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Inflation is the big driver today (US inflation came in as expected at 4%, but lower than before and on the right track). The markets expects the Fed will stay on pause and see what happens. Recently, the Bank of Canada slightly surprised the street by raising rates in reaction to an increase in Canadian inflation. With rates flattening, income investors can buy corporate bonds and even GICs at 4.5% to 5%. Not a lot, but still a decent rate of return and safe.
A long-term hold for her. Long-term secular trends for fertilizer are positive. NTR has been more cyclical than she anticipated; the Russian invasion spiked the commodity price last year. However, some farmers didn't buy at those high prices and waited, which pushed prices down. NTR made a lot of money in 2022, but are guiding down this year. NTR is the lowest-cost producer of potash. Also, she likes their retail operation because it's less cyclical. Good cash flow which supports their 3.5% dividend. She took profits when shares were high.
Pays over a safe 7% dividend. Pipeline stocks move with the oil price. She would buy it down here. ENB doesn't need to, but it increases its dividend. They've long-term contracts and have a large infrastructure across Canada, and enjoying an oligopoly in Canada. They had a strong 2022, but have fallen quite a bit this year. That said, this is the time to start building a position. She also owns and likes Pembina for similar reasons.
Has owned this many years. She likes healthcare because of aging demographics. They made a lot of cash during Covid and have used that cash for M&A and R&D. Pays a nice 2.5% dividend. Has an established track record of raising their dividend annually. Trades at a reasonable PE. Lags healthcare, but still likes ABT.
Not worried about their drug pipeline, but some existing ones will be going off-patent. There will be a lag and the current underperformance reflects some concerns. Also are settling their talcum powder litigation. Valuation and 3.5% dividend are attractive. Strong balance sheet. Relative safe heading into an economic downturn. Will spin off their consumer products division.
She used to own it. They've had floating rate debt problems, shares plunged last year, and they cut their dividend by 40%. Probably good that they didn't buy a company recently, but that may deter their long-term growth. Activist shareholders are now involved. She suffered a sharp decline when she sold. She buys utilities for income, but rising dividends and AQN can't do that for the next few years.
Has done well, but still below all-time highs. Still leads in online search and ads. They grew a lot during Covid, but has slowed down since. Generates lot of fresh cash flow. They've developed their own Generative AI company and will embed AI in a lot of their products. Their cloud business is growing at a healthy 30% and have a strong balance sheet. Forward PE is 23x, higher than a year ago. They can keep growing. Are cutting costs after rapid expansion.
#1 in biscuits and #2 in chocolate behind Mars and gaining share. Benefited during Covid when people ate more snacks. Consumers keep buying established brands like theirs. They raised prices and have pricing power, so volumes rose. Expanding into cake and pastries and emerging markets.
A top pick last month. Shares are attractive. Likes the banks. The overhang of the First Horizon cancelled deal resulted in TD holding a lot of capital. TD will expand more in the US, and maybe buy another company. TD will focus on Canada as immigration will increase more in the near future. TD used to trade at a premium, but not at a discount below 10x as it pays a 4.8% dividend (usually it's below 4%).
They accumulated a lot of cash during Covid with their vaccine, but of course demand has fallen. They have a patent cliff in a few years, so they're buying companies to replace their drug pipeline and are developing drugs in-house. Shares have pulled back, so earnings will be negative in coming years. Trades at a decent PE. She may add, but will watch this.
