What are we looking for?
Canadian companies that have healthy profit margins and zero debt. This could appeal to you if you are very risk-averse and don’t like the idea of potential dividends going toward interest payments. It could also mean that these companies are missing out on the chance to borrow on the cheap, while interest rates are low, and are turning their backs on growth, acquisition and expansion opportunities.
Our list is ranked according to these companies’ profit margins for the past 12 months. All data courtesy of S&P Capital IQ.
What we found
Many of the companies on the list operate in the cyclical energy and resources sector, such as Franco-Nevada, Gran Tierra Energy, Alacer Gold, Lucara Diamond, Alamos Gold, BlackPearl Resources, Nevsun Resources, Pason Systems, Mandalay Resources Corp., NuVista Energy, Silvercorp Metals, Akita Drilling and Semafo Inc.
Defensives are better represented by stocks such as Corby Spirit and Wine Ltd., which owns Wiser’s Canadian Whisky and Polar Ice vodka and earns commission income by representing alcohol brands such as Chivas Regal, Glenlivet and Kahlua. Also on the list are Jean Coutu Group, which operates drugstores in Quebec, Ontario, New Brunswick and the United States, and Winnipeg-based Winpak Ltd., which makes packaging machines and materials to protect perishable foods, beverages and health care products. Winpak is rated nine out of 10 by Thomson Reuters StockReports+. Jean Coutu has a perfect rating of 10 out of 10.
Big-screen movie company Imax Corp. also makes it on the list. Enghouse Systems develops software and technology, such as interactive voice response systems, for businesses. StockReports+ rates Enghouse stock eight out of 10. Avigilon Corp. designs and sells high-definition digital video surveillance systems.
As always, please do your own research before deciding to trade any of these stocks.
Debt-free companies with healthy earnings
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