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Spinoffs

TELUS CORP. $29 is a buy. The company (Toronto symbol T; Utilities sector; Shares outstanding: 1.4 billion; Market cap: $40.6 billion; Dividend yield: 4.7%; Takeover Target Rating: Medium; www.telus.com) is now buying LifeWorks Inc....

1 min read

Pat McKeough

Spinoffs

Our stock updates help protect your gains

RYDER SYSTEM INC. $72 is a hold. The company (New York symbol R; Manufacturing & Industry sector; Shares outstanding: 51.1 million; Market cap: $3.7 billion; Dividend yield: 3.2%; Takeover Target Rating: Medium; www.ryder.com) leases truck fleets, mainly under long-term deals....

2 min read

Pat McKeough

Spinoffs

Takeover possibility adds to its appeal

A key reason behind our enthusiasm for spinoffs is that the newly spun-off firm could become an attractive takeover target. For example, several firms would probably be interested in buying Aramark’s uniforms business following its spinoff in order to take on industry leader Cintas....

2 min read

Pat McKeough

Spinoffs

Expect more Danaher spinoffs

DANAHER CORP. $251 is a buy. The company (New York symbol DHR; Manufacturing & Industry sector; Shares outstanding 715.9 million; Market cap: $179.7 billion; Dividend yield: 0.4%; Takeover Target Rating: Medium; www.danaher.com) is a leading maker of precision-testing equipment and tools....

1 min read

Pat McKeough

Spinoffs

Two ways spinoffs benefit investors

Spinoffs pay off in key ways: they let businesses better focus on their main operations, and they open the door to possible takeovers. Here are two recent examples.

CRANE HOLDINGS CO. $88 is a buy. The company (New York symbol CR; Manufacturing & Industry sector; Shares outstanding: 56.1 million; Market cap: $4.9 billion; Dividend yield: 2.1%; Takeover Target Rating: Medium; www.craneco.com) makes and distributes products for the construction, aerospace, defence, and other industries....

2 min read

Pat McKeough

Spinoffs

CEO’s death may act as a catalyst

XEROX HOLDINGS CORP. $14 is a hold. The company (Nasdaq symbol XRX; Manufacturing & Industry sector; Shares outstanding: 154.9 million; Market cap: $2.2 billion; Dividend yield: 7.1%; Takeover Target Rating: Medium; www.xerox.com) is a leading manufacturer of photocopiers, printers, scanners and related equipment.

Company CEO John Visentin died suddenly in June....

1 min read

Pat McKeough

Spinoffs

Beware: Activists get mixed results

Activist investors tend to target companies that can enhance shareholder value through asset sales or other moves. However, you have to evaluate these pressure campaigns on a case-by-case basis. Sometimes these moves succeed (see FedEx), but others seem poised to fail (Kohl’s).

FEDEX CORP....

2 min read

Pat McKeough

Spinoffs

Higher costs offset spinoff benefits

Foodmaker Kellogg now plans to split into three separate firms. That will divides its mature cereal segment from the faster-growing, more trendy categories of snacks and plant-based foods. While the split should unlock value, rising costs for ingredients, packaging and shipping could offset those benefits....

2 min read

Pat McKeough

Spinoffs

Spinoff spotlight: Suncor Energy

SUNCOR ENERGY INC. $40 is still a buy. The company (Toronto symbol SU; Resources sector; Shares outstanding: 1.44 billion; Market cap: $57.6 billion; Dividend yield: 4.7%; Takeover Target Rating: Medium; www.suncor.com) is Canada’s largest integrated oil firm, with major projects in the Alberta oil sands....

1 min read

Pat McKeough

Spinoffs

It’s a good time to buy more of both

On May 22, 2019, apparel maker VF Corp. spun off its Lee and Wrangler jeans business as a separately traded company called Kontoor Brands. Investors received one share in Kontoor for every seven VF shares they held. So far, the split has produced mixed results: VF is down 45%, but Kontoor is up 19%.

Even so, we feel both stocks are poised to move higher in the next few years, particularly as shoppers return to retail stores following COVID-19 lockdowns....

3 min read

Pat McKeough

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Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.