Wednesday's TSX breakouts: All 9 analysts who cover this dividend stock call it a buy

It was another quiet session in the stock markets on Tuesday. The S&P/TSX composite index dipped 8 points, or 0.05 per cent to 14,525. Within the Index, 106 stocks advanced, 126 securities declined, and eight stocks were unchanged.

It was a similar situation south of the border. Major U.S. equity indices also showed little movements. The Dow Jones Industrial Average increased 0.1 per cent, while the S&P 500 Index declined slightly, 0.1 per cent.

The pause in the recent positive momentum over recent days is to be expected given the strong returns realized so far this month. Month-to-date, the S&P/TSX Composite Index is up 3.27 per cent with gains across all 10 sectors. That being said, the positive uptrend remains intact. Year-to-date, the Index is up 11.64 per cent.

On today's Breakouts Report, there are 37 securities on the positive breakouts list (stocks with positive price momentum) and seven stocks on the negative breakouts list (stocks with negative price momentum).

Discussed today is a stock that surfaced on the positive breakouts list and the Street is optimistic about its upside potential. The stock has nine unanimous buy recommendations, and an average price return anticipated of nearly 29 per cent over the next year. The security I am referring to is Tricon Capital Group Inc. (TCN-T).

A brief outline is provided below that may serve as a springboard for further fundamental research.

The Company

Tricon operates in the North American residential real estate industry across four core business segments: Tricon Housing Partners, which is involved in land and homebuilding, Tricon American Homes, a single-family rental operator, Tricon Lifestyle Communities, involved in the manufactured housing community industry, and Tricon Luxury Residences, involved in the development of apartments.

After the market closed on May 11, the company reported better-than-expected first quarter financial results. The company reported adjusted earnings per share (EPS) of 13 cents (U.S.), above the consensus estimate of 10 cents per share. The share price rallied over 5 per cent the following trading day.

Returning Capital to Shareholders

The company pays shareholders a quarterly dividend of 6.5 cents per share or 26 cents on a yearly basis. This equates to an annualized yield of 2.7 per cent.  Management is committed to its dividend. In March, the company announced an 8 per cent increase to its quarterly dividend.

During the first quarter, the company repurchased 244,520 shares as part of its normal course issuer bid at a weighted average price of $8.18 (Cdn.)

Valuation

According to Bloomberg, the stock is trading at a price-to-earnings multiple of 14.4 times the 2017 consensus estimate.

Analysts' Recommendations

According to Bloomberg, there are nine buy recommendations, and no hold nor sell recommendations on the stock. The one-year price target is $12.28, which implies a potential price return of 28.6 per cent over the next 12 months. Target prices range from a low of $11.50 to a high of $13.25. Individual target prices provided by eight firms are as follows: two at $11.50, three at $12, two at $13, and $13.25.

The Street is forecasting EPS of 47cents (U.S.) in 2016, rising to 51 cents in 2017.

Insider Security Transactions

Last week, on July 14, Adrian Rocca, an officer at Tricon Capital Group, sold 16,607 shares at $9.08 per share.

Chart Watch

Year-to-date, the stock price has appreciated a respectable 5.4 per cent as the share price continues to recover from its downtrend that was in place since September 2015.

The stock appears to be on the verge of a "Golden Cross", a bullish technical signal, with the 50-day moving average steadily approaching the 200-day moving average. A "Golden Cross" occurs when the shorter-term, in this case, 50-day moving average, crosses above the longer-term, in this case, 200-day moving average.

The stock price has successfully broken above $9, a key resistance level, with its next resistance levels at $10 and then at $11. There is large overhead resistance around $12, which is close to its record closing high (on July 21, 2015, the stock price closed at an all-time high of $12.05).

There is downside support at $9, which is close to its 200-day moving average (at $9.04).

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The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company's dividend policy, analysts' recommendations, and provides a brief technical analysis for a security to provide readers with more information.

If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.

A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.

Below is a list of securities principally from the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows. Securities on the positive breakouts list have displayed positive price momentum during this period. Securities on negative breakouts list have experienced negative price momentum.