Morneau Shepell Inc (MSI.TO)

He continues to own it. It was founded by the current finance minister’s father. They are big in the outsourcing business. They continue to grow in the Canada and in the US. The dividend is very safe. They are at the bottom of their payout ratio. At some point they are going to raise that dividend.

(A Top Pick Feb 3/16. Up 34.48%.) This is in the HR and outsourcing business for companies. Recently they have been expanding into the US. The stock has done well because earnings have been growing and because of the high-yield.

Benefits and HR consulting. Getting that outsourced is less costly. They have expertise in doing that in the US. They have done a pretty good job at it. It has a 4.5% yield with growth behind it. He likes it.

(A Top Pick Jan 22/16. Up 34.16%.) A very solid, stable company. The original business was pension benefits, but have also expanded into employees’ system programs which is growing. They’ve acquired some contracts in the US and thinks there are good opportunities for acquisitions there. He still likes this. They’ve retained 97%-98% of their customers. They have the ability to grow their dividend at a steady pace.

As a consulting business, this company is all about assets, which are the people. There is not a lot of capital need in the business. Their cash flow covers the dividend and whatever they need to spend on R&D, etc. They are not going to grow a whole lot, but are pretty good about turning out cash flow. The 4.08% dividend is safe.

This company has a solid outlook, both in Canada and in the US where it is expanding. It hasn’t raised its dividend, but has publicized a range for earnings where it would raise its dividend, and it is right at the bottom of that range. As long as earnings are going to continue on an uptrend, he would think it should be raising its dividend anytime now. Dividend yield of 4.7%.

(A Top Pick Oct 1/15. Up 34.38%.) In outsourcing of HR businesses. They manage companies HRs, benefits programs, pension benefits. It is also growing in the US now. This has a nice dividend, but has never raised the dividend since it stopped being an Income Trust. At the low end of the payout ratio, and he thinks it is getting ready to raise the dividend. Dividend yield of 4%.

(A Top Pick May 31/16. Up 16.25%.) A business he likes a lot. Looking where we are in the cycle with potential increases from the Fed, you don’t want to have too much interest rate sensitivity in your portfolio. This one is really a growth stock with a yield. Sees this continuing to specifically grow in the US which he likes. Also, in 2007-2008, the business actually grew. Whether you are hiring or firing people, you need either services. The yield is safe.

(Top Pick Jan 22/16, Up 37.84%) They are winning contracts in pension management and are very good at maintaining clients. The payout ratio is going down and he thinks they will continue to grow. Yield of about 4%.

A pension consultant, but have also gone into things like employee services. They’ve expanded into the US. They execute well and have a very stable business model. If they can continue carrying on in their business and not suffer too many losses from Obamacare, that’s pretty good.

This has been a beneficiary of the chase for yield, because of its healthy dividend. Earnings are growing and it hasn’t raised its dividend in quite a number of years, but the payout ratio is right at the bottom end of their window. Any quarter now we should see a positive move in the dividend. However, the stock is not a bargain anymore.

Tens of thousands of employees laid off in Alberta represent a source of growth to them. When oil and gas companies start hiring again this will be a source of business for MSI-T.

A great company and very well-managed. However, for him it is always too expensive. They’ve been able to grow organically, and he presumes they will increase the dividend as they continue to grow. A pricey stock.

A well-managed company in an industry that is fairly competitive. Has a good yield of around 4% that is stable. Their annual revenue growth is 5%-7%, and the dividend will go up over time.

A human resources consulting firm. One that a yield investor could invest in and not be too worried about where rates go. 4.59% dividend yield is fully covered by cash flow. This business grows 6%-8% a year on the top line, so very healthy. They keep on getting more and more clients every year. About 12% of their business is in the US, and thinks they will eventually make some US acquisitions to accelerate their growth.