David Cockfield is managing director and portfolio manager of Northland Wealth Management. His focus is on Canadian equities.
Crescent Point Energy Corp.
Crescent Point is a very well managed Canadian oil company focused on the Bakken oil play in Saskatchewan and North Dakota. The company regularly beats forecasts for production, cash flow and reserves increases. Recent good news included a sharp decrease in finding and development costs. The company has been a leader in the move to shipping oil by rail. The stock provides an excellent yield of 6.8 per cent.
Baytex Energy Corp.
Baytex is an Alberta-based heavy oil producer with a consistent record of increasing production and reserves. The company has used its rail access expertise plus excellent marketing to realize better-than-average prices for its production. The dividend is excellent at 5.9 per cent and the company has a history of raising its dividend.
Bank of Nova Scotia
This conservatively-managed Canadian chartered bank has a significant presence in the Caribbean, Mexico, Central and South America. The recent financial pressure on the world's emerging economies has depressed profits from this sector. BNS, which in the past has traded at a premium to its peers, now trades at a discount. Expectation of an acceleration in international growth as 2014 progresses should move the stock back to its premium valuation. The stock pays a good dividend of 3.9 per cent.
Past Picks: April 19, 2013
Then: $47.16; Now: $48.24 +2.29%; Total return: +7.76%
Then: $94.53; Now: $102.51 +8.44%; Total return: +11.80%
TD Bank (stock split Feb. 3, 2014 – 2 for 1)
Then: $80.53; Now: $51.66 +28.30%; Total return: +33.07%
Total return average: +17.54%
"Now" figures are intraday from the date of the analyst's appearance on BNN Market Call.
Equity markets appear tired in North America. The Federal Reserve stimulus program is being reduced and this has put a damper on U.S. equity markets. Investors in the U.S. have begun to look to Europe or depressed emerging markets to invest. With U.S. equity markets going sideways to down, the TSX is likely to struggle as well. Cheaper multiples in Canada would argue that the Canadian equity market will continue to outperform its U.S. counterparts. We still project Canadian equity returns will be positive for investors in Canada during 2014.