The markets are still down year to date and stock valuations depressed, some see this as an opportunity others believe it’s the end of the world. I think there are a lot of good opportunities out there for the long-term investor, with some homework and due diligence I believe you can buy some great bargains. I thought I share some of my favourite picks today with the readers.
1. Rogers Communication , RCI.B
Rogers is Canada’s largest wireless service provider, it bought FIDO a few year’s ago in anticipation of more competition. Rogers currently has no debt due till 2011, growing consumer base although it slowed down last quarter. Rogers Generates a strong cashflow and has consistently increased dividends over the years, currently $0.29/quarter yielding 3.78%, dividend was increased with Q4 results. It’s expected that Rogers will announce Nadir Mohamed will be the new CEO of the company which is good news for investors.
2. Bank of Nova Scotia, BNS
Canada’s most international bank, recently reported the best results out of all the 5 major banks. I think all Canadian banks are a good option, I like BNS mainly due to the more international exposure and a lot of room to grow domestically. Current dividend is $0.49/quarter yielding 6.04%! I strongly believe Canadian bank dividends are safe and enjoy the huge yield on BNS.
3. RioCan, REI.UN
Canada’s largest REIT! RioCan is my REIT play, its recent results were str
ong and management execution has been great. RioCan is disciplined in managing debt and has a distribution of $0.115/month yielding 11.27% I think their distribution is safe for the immediate future should things get worse there might be a cut, but I believe RioCan is a great long term REIT play.
4. Husky’s Energy, HSE
Husky Energy is one of the largest integrated energy companies in the country. Husky is my oil play as I do not expect oil to stay under $50 for the long term, I believe it is reasonable to expect oil to increase to the $65-$80 level within the next year. Husky current pays a dividend of $0.30/quarter yielding about 4.30%.
5. Vodafone, VOD (ADR on NYSE)
My international play, Vodafone based in UK is world’s largest wireless provider owns part of Verizon communication. Good position in the emerging market like India where mobile usage is still strong and continuing to grow. $1.35/annual dividend yielding 7.69% and I think the dividend is safe.
Although there are many other great opportunities these are the four I wanted to point out just for some diversification reasons, a few other’s I like are:
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TD Canada Trust, TD
Manulife Financial, MFC
Johnson & Johnson, JNJ
Royal Bank, RY
Kinross Gold, K and
Talisman Energy, TLM
As you may already know I am a dividend investor and don’t really buy non dividend paying companies with a very few exceptions. As I have mentioned before due to my wedding and home purchase coming up this summer I am unfortunately not fully invested.
Disclosure: Hold RCI, MFC, HSE. Fiancé employed Scotia Capital, BNS.
What are some of your favourite investments?
Any opinions here should not be treated as an investment advice, please consult with an investment professional before you invest your money. Dividends are not guaranteed can be cut or eliminated at anytime without notice. Past performance does no guarantee for future performance.
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Article by Ray
Ray is an ex-financial adviser and the founder of Financial Highway. Currently working in the financial industry and working towards completing his Chartered Financial Analyst, CFA, designation.
Ray has written 271 articles.
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POT – Potash Corp of Saskatchewan – Solid Solid company, interlisted on toronto and new york. I can see this stock go back up to the $200 level.
BMO – Bank of Montreal – Fine, not top bank pick but highest divident yield among canadian banks. No way BMO will ever go bankrupt.
XIU – ETF for S&P500/TSX – can we all agree that the TSX will go back up to mid 2008 levels? This ETF also pays a dividend, lower MER than mutual fund, more liquid than mutual funds.
XFN – ETF for financials – not ready to risk your money into one bank? agree that most canadian banks will rise in price? here is a way to spread your risk among TSX/S&P500 listed banks.
I like potash, just too much beta in it for me. I agree demand for potash will continue and they have a good position in china. I would Prefer Agrium over Potash just because of more diversification.
BMO-umm not my favorite bank, I think the riskiest out of all of the banks, highest potential for a dividend cut thats not what I would be worried about but with more credit card defaults and problems with Harris Private bank I think BMO will underperform other banks and share dilution could also be a potential problem. I rather stick with RY, TD and BNS.
XIU and XFN I think are perfect play for anyone who doesnt want to pick individual stocks. I look for dividends so thats why I pick stocks, but either or both of the ETF’s I think are a good fit for anyone.
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