A Bank of Montreal or BMO location in Toronto, is seen in this file photo.Deborah Baic/The Globe and Mail
In what's been a disappointing year so far for the energy stocks in the S&P/TSX Composite, PrairieSky Royalty Ltd. isn't a laggard. Dropping by 8 per cent is roughly middle-of-the-pack performance, since there are 18 members of the sector that are down by double digits.
Still, it remains the most expensive energy stock on the Composite by a factor of two, as it entered this week trading for more than 26 times analysts' expectations for its EBITDA, or earnings before interest, taxes and depreciation, according to S&P Global Market Intelligence. The next-highest trades at 12.7, and the median is just under 7.
The royalty concern's fourth-quarter report may boost both its return and its multiple. The company said after the bell Monday its fourth-quarter funds from operations were $81.1-million, topping the mean estimate of just under $77-million, according to Thomson Reuters' Eikon. The company also announced a 4 per cent boost to its dividend, to 78 cents per share per year, and another $50-million for its stock-buyback program.
Two of the biggest reporters before Tuesday's market action may be the least volatile: Bank of Montreal and The Bank of Nova Scotia continue the Big Six earnings season, in the wake of CIBC's expectations-beating results last week. CIBC, the most domestic of the big banks and whose $3.18 per share in adjusted earnings topped analyst estimates by 35 cents, offered "strong read-throughs for the rest of the bank reporting season," said Scott Chan, an analyst at Canaccord Genuity Group Inc.
CIBC shares are up just over 2 per cent since last Wednesday, but BMO and ScotiaBank have shown little change, suggesting there's room for a few pennies' gain if the two similarly delight. BMO reports well before the market opens Tuesday and must not expect too much need to clarify its results, as its investor call is not scheduled until 2 p.m. (ET). Scotia goes the more traditional route of having its earnings release and call both prior to the market open.
This earnings season marks the first time banks report under a new accounting standard that will likely make expected loan losses more volatile. But this quarter, the new accounting model helped lower, not increase, CIBC's expected loan losses.
Analyst consensus is for $2.06 in EPS for BMO and $1.68 in EPS for ScotiaBank, according to Eikon.
Ritchie Bros. Auctioneers Inc. was down in the dumps last fall, hitting a 52-week low in mid-November. It's roared back, gaining nearly 40 per cent since and pushing a 52-week high in advance on Monday afternoon's earnings. The company's fourth-quarter results Monday night may continue the momentum, with a small beat on profit, according to Eikon. The company will do its investor call Tuesday while the market rages, leaving room for extra intra-day reaction.
One of Monday's big winners was Boardwalk Real Estate Investment Trust, which gained 9 per cent in the day's trading on its fourth-quarter results. The investor enthusiasm hasn't yet carries through to two other REITs reporting Tuesday afternoon after markets close, though. Canadian Apartment Properties REIT and Northview Apartment REIT were essentially flat in Monday's market.
David Milstead