Today, Stockchase Insights commented about whether FFH-T, FTS-T, AEM-T are stocks to buy or sell.
FFH in the past focused on growing book value per share and paying minimal dividends.
The company compounded book value per share at around 15% on average, used to be considered as a “Canadian version” of BRK.B.
However, in the last ten years, performance has not been impressive, book value compounded around 8%, while most earnings are paid out as dividends.
We think FFH will still do okay going forward, but it is quite hard to repeat the track record of its past.
FFH also used to take large 'bets' on the market (both ways), and has seemed to have reduced this activity.
Unlock Premium - Try 5i Free
DIY Investor Advantage: Save on fees. We’ve heard it a million times before, but even deceptively small fees have a massive negative impact on wealth. Investing $100k at seven per cent for 35 years will result in a tidy nest egg of almost $1.1 million. Tacking on an annual two per cent fee might not sound like much but would effectively cut your final balance in half. Financial services represent a 63 billion dollar industry in Canada—63 billion dollars from fees of various forms. There are a lot of well-meaning people working in it, but the fact is that the industry is built upon increasing their wealth, not yours. Saving fees by investing your own money might be the most important financial decision you can make.
FTS has raised its dividend every year of the past 50+.
It does have a lot of debt, but it is in a regulated industry, with consistent and stable cash flow, regardless of economic conditions.
We cannot guarantee future increases, but we can say it is a dividend we would have little concern on.
Unlock Premium - Try 5i Free