David Baskin.Moe Doiron/The Globe and Mail
David Baskin is president of Baskin Financial Services. His focus is North American large caps.
Top Picks:
Suncor Energy Inc.
Suncor has thirty years of reserves in the oil sands, growing production with reducing costs, and a fully integrated refining and retailing capacity. The company is trading at about 5.5 times expected cash flow and pays a dividend of over 2 per cent. We expect approval for various pipeline projects which will reduce the discount for Canadian crude.
Progressive Waste Solutions
BIN is a leading solid waste management company. As the economy accelerates in the U.S. volumes will increase. The company has bid on a number of major contracts, and we expect earnings to rise steadily. A dividend of 2.4 per cent can be expected to rise in the future.
BCE Inc.
BCE is the highest-yielding of the major Canadian telecoms, with a current dividend of over 5 per cent. For income seekers, particularly in non-registered accounts, this is a very attractive yield, and will likely increase. Moves by the federal government to increase competition in the wireless market will impact BCE less than its competitors Telus and Rogers.
Past Picks: December 20, 2012
Apple Inc.
Then: $521.73 (U.S.); Now: $537.64; Total return: +5.63 per cent
Empire Co.
Then: $58.41 (Cdn); Now: $73.07; Total return: +26.92 per cent
SNC-Lavalin Group Inc.
Then: $40.20; Now: $48.60; Total return: +23.50 per cent
Total return average: +18.68 per cent
Market outlook:
The American economy finally is showing signs of more robust growth, after a very slow recovery over the past four years. While this will inevitably lead to the end of the Federal Reserve's quantitative earnings program, and eventually to higher interest rates, the stronger growth is positive for corporate profits, and thus for shareholders. After a gain of almost 30 per cent in 2013, the S&P 500 looks fairly fully valued over all, but we continue to find good value in individual stocks. Canadian markets remain weighed down by the high concentration in materials and energy, but as with the U.S., we are able to find good stocks for value investors to buy. In our view, 2014 will be a stock pickers market with the emphasis on fundamentally sound, value-based investing.