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DON'T BUY
During Covid, money shifted out of office and retail and into apartments and industrials which saw big gains last year, but have come off this year. They remain pricey in valuation though. It's tough to grow by acquisition or finance new properties, so growth is limited. You get the yield, but not enough to trigger a buy.
property mngmnt
investment
PAST TOP PICK
(A Top Pick Aug 26/21, Up 12%) His return would have been higher had TRP not come to the market for equity recently, but that was done to finance pipelines in Mexico and BC. Opportunities for this company are strong. Natural gas in Canada is becoming more export-oriented, and TC is the only company in North American that can ship it given their pipeline system. He's been buying it.
oil
gas pipelines
WATCH
Fast food faces rising supply and labour costs and maybe a weakening consumer, but that consumer may be trading to into fast food. Fast food tends to offer stable demand. This stock has come off a lot (QSR too). A&W pays a 5% dividend yield. An interesting company. He's patient and watching this.
food services
DON'T BUY
A leader in Canadian light oil, and a big consolidator recently. But it's not his favourite; he's less positive about the future of the price of crude oil (though more so with natural gas). Many assets WCP purchased are older and require even more acquisitions to keep production going. Shorter-term, crude oil prices will be decent, but not sure long term.
Oil and Gas (Integrated Oils)
PARTIAL BUY
Did well earlier this year in the base metals rally, but inflation and the Russian invasion hit and wider market sentiment has since plunged. Long-term, LIF is great, though. Their royalty structure creates nice cash flow, and it pays a variable dividend that should remain reasonably high. Shares have fallen a lot, so you can start looking into an entry point.
Financial Services
TOP PICK
no price target You can buy it at a near-6% dividend with lots of growth ahead. They process gas. With the LNG Canada pipeline coming onstream in 2025-6, natural gas prices are very attractive, so Pembina is in a great spot. Even better if Pembina grows the dividend and the share price rises. Shares have come off from mid-50s into the 40s, so buy now.
pipelines
TOP PICK
They had a tough quarter after many of solid results. They had to take write-downs on some fixed-price contracts. However, they signed their biggest-ever contract (with Metrolinx). They are the only qualified constructor of nuclear plants, which are seeing a renaissance now amid the energy shortage. ARE pays a 6% dividend, though shares have plunged. (Analysts’ price target is $14.23)
contractors
TOP PICK
An ideal mix of power generation and opportunity in renewable energy . They're currently buying Kentucky Power. Shares have been rangebound $17-20 for a long time after a lot of growth, but he thinks they are consolidating and waiting for its next leg up. Meanwhile, you're paid around a 5% dividend which should grow. It's steady--it won't shoot the lights right away but will do 10-15 years later. (Analysts’ price target is $20.75)
electrical utilities
