Topic: How To Invest

The Successful Investor Hotline – Friday, September 14, 2018

Article Excerpt

LOBLAW COMPANIES LTD., $66.45, Toronto symbol L, operates 1,083 supermarkets across Canada. It also owns the Shoppers Drug Mart chain of 1,335 drugstores. The company recently lost its court case with the Canada Revenue Agency (CRA) over taxes owed by its Glenhuron Bank Ltd., a banking subsidiary based in Barbados. The court agreed with the CRA, which claimed that Glenhuron did not meet the requirements to be considered a tax-exempt foreign bank under Canadian law. Loblaw plans to appeal the ruling. Even so, it will record a one-time charge of $368 million, or $0.98 a share, against its earnings in the third quarter of 2018. The company has already paid some of those back taxes, so the actual cash cost is $242 million. To put those amounts in context, Loblaw earned $421 million, or $1.11 a share, in the second quarter. The tax payment won’t force the company to change its capital spending, share buyback or dividend commitments. The current annual dividend rate…

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