Favourite five stocks’ return beats market benchmarks
Last year was a year most investors in the stock market just want to forget.
The benchmark Toronto Stock Exchange Composite index lost 12.1 per cent in value during the year. The broadbased U.S. Standard and Poors Index lost 9.7 per cent while the elite Dow index lost six per cent.
The five favourite Bizworld stocks eked out an average nine-tenths of one per cent gain — nothing to write home about but certainly better than the bellwether indexes. In September these five had an average gain of around four per cent, losing it to the daily selling inspired by fear of U.S. President Trump’s trade war tweets and bully tactics.
In the end, strong dividends paid by four of the five created a tiny gain. Dividends added 3.3 per cent to the returns. proving the wisdom of buying dividend paying stocks. Atlantic Gold had the best price gain — 18.7 per cent to $1.65, as its Nova Scotia open pit gold mine went into full production.
Superior Plus, owner of industrial chemical plants and consolidator of North American propane retailers and wholesalers, turned in the worst loss — 20.4 per cent to $9.71.
The Bank of Montreal lost 4.6 per cent to $89.191 on stock trade churning, while utility Fortis lost 1.8 per cent in price to $45.51. Pembina Pipeline lost 5.8 per cent to $40.51.
Bizworlds’s five favourite stocks for 2019 are Equinox Gold, Pembina Pipeline, Power Financial, Emera Inc., and Canadian Western Bank.
Equinox, trading at $1.02, operates a high cost heap, leach gold mine in California with a new lower cost Brazilian gold mine starting production before spring.
Power Financial, entering the year at $25.83, yields 6.7 per cent. The Quebec-based financial conglomerate with ownership stakes in Great West Life, Investors Group and Europe’s Pargesa industrial complex, is a steady snailpaced performer, greatly under-valued by this volatile market.
Nova Scotia-based Emera, $43.71, a power generation utility with plants in Canada, Northeastern U.S., the Caribbean and now digesting substantial acquisitions in Arizona and Florida, is also under-valued by this market. The dividend yields 5.4 per cent. Pembina Pipeline of Alberta has just acquired U.S, pipeline assets, including an early stage $10 billion liquid natural gas project in Oregon.
Pembina trades at $40.51, with the dividend yielding 5.6 per cent.
Canadian Western Bank, trading at $26.04, yields just over four per cent. Linked to the doomsday oil patch scenario, this bank’s price has suffered, yet it has few oil-related loans.
Bank executives are part way through a plan to expand Ontario loans.
The average yield of the four dividend-paying stocks is just over five per cent offering a worthwhile return while waiting for turbulent stock markets to settle down. The gold stock, Equinox, has potential for nice gains from the new mine and offers price upside if the market goes to pot and gold prices soar like eagles. CAUTION: Remember when investing, consult your adviser and do your homework before buying any security Bizworld does not recommend investments.
Ron Walter can be reached at ron[email protected]tel.net