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Globe Investor BMO’s top stock picks, companies dropping their DRIPs and what not to do with ETFs: What you need to know in investing this week

Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.



BMO reveals its 24 top Canadian stock picks for 2019

BMO’s equity research department recently released its top Canadian stock picks for 2019. Making the list are 24 stocks across four categories: growth stocks, growth at a reasonable price stocks, value stocks and stocks with potential catalysts. Some names will be familiar, such as Suncor, Loblaw or Bank of Nova Scotia, others perhaps not so much, including Badger Daylighting and Kelt Exploration. Here is the complete list and investment rationales for each of the recommendations.

Related: CEO and CFO pile into this rising dividend stock

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Why Canadian companies are dropping their dividend reinvestment plans

When Canadian Utilities announced its first-quarter dividends this month, the company had some good news – and some bad news – for investors, John Heinzl writes. The good news was it hiked its dividend by 7.5 per cent. The bad news? The company suspended its dividend reinvestment plan (DRIP). Investors will no longer be able to use their dividends to automatically purchase additional shares – without brokerage commissions – directly from the company and will also lose the 2-per-cent discount that applied to DRIP purchases. Canadian Utilities is just the latest company to drop its DRIP - Enbridge, H&R REIT and RioCan REIT are among the others.

More from John Heinzl: How to diversify across multiple accounts, where to find TSX total returns, and tax advice on global dividend stocks

ETFs are good for your portfolio, but not if you do this

There are two outstanding benefits on which the success of exchange-traded funds have been built – low fees and simplicity, Rob Carrick writes. But they could be too much of a good thing if you hold too many. The real problem for investors is that ETF companies are swamping people with funds and not providing enough information on which are key portfolio component as opposed to fringe funds. All you really need is a bond ETF, a Canadian equity ETF and a global equity ETF, which includes U.S. exposure. Check out the Freedom 0.11 Portfolio – it gives you a fully diversified portfolio with exposure to bonds and stocks from around the world using four ETFs. The 0.11 in the name refers to the superlow average management expense ratio for these four funds.

Read more Rob Carrick: The problem with home equity lines of credit? Perma-debt

Broken blue chips: Manulife and Power fight to shake off the effects of a crisis

Manulife and Power Financialhave more than a few things in common, David Berman writes. But here’s the big one: These former stock-market superstars have done poorly since the eruption of the credit crisis, underperforming other Canadian financial companies by a wide margin and leaving long-term investors exasperated. If you had invested in Manulife or Power Financial five years ago, as the North American economic recovery was gaining momentum, you would still have earned almost nothing. Some of their peers have struggled as well over the past decade. But the shift is particularly striking for Manulife and Power Financial because of the stark contrast with their go-go years, when they could do no wrong.

Read more: How to find undervalued stocks in the wake of last year’s big selloff - and three that top value investors may approve of

What this $100-million portfolio manager is buying, shorting and thinking about markets

Portfolio manager Andrea Horan

Christopher Katsarov/The Globe a/The Globe and Mail

While some investors are calling for a recession in the not-too-distant future, Agilith Capital portfolio manager Andrea Horan doesn’t see it, Brenda Bouw writes. Ms. Horan, who oversees nearly $100-million in assets, expects growth to slow but believes there’s “significant mis-pricing” in the market. While down 22 per cent last year, her North American Diversified Fund has had a compound annual return of 17 per cent over the past 10 years, she says, since the beginning of 2009, a period that includes a number of market swings. She tells The Globe and Mail what she’s buying, selling and shorting.

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What investors need to know for the week ahead

U.S. markets are closed Monday for Martin Luther King Day. Companies releasing their latest earnings this coming week include: Advanced Micro Devices, Capital One, Halliburton, IBM, Johnson & Johnson, TD Ameritrade, AGF Management, Canadian Pacific Railway, Ford, Kimberly-Clark, Procter & Gamble, Bristol-Myers Squibb, Intel, Rogers Communications, Starbucks, Union Pacific and Colgate-Palmolive. Expect several U.S. economic reports to be delayed by the U.S. government partial shutdown. Canadian economic data on tap include: November manufacturing sales and wholesale trade (Tuesday); November retail sales (Wednesday); and November budget balance (Friday).

Looking for more money management ideas and opinions?

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