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.
After suffering a setback, Gordon Pape is shaking up his high-yield portfolio
It’s time for a review of our High-Yield Portfolio, which was started in March 2012, Gordon Pape writes. This portfolio is designed for those who are looking for above-average cash flow and are comfortable with a higher level of risk. Since the previous review in September, holdings Enbridge and Pembina Pipeline did well, but the overall portfolio result was dragged down by big losses from Premium Brands, Vermilion, Chemtrade, and CIBC. Here are the securities we’re buying and selling.
Read more: The lazy way to investing success
Three utility and power stocks that analysts love
Looking for stocks with attractive dividend yields and the ability to raise their payouts? Consider putting utilities and power producers on your shopping list, John Heinzl writes. After a rough 2018 when the S&P/TSX Capped Utilities Index posted a total return of negative 7.7 per cent (including dividends), the sector has staged a strong rebound in 2019 as fears of rising interest rates – a key headwind for power and utilities stocks – have abated. With government bond yields down sharply and central banks expected to hold rates steady for the rest of the year, or possibly cut them, analysts say the sector could see further gains. Here’s a look at three that offer a combination of safety and growth.
Related: John Heinzl’s model dividend growth portfolio as of March 31
More from John Heinzl: Your (many) dividend questions answered
Why it’s time for dividend investors to use caution
A swift rebound in high-dividend stocks helped fuel the best first quarter for Canadian equities in nearly 20 years, Tim Shufelt writes, raising concerns that those pockets of the domestic stock market have become overheated. Since the selloff that enveloped markets globally ended in late December, there has been a renewed appetite for stocks paying generous dividends. Canadian real estate and utilities sectors are up by around 20 per cent since the rally began, while most domestic pipeline names have gained even more.
After packing in a solid year’s worth of returns in just a few months, it may be wise to treat some of the market’s hottest names with caution. The same sectors with the highest dividend payouts are also among those most vulnerable to rising long-term interest rates. And as fears of an imminent global recession fade, Canadian benchmark bond yields have begun to nudge higher.
More from Tim Shufelt: Land of oligopolies: A compelling case for a heavy weighting in Canadian stocks
Ready for a recession: Portfolio manager is shifting toward cash and bonds
Jason Del Vicario shudders when he hears the phrase, “this time is different” from market forecasters – especially those who don’t believe a recession is on the horizon. “I don’t think it’s different this time,” says Mr. Del Vicario, a Vancouver-based portfolio manager and investment adviser at HollisWealth, a division of Industrial Alliance Securities Inc. Mr. Del Vicario, who oversees about $118-million in assets, is expecting a recession to hit as early as this year and is positioning his portfolio accordingly. He speaks to The Globe about what he’s buying, what he’s selling, and his best advice for would-be high-net-worth investors.
A contrarian view: Fiera Capital’s top investor thinks utilities and telecoms are overpriced – but not these other sectors
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Should an investor give up a ‘steady Eddie’ dividend portfolio?
The recent downturn in interest has reignited the debate about whether investors can substitute dividend stocks for bonds, Rob Carrick writes. Conventional thinking is that a retiree’s portfolio should have a significant weighting in bonds to limit the damage when the stock market plunges. On the other hand, bond yields today are low and could fall further. Bonds are almost dead money if rates stay more or less level for a while. On an after-inflation basis, you’re probably losing money. For reasons related to investor emotions, I come down on the side of having some bonds and not going with an all dividend stock portfolio. Here’s why.
More from Rob Carrick: What’s a good way to invest $5,000 to start an RESP for a toddler?
What investors need to know for the week ahead
In the week ahead, there’s an EU summit and European Central Bank meeting ahead of the current Brexit deadline on Friday. Ontario is releasing its budget after markets close on Thursday. Economic data on tap for the week include: Canada’s housing starts for March and U.S. factory orders for February (Monday); and U.S. inflation figures and treasury budget for March (Wednesday). Companies reporting their latest earnings include Cogeco, Shaw Communications, Levi Strauss, Delta Air Lines, Progressive, MTY Food Group JPMorgan Chase and Wells Fargo
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Twelve Canadian companies showing what steady earnings growth looks like