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.
Why Enbridge’s DRIP suspension is good news
A reader asks John Heinzl why Enbridge suspended its dividend reinvestment plan: “Is this a bad sign?” His response: It’s a good sign as far as Enbridge’s financial position is concerned. By suspending its DRIP, Enbridge is signalling that it doesn’t need – or want – the crutch of being able to pay investors with shares instead of cash. The company is also effectively saying that it considers its current share price to be well below its intrinsic value. Just as it probably wouldn’t want to do a formal equity issue at the stock’s current levels, it doesn’t want to dilute investors by steadily issuing shares under its DRIP.
Read more John Heinzl: Dollarama, Altagas and more of The Globe’s investing stars and dogs for the week
The TSX’s worst performing stocks and sectors in a month investors wish they could forget
Even though the S&P/TSX Composite Index ended October on a high note, it nonetheless suffered its worst monthly decline in more than seven years, David Berman writes. Canada’s benchmark index for stocks fell 6.5 per cent in October, marking its biggest setback since September, 2011, and taking it back to where it was about a decade ago. All the broad sectors fell, led by economically sensitive areas of the market such as energy, consumer discretionary, financials and industrials. Even relatively safe, dividend-generating sectors such as utilities, telecommunications and real estate investment trusts sputtered.
Weighed down by rising rates, this high-quality stock is worth the risk at a bargain price
Most income stocks have seen their values trimmed by rising interest rates, Gordon Pape writes. “I can understand investors’ frustration at seeing the value of their portfolios decline, but there’s another side to this story: It allows you to buy good-quality stocks with enhanced yields at bargain prices.” One such stock is Brookfield Property Partners, a limited partnership that is majority-owned by Toronto-based Brookfield Asset Management.
This award-winning fund manager says it’s time to overweight Canada and load up on dividend stocks
Portfolio manager Michael Simpson from Sentry Investment is a respected fund manager on Bay Street, Jennifer Dowty writes. He’s a seven-time winner of Brendan Wood International’s Canadian TopGun Investment Minds Award and recipient of the Thomson Reuters Lipper Fund Award for Excellence in Fund Management. The Globe asked Mr. Simpson for his perspectives on the markets and what buying opportunities he believes are being created during this market turbulence. Companies on his radar include: Canadian Pacific Railway, Alimentation Couche-Tard, Bank of Nova Scotia and Royal Bank of Canada. Read more here.
Bank of Canada wants rates back to normal – here’s what that means for your mortgage and line of credit
Today’s interest rates are still at jaw-dropping, forehead-slapping, eye-popping lows if you judge by historical standards, Rob Carrick writes. So when the Bank of Canada talks about bringing rates back to more normal levels, you better listen up. Rates have already risen in the past 15 months and it now looks like there’s a fair bit more to come. Brace yourself for numbers you’ve never seen if you got into the housing market after the 2008-09 global financial crisis sent rates plunging.
Read more Rob Carrick: What if the stock market busts just as you retire?
What investors need to know for the week ahead
The U.S. midterm elections happen on Tuesday, with some predicting a divided congress, with the Democrats regaining control of the House of Representatives and the Republicans holding on to the Senate. Because of the elections, the U.S. Federal Reserve has shifted its policy announcement to Thursday from the traditional Wednesday, but it’s expected to hold its benchmark rate steady. Also coming this week are the latest earnings reports from companies including Great Canadian Gaming, Marriott, Archer-Daniels-Midland, Bausch Health, IAMGold, Northland Power, Pizza Pizza, Thomson Reuters, Yellow Pages, Home Capital, Linamar, Manulife, Prudential, Qualcomm, Sun Life, Twenty-First Century Fox, Algonquin Power, Bombardier, Boston Pizza, Brookfield Asset Management, Canada Goose, Canadian Tire, Recipe Unlimited (formerly Cara), Emera, Extendicare, Hydro One, Inter Pipeline, Magna International, Power Corp., Premium Brands, Stantec, TMX, Telus and Walt Disney. Economic data on tap this week include: Canadian building permits for September (Tuesday); U.S. consumer credit for September (Wednesday); Canadian housing starts for October and Canada’s new home price index for September (Thursday); U.S. consumer confidence for November and wholesale trade numbers for September (Friday).