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The utility space is a wonderful space in your portfolio. This one has guided for double digit dividend growth going forward. For income, you can’t beat this area. In a diversified portfolio, especially in Canada, you have to own 1 or 2 of these. One thing that worries him is that this is more focused on oil. He would prefer a more regulated utility such as Canadian Utilities (CU-T) or Fortis (FTS-T).
The chart has been ugly. In the last 2 quarters, they’ve been hurt by plant inefficiencies and a recall on a number of products. The good news is that the past president is back. He grew the company when it was a $100 million sales company to a billion-dollar sales company. If they get some of those issues right, you could see a meaningful upside in the company. Valuation is very cheap. There are rumours the company is interested in getting into canned fish as well, which would be a natural fit. Has a wonderful distribution network and a wonderful group of clients.
There hasn’t been any meaningful pullbacks on the chart, so not many buying opportunities on many of the US stocks. This stock has been unstoppable. It has one of the greatest collection of assets in the US. If you believe the US is going to continue to be a powerhouse and a grower in their economy, this is one of the best ways to play it. On any pullback, he would be in there.
As a hold for the next 5 years?On a total return basis, this is not as terrible as the stock price suggests. It has underperformed. There has always been something that pops up to hurt them over the past few years. It looks like pulp prices continue to go higher, so he doesn’t expect the best quarter in Q3. However, they have pricing power because their branded tissue toilet paper has been able to pass those price increases on to customers. He likes this for the 4.7% dividend. They have ambitious growth plans.
Recently started buying this. For lack of a better way to describe it, this is like a full complete service provider for medical supplies to hospitals and clinics. They sell consumables such as syringes and catheters, and are trying to get more into drug delivery and software. Acquiring Bard C R (BCR-N). A great company and a good business to be in.
He loves the banks. This is Canada’s most efficient bank. They are doing a wonderful job in the US. If you are worried about the impact of the Canadian housing market on the banks, this one would be one with less exposure. Prefers National Bank (NA-T). Expects a 7%-8% dividend increase this year.
Attractively priced. Whether it comes out in November, December or whenever, they are going to sell a lot of iPhone 10s. Some analysts say they could sell as high as 270 million phones, which would be 20% more than their biggest phone sale. Has a ton of cash and are going to be a big beneficiary of tax repatriation, if that happens, with tax reform. At some point, he expects they will start putting that cash to work with either a massive buyback or massive dividend increase, etc. Dividend yield of 1.6%. (Analysts’ price target is $180.)
The world’s best advertising medium. If you look at the product online, they follow you around. They know what you like, who your friends are, what you are wearing. There are even some rumours they can listen in on your phone when you are talking. They and Google (GOOGL-Q) capture only a small amount of the world advertising market, so there is a long runway of growth. (Analysts’ price target is $200.)
This gives you equity-like returns on assets like timber, that grows every single year. There are going to be big benefits from them if the US housing market continues to recover. When he does the math on their acreage and what the stock is trading at, it is undervalued by at least 20%. In the meantime, you have excellent returns. They have grown the dividend twice already in the past few years. On pullbacks this is one to own. Dividend yield of 5.8%. (Analysts’ price target is $19.)
He loved this when everybody hated it. The stock had gone nowhere for years. Now people clearly like the stock, and the stock has gone up to the right. People are addicted to their phones. Even with people reducing cable spending and cutting the cord, the company has done a terrific job of increasing cable and reducing the churn. He doesn’t think this is as undervalued as it was. Feels all the telcos have been bid up because of the consistency of earnings and dividends. He still likes the telcos.
