David Baskin is president, Baskin Financial Services. His focus is on North American large caps.
Cineplex Inc. (CGX TSX)
We like the multiple income streams – tickets, concessions, advertising. The conversion to VIP theatres enhances revenue and adds alcohol as a concession category. Yield is attractive at 3.7 per cent.
Power Corp. (POW TSX)
Sector remains unloved due to low bond yields, but this could change in 2015 and after. IGM is accelerating the growth of assets under management. The death of Paul Desmarais could provide shake-up catalyst. Big discount to BV.
BCE Inc. (BCE TSX)
We love the yield, record of dividend increases. The Wind Mobile deal is positive as it means there will likely be no large foreign player in market. The stock is cheap at 14.5x 2015 earnings.
Past Picks: Oct. 31, 2013
Crombie REIT (CRR.UN TSX)
Then: $13.25; Now: $13.04 -1.58%; Total return: +4.03%
Goldman Sachs (GS NYSE)
Then: $160.86; Now: $185.29 +15.19%; Total return: +16.71%
Canadian Utilities (CU TSX)
Then: $38.31; Now: $39.49 +3.08%; Total return: +5.89%
Total return average: +8.88%
The TSX was one of the best performing equity markets in the world through mid-September. We are now seeing significant declines in commodity prices across a wide spectrum of materials and this has almost erased all the gains of the 3rd quarter. We continue to emphasize high quality dividend-paying stocks, including interest sensitive sectors such as real estate, utilities, telecom and pipelines. Based on expected economic performance and current data, we do not expect any substantial increase in interest rates for the next nine to twelve months. With fixed income products remaining so unrewarding, blue chips stocks remain the best asset class.