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.
Enbridge has turned a corner. It’s time to jump back in, Gordon Pape says
There was a time when everyone wanted to own a piece of Enbridge, Gordon Pape writes. In early April, 2015, it reached a record high of more than $63 a share. Soon after that, the bottom fell out. By April, 2018, it was trading for less than $40 a share.
The shares staged a modest rally, but as recently as last August, you could have picked them up for about $43. Since then, they have gained more than 21 per cent. With a yield of 6.2 per cent, Enbridge is suddenly attracting investor interest again.
On Dec. 10, it announced a 9.8-per-cent increase in its dividend, to 81 cents a quarter ($3.24 a year), effective March 1. The company has raised its dividend every year since 1995. We should look forward to a gradual increase in the stock price and more years of dividend increases in the 5- to 7-per-cent range.
The five top-performing Canadian equity analysts – and their stock picks for 2020
Investors enjoyed an exceptional year in 2019. Although Canada’s stock market didn’t perform quite as well as its U.S. neighbourit was a year of fresh records and over $400-billion dollars in added value in the market. Against this backdrop, TipRanks, a website that tracks and ranks analyst recommendations, monitored and measured the performance of financial analysts who published recommendations during the year, including ratings for the Canadian stock market.
Here is TipRanks’ list of 2019’s five best performing analysts for the Canadian markets, along with their top stock picks for 2020. They include Aravinda Galappatthige of Canaccord Genuity, whose bet this year is media company Corus Entertainment, and Nik Priebe of BMO Nesbitt Burns, who has reiterated his “outperform” rating on Guardian Capital.
Here’s what John Heinzl confidently predicts for his TSX-beating dividend portfolio in 2020
What will stock markets do in 2020? Beats me, John Heinzl writes. But there is one thing I can say with a high degree of confidence: Regardless of what happens on the stock market, most of the companies in my Yield Hog Dividend Growth Portfolio will raise their dividends in 2020.
In fact, it’s already happening. On Jan. 9, Canadian Utilities hiked its dividend by 3 per cent, extending its streak of consecutive annual increases to 48 years. I expect that several other stocks in my model portfolio will follow suit in the coming weeks. Companies that have historically announced dividend increases in the first quarter include Brookfield Infrastructure Partners, TC Energy, BCE, Restaurant Brands International and several Canadian banks.
David Rosenberg: Nine ways to make money in markets this year
For equities, stick with a theme of quality, low cyclicality, strong balance sheets, and reliable and recurring cash flow streams, David Rosenberg writes. For bonds, go for extremely high quality. Here are nine strategies he favours for 2020. They include:
- Cash (dry powder ready to be deployed)
- Utilities stocks
- Defence/aerospace stocks
- Consumer staples that have a low degree of price-demand elasticity
In terms of what to avoid, think credit hedge funds and low-grade corporate bonds and loans. These investments are juiced up by a ton of leverage and lack liquidity when times get challenging.
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‘What is the best ETF for an RESP?’
The high cost of living for families means it’s often falling to grandparents to contribute to registered education savings plans, Rob Carrick writes. Many of the RESP enquiries I get are from grandparents who want to help their grandkids afford the cost of a post-secondary education.
A balanced ETF, also known as an asset allocation ETF, is a fully diversified portfolios available in a single fund. There are basically five flavours of balanced ETF - conservative, income-focused, balanced, growth and all-stocks (the balancing comes in the form of exposure to Canada and global markets). Look to Vanguard, BMO and Blackrock’s iShares series of ETFs for a good, basic selection of these funds.
What investors need to know for the week ahead
In the week ahead, U.S. stock and bond markets will be closed Monday in observance of Martin Luther King Jr. Day. There will also be a rate announcement from the Bank of Canada on Wednesday, when it is expected to hold rates steady.
Companies releasing their latest financial results include Charles Schwab, IBM, Netflix, United Airlines, American Airlines, Johnson & Johnson, Rogers Communications, Capital One, Comcast, Intel, Microsoft, Starbucks, Union Pacific, eBay and American Express.
Economic data on tap include: Canadian manufacturing sales and orders for November (Tuesday); Canada’s inflation figures and New Housing Price Index, plus U.S. existing home sales for December (Wednesday); U.S. leading indicator for December (Thursday) and Canadian retail sales for November (Friday).