TD

A: PagerDuty Inc., $39.27, symbol PD on New York (Shares outstanding: 79.5 million; Market cap: $3.6 billion; www.pagerduty.com), operates a platform that collects real-time data from software systems and devices and then notifies its IT customers of incidents that might adversely affect their operations.

As it receives data, the company uses analytics and artificial intelligence to “learn on the go,” so the same adverse events don’t hit clients again....

The shares of all five of Canada’s major banks have moved up sharply as the economy recovers from last year’s COVID-19 downturn. That’s helping to lift earnings as they take back some of the funds they previously set aside for potential loan defaults and so.


Restrictions that prevent federally regulated lenders from raising their dividends and buying back shares remain in effect....

A: Preferred shares behave more like long-term fixed-income instruments rather than short-term instruments. So, while short-term interest rates are still relatively low, the outlook for long-term interest rates is less certain.

The underlying credit quality of preferred share issuers can be a negative factor in some cases; for example, when the issuer’s share price is falling.

So unlike GICs, which don’t fall in value, the prices of preferreds can decline along with stock markets.

If you want to own a preferred share as part of the fixed-income segment of your portfolio, and you can accept some risk, then preferreds are okay to hold....

TD BANK $83.66 is a buy. The bank (Toronto symbol TD; Shares o/s: 1.8 billion; Market cap: $151.8 billion; TSINetwork Rating: Above Average; Dividend yield: 3.8%; www.td.com) has now agreed to buy Headlands Tech Global Markets....

The major Canadian and U.S. stock markets have moved back up since their initial COVID-19 drop. Nonetheless, we think that if you can afford to stay in the market for several years or longer, now is still a good time to buy. We see ETFs as one way for you to profit from that rise, while cutting your risk.


The best of these funds offer a diversified group of stocks while charging you low management fees....

The Bank of Canada cut its benchmark interest rate to 0.25% in March 2020. That was meant to support economic activity after COVID-19 hit. Whether the bank continues to hold that rate steady, cuts it further or raises it depends on Canada’s economic growth and employment levels.


Meanwhile, today’s low interest rates make bonds unattractive....

A: The iShares S&P/TSX Composite High Dividend Index ETF, $22.23, symbol XEI on Toronto (Units outstanding: 44.7 million; Market cap: $993.7 million; www.blackrock.com/ca), aims to track the S&P/TSX Composite High Dividend Index....

Canada’s banking regulator is now starting to unwind the special conditions it placed on banks and other lenders in response to the COVID-19 pandemic. Those moves, along with falling loan-loss provisions, should let these two banks resume regular dividend increases later this year.


ROYAL BANK OF CANADA $116 is a buy. Canada’s largest bank (Toronto symbol RY; Income-Growth Dividend Payer Portfolio; Finance sector; Shares outstanding: 1.4 billion; Market cap: $162.4 billion; Dividend yield: 3.7%; Dividend Sustainability Rating: Highest; www.rbc.com) last raised your quarterly dividend with the May 2020 payment....

CANADIAN UTILITIES LTD. $32 (class A non-voting) is a buy. The company (www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also has 5 power plants—1 in Canada, 2 in Australia and 2 in Mexico....

We continue to recommend that most Canadian investors hold at least two or three of Canada’s Big Five banks (TD Bank, Bank of Nova Scotia, CIBC, Bank of Montreal and Royal Bank). That’s mainly because of their importance to the Canadian economy, plus their long history of dividend increases.

I asked our Successful Investor research department to draw up this Inner Circle Spotlight report on TD Bank....