Latest Stock Buy or Sell?
Make More Informed Decisions!

Today, David Burrows commented about whether BMY-N, KIE-N, MET-N, MFC-T, PGR-N, FFH-T, MCK-N, ISRG-Q, LLY-N, PAVE-N, STN-T, AEM-T, FCX-N, CNQ-T, GS-N, AVGO-Q, MSFT-Q are stocks to buy or sell.

COMMENT
With falling rates, better value in high-dividend payers than in bond market?

Yes. He manages money for families, and they use their investments to generate a return to live life. He thinks that we continue to be in a world where the cost of living is going up. Maybe inflation is cooling, but that's going to come in fits and starts.

The playbook for the last 30-40 years has been that when rates drop, you buy fixed income and high-dividend-paying stocks. That's really not where we're going. He prefers dividend growers, so he'd take a lower dividend but one that's growing at a good rate. He thinks that will be a very attractive attribute for other investors over the next number of years.

Unknown
HOLD
Microsoft Corp

A secular grower that grows its dividend reliably.

computer software / processing
HOLD
Broadcom

A secular grower that grows its dividend reliably.

0
COMMENT
Which stocks can benefit from rate cuts?

We're heading into the next economic cycle, markets are looking ahead into rate cuts. So, what can benefit?
 
There are some dividend growers that are a little more economically sensitive, with really great cashflow and dividend growth, that can offer some great capital appreciation and a rising stream of dividends. Look at GS, CNQ, FCX and AEM.

Unknown
BUY
Goldman Sachs

Tied to the market. Big capital markets bank that benefits when there's M&A and lots of trading. Yield is ~2.5%, growing at about 20% a year. Returning capital to shareholders. Benefit if we're headed into another economic cycle. Relatively low payout ratio of about 25% of earnings. Really attractive.

investment companies / funds
BUY

We may be underestimating the cashflow-generation potential of some of our largest resource producers, who have found some religion in returning cashflow to shareholders. You should get 20% dividend growth going forward. Growing earnings at 20%, not a ton of capex to do. Buying back shares. But if you can get a 4+% yield that grows at 20%, in a company that has a really great balance sheet, that's pretty attractive.

oil / gas
COMMENT
Relationship between share buybacks and dividend increases.

What it means is that, over time, the EPS goes up. If they're buying back their shares, the earnings are spread over fewer shares. And dividend increases in the future will be spread over fewer people.

Unknown
BUY

We went through a bear market in commodities from 2011 - 2021. Produces copper and gold. Invested a lot of $$ in its biggest mine. Longer term, whether looking at gold or copper prices, they're going higher. Generating a lot of cash, committed to returning it to shareholders.

People look at this as a cyclical business, and it is, but when the cycle gets going it can go for a long time.

non-base metal mining
BUY
Agnico-Eagle Mines

Production grower. Multi-asset gold miner. We're in the very early stages of a bull market for the price of gold. The companies that can execute and produce efficiently should be able to pay investors well. Yield is 2+%.

precious metals
COMMENT
Infrastructure.

He's being very careful of companies that use a fair bit of debt in their business model to engineer a return to their stakeholders. If we think that we saw a generational low in interest rates in 2020, we may see a cyclical decline near-term in rates. But he thinks that, longer term, rates are going higher. The cost of capital is going to go up.

So he wants to own companies that don't have debt, and generate very strong cashflow without it. Many of the infrastructure companies carry debt to finance the building of their projects. 

There is a demand for infrastructure, and there's spending to be done. But he prefers the engineering companies that provide the services to build the infrastructure. A company like STN. Unless a company has significant growth, such as energy infrastructure, but he's cautious and wants to be sure to see growth that can offset the rising cost of capital.

Unknown
BUY
Stantec Inc

There is a demand for infrastructure, and there's spending to be done. He prefers the engineering companies that provide the services to build the infrastructure, such as this one. Infrastructure builds across NA. Big holding for him.

consulting
BUY

Very good ETF. Companies that provide services into infrastructure, rather than the infrastructure companies themselves.

E.T.F.'s
COMMENT
Healthcare sector.

Tricky, because this industry is in the political crosshairs of both camps. So he's been cautious. However, there are some real winners.

The GLP-1 weight loss companies are really in the sweet spot. For example for LLY, a very large holding for him, the opportunity for them is a very large marketplace. Getting approval for a broader range of uses. He's very happy to continue to own.

He also owns ISRG, which will help with the cost of healthcare, a very big growth opportunity. He owns MCK too.

Those 3 names together make up a 5% weight for him, which is underweight the market.

Unknown
HOLD
Eli Lilly & Co.
Healthcare holdings.

The GLP-1 weight loss companies are really in the sweet spot. For example for LLY, a very large holding for him, the opportunity for them is a very large marketplace. Getting approval for a broader range of uses. 

He also owns ISRG, which will help with the cost of healthcare, a very big growth opportunity. He owns MCK too.

Those 3 names together make up a 5% weight for him, which is underweight the market.

biotechnology / pharmaceutical
HOLD
Healthcare holdings.

The GLP-1 weight loss companies are really in the sweet spot. For example for LLY, a very large holding for him, the opportunity for them is a very large marketplace. Getting approval for a broader range of uses. 

He also owns ISRG, which will help with the cost of healthcare, a very big growth opportunity. He owns MCK too.

Those 3 names together make up a 5% weight for him, which is underweight the market.

biotechnology / pharmaceutical