Christine Poole.
Christine Poole is CEO and managing director of GlobeInvest Capital Management. Her focus is on North American large caps.
Top Picks:
Manulife Financial (MFC TSX)
Manulife is a leading Canadian life insurance company with operations in Canada, the United States and Asia. With the fallout of the financial crisis behind it, the company is focused on growing its core businesses. The 19-per-cent dividend increase last quarter, the first increase since cutting it by 50 per cent in 2009, signals management's positive outlook on the sustainability of future earnings. Manulife currently provides a dividend yield of 2.8 per cent.
Yum Brands (YUM NYSE)
Yum is the world's largest quick serve restaurant (QSR) company with over 40,000 units in more than 125 countries through its concepts consisting of KFC, Pizza Hut and Taco Bell. With China accounting for about 40 per cent of its operating income, Yum benefits from the doubling of the consuming Chinese middle class from 300 million today to 600 million by 2020. The penetration of QSR/casual dining remains significantly below that of developed regions. Well-publicized improper food handling practices by a meat supplier to Yum in China has temporarily reduced traffic into its restaurants and created an attractive entry point to purchase the stock. A consistent dividend grower, Yum offers a yield of 2.0 per cent.
Emerson Electric (EMR NYSE)
Emerson is a high quality, U.S.-based global industrial company with North America accounting for 44 per cent of revenues, Asia 24 per cent, Europe 22 per cent, Latin America 5 per cent, and Middle East/Africa 5 per cent. Its five business segments consist of Process Management (36 per cent of sales), Industrial Automation (20 per cent), Network Power (20 per cent), Climate Technologies (16 per cent) and Commercial/Residential Solutions (8 per cent). Emerson's products and services are used in various industries to automate, monitor, measure and regulate process manufacturing, general manufacturing operations, power generation and electrical distribution. Its network power division provides products and solutions used in data centres, telecommunication networks and other critical power applications. Emerson is also a leading manufacturer of compressors which are largely sold directly to major HVAC original equipment manufacturers (OEMs). The company is well positioned to benefit from the resurgence in manufacturing activity and rising capital spending in the U.S. as well as a general increase in industrial activity globally. Having increased its dividend for 58 consecutive years, Emerson provides a dividend yield of 2.6 per cent.
Past Picks: September 10, 2013
Johnson & Johnson (JNJ NYSE)
Then: $88.53; Now: $103.80 +17.25%; Total return: +20.55%
Unilever PLC (UL NYSE)
Then: $39.10; Now: $43.60 +11.51%; Total return: +15.66%
CGI Group (GIB.A TSX)
Then: $33.85; Now: $39.14 +15.63%; Total return: +15.63%
Total return average: +17.28%
Disclosure: | Personal | Family | Portfolio/Fund |
JNJ | Y | Y | Y |
UL | Y | Y | Y |
GIB.A | Y | Y | Y |
Market outlook:
Strong U.S. manufacturing activity should support continued payroll gains and corporate profit growth. With Fed tapering expected to end by November, investors will shift their focus on coming Fed interest rate hikes. Concerns regarding the timing and intensity of rate hikes as well as heightened global geopolitical tensions may cause some market volatility in the coming months. Notwithstanding, there is minimal evidence that suggests a recessionary environment in 2015, particularly in North America. So long as the path for earnings growth remains on track, equity markets have further upside.
Investors are encouraged to take advantage of market pullbacks and opportunistically build positions in high quality, well-positioned companies. The lack of investment alternatives suggest equities will continue to outperform all other asset classes.