Today, Greg Newman commented about whether ZID-T, PPL-T, ENB-T, META-Q, AAPL-Q, BBD.B-T, ARX-T, D.UN-T, TRP-T, MX-T, FTS-T, BEP.UN-T, T-T, PGF-T, RUS-T, BNS-T, RECP-T, MG-T, WJX-T, CP-T, CNR-T, BAC-N, MFC-T, ALA-T, ECA-T are stocks to buy or sell.
The balance sheet has gotten a lot better, but still not ironclad. Trading at 2.2X Debt to Cash Flow for 2018. If oil/gas gets really challenged, that could be a problem. It’s still not cheap on a 2018 multiple, but they have really nice production growth. Thinks they are going to do 17% over his forecast, which leads to Cash Flow per share of about 35%. Balance sheets are going to look a lot better in 2019 and their valuations are going to start to look better at that time. They had a bad debt situation a couple of years ago, but have had a Herculean turnaround. He probably would not want to be in the energy sector at these levels.
This has been a gift that keeps giving. It has done very well over the last few years. He has this trading at 11.1 2018 versus Sun Life (SLF-T) at 11.4. There has been convergence amongst all the insurance companies in Canada. To him, this is a good deal. He models it growing at 9% with a 13% dividend growth. Good balance sheet. On a little bit of a pullback, you could buy this.
Still trading at close to tangible BV of around 1X. On a PE basis, it is a little more expensive than Toronto Dominion (TD-T), maybe around 14X versus 12X. With rising interest rates, a slightly better net interest margin, a rebounding America, and the corporate tax plan, this company really stands to benefit. This one is going higher.
They cut their dividend, but he sees this as pretty safe with a 60% payout ratio. He models 45% EPS growth. Their balance sheet has gotten much better. The cycle is just starting to come on with equipment makers, and is trading at about a 6-point discount to Finning. Trades at about 13.8X with Finning at around 19X.
Dividend paying stock to provide an income? He would start with one or 2 banks and 1 or 2 insurance companies. There are some really good industrials that still look good, such as a Magna (MG-T). A lot of people are looking for the high dividend paying stocks, that are good to be owning in this environment. He would suggest a Russell Metals (RUS-T) with about a 5% dividend, which is strengthening from metal prices.
(A Top Pick Dec 9/16. Up 3%.) This really hasn't come to fruition yet. He chose it for its discounted valuation. Trading at around 9X versus same restaurant peers that are trading around 15X that have growth. It has been impacted by minimum wage hikes. He is looking for 3% restaurant sales growth over 2018 from a rebound in Calgary and the strong Québec. A very good name to be owning.
He likes this for recovering steel prices, steady demand, and its position in Canada as the leading distributor. The yield looks very sustainable. Has a 76% payout ratio. Balance sheet looks really good for M&A, because they want to buy mom and pop shops and be a consolidator. On strengthening steel prices, he models them growing cash flows 25% from 2016 to 2018. However, on a PE basis, it’s a little more expensive than its peers, but on an EV to EBITDA basis, it is in line. He would look to buy this on a bit of a pullback. Pays a real nice dividend.
They've sold a lot of assets and repaid a lot of debt. They've got covenant amendments, so are still in operations. Sees the balance sheet turning the corner in 2019. The bad news is that the debt to cash flow is about 6 times. Very vulnerable if prices plummet. It is still very pricey on an EV 2 discounted cash flow. He would look at something else.
Not cheap, trading at around 18X 2018. Has a pretty high payout ratio around 86%, but sees that coming down. On Q3 their CAP X guidance was lower for the 1st time since 2010. They've laid most of their fibre and have done their footprint, so costs will be coming down. At the same time, there is a lot of strength in wireless and wireline. He models 15% per share growth 2016-2018. In 2020 this trades at a 15X reasonable multiple. He would buy at $46.