 a share. However, costs related to the early repayment of long-term notes cut earnings by $0.04 a share in the latest quarter. A year earlier, the company earned $197.3 million, or $1.17 a share....
ISHARES DOW JONES CANADA SELECT DIVIDEND INDEX FUND $19.60 (Toronto symbol XDV; buy or sell through a broker; 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 0.50%. Its yield is 2.7%. The fund’s top holdings are CIBC, 6.6%; Bank of Montreal, 5.3%; Bonterra Energy, 5.2%; National Bank, 4.9%; TD Bank, 4.9%; Telus, 4.8%; IGM Financial, 4.3%; Enbridge, 4.2%; BCE, 4.2%; Canadian Utilities, 3.7%; and Manitoba Telecom, 3.7%. The fund holds 50.2% of its assets in financial stocks. Utilities are next, at 26.4%. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector....