Richards Packaging Income Fund (RPI.UN.TO)

(Top Pick Feb 17/15, Up 17.48%) It is a simple packaging business. 5% dividend. Management owns over 5% of the equity. They benefit from a stronger US dollar. A lot of packaging is for consumer staples.

This is not well known. It is really quite interesting as a small cap company that is doing nicely with its numbers. It does a very highly specialized, mainly small runs, of packaging for hospitals, etc. which need special items to contain things. 5.3% dividend.

(Top Pick Feb 17/15, Up 20.40%) It is not widely followed, but one of the largest players in North America in their space. It was very recession resistant in ‘08/’09. It pays a 5.5% dividend and earlier they made an acquisition. He thinks they may do more of that going forward. As it grows more people will pay attention.

Not widely owned and not followed by analysts. Good management and aligned to investors. Consistent, steady returns and a good portion from dividends and share buybacks. Very sustainable 5.5% dividend.

This was part of the income trust boom and got spun out. One of the leaders in North America, and certainly the leader in Canada in distributing rigid packaging products, such as pill bottles, soap dispensers, etc. Pretty recession resistant. Very stable cash flow generation. Management owns a lot of stock. They may have some acquisition opportunities, which could be a very attractive way for them to grow. Dividend yield of 5.8%.

A boring, simple, easy to understand business. Distributes rigid packaging products. Largest in Canada and 3^rd largest in North America. A lot of the products on grocery store shelves are distributed by this company. Also, they do things in the pharmaceutical/health care industry. Generates a lot of free cash flow. Trading at a discounted valuation. Pays a monthly dividend which equates to slightly over a 6% annual yield, which is very stable. At some point, it could even be a takeout target. Their largest competitor, Berlin Packaging, was recently bought at 14X enterprise value to EBITDA, and this one just trades at slightly over 8X.

If you own this one for income, it is definitely worth keeping. Income is fairly steady. A cyclical business. Well run. Good management. Not a bad balance sheet because the cash flow is pretty steady. 8.55% yield.

Not a lot of people talk about it and not a lot of analysts cover it. Dividend is sustainable and there is not a lot of leverage on the balance sheet. Be wary that it doesn’t trade a lot of shares. 8.6% dividend yield. Red flag goes off at 9%. It is an industrial company that will grow with its customers. It pays out as much money as it can because it doesn’t need it.

8.9% yield is not a red flag for this company. Reasonable payout ratio. Dividend sustainable. Not a tremendous amount of growth here.