Christine Poole.
Christine Poole is CEO and managing director of GlobeInvest Capital Management. Her focus is 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 impact of the financial crisis behind it, the company is focused on growing its core businesses. The 19-per-cent dividend increase announced 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 2.9 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 revenues), 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 current dividend yield of 2.8 per cent.
Enbridge Inc. (ENB TSX)
Enbridge operates the world's longest crude oil and liquids transportation system that spans across North America as well as Canada's largest gas distribution network in Ontario. Backed by fully contracted and funded pipeline projects under construction, Enbridge expects its earnings per share growth expected to average 10-12 per cent annually through to 2018. The stock currently yields 2.8 per cent and future annual dividend growth will at a minimum be in-line with earnings growth.
Past Picks: October 29, 2013
Home Depot (HD NYSE)
Then: $77.50; Now: $92.48 +19.33%; Total return: +21.94%
United Technologies (UTX NYSE)
Then: $106.42; Now: $101.45 -4.67%; Total return: -2.62%
Abbott Labs (ABT NYSE)
Then: $37.28; Now: $41.47 +11.24%; Total return: +13.13%
Total return average: +10.82%
"Now" figures are intraday from the date of the analyst's appearance on BNN Market Call.
Market outlook:
Corporate profit growth and interest rates are the primary drivers for equity markets going forward. Consensus Q3/14 earnings growth for the S&P500 companies is 6.4 per cent, 7.8 per cent for 2014 as a whole and 9.2 per cent in 2015. Robust U.S. manufacturing activity and reported GDP combined with a relatively benign inflationary environment suggest earnings expectations are achievable. Whilst the participation rate continued to edge down (to 62.7 per cent from 62.8 per cent the prior month and 63.2 per cent a year ago), employment growth in the U.S. is strengthening with the unemployment rate down to 5.9 per cent in September, its lowest level since July 2008. Investor angst regarding the timing and intensity of rate hikes as well as heightened global geopolitical tensions will continue to cause market volatility in the coming months. At this juncture, recessionary risks are minimal, particularly in North America. So long as the path for earnings growth remains on track, equity markets have further upside. Market pullbacks represent opportunities to build positions in high quality, financially strong companies. The lack of investment alternatives suggests equities will continue to outperform all other asset classes.