The company has a few divisions and their US truck load division has been giving them trouble, but US spot truck rates have been improving. Their contracted business will take a while to improve. The Canadian division is fine. This is a business worth a lot more than the sum of the parts – he thinks they may end up selling parts of the business. Yield 2.8%.
Are life insurance companies well positioned for rising interest rates? He leans away from the life companies, because they are complicated businesses. Yes, interest rate increases are helpful. Intact (IFC-T) is a good company with ROEs much better than their competitors. Auto insurance companies will always be required in good and bad times, so he favours this type of insurance company over life companies.
The long term outlook is quite solid. They have not handled the minimum wage issue of Tim Hortons. He blames politicians for not seeing this coming. It is a great business with an expanding list of brands. It is not dirt cheap, but if interest rates rise it could face headwinds. Yield 3%. (Analysts’ price target is $90 )