BEP BNS CDUAF Games Get Rich Brothers

Stock Watchlist – Q4 2018

Monthly S&P 500 Outlook For August 2018:  After A Strong July, What Next?

One of many keys to succeeding as a Dividend Progress Investor (DGI) is to be affected person, maintain money available, and be prepared when alternatives current themselves. By means of the primary three quarters of the years, the shares inside my portfolio and people I hold tabs on have risen steadily.

Since embarking on my investing journey with particular person equities again in early 2009, I’ve been dedicated to a philosophy that if I used to be prepared to personal a inventory in any respect, I also needs to be prepared to purchase extra of it on declines. In any other case, I reasoned, the inventory shouldn’t be in my portfolio the place the emphasis is dividend safety and progress. I maintain true to this philosophy as we speak.

Whereas my portfolio has held up properly via 2018, there are three top quality corporations inside it which have recently proven appreciable weak spot and have thus earned their spot on my fast watchlist as we transfer into the ultimate stretch of the yr. Remarkably, they’re all treading water across the 52-week low mark; that’s simply the place I like them given I’ve money available to take a position.

Please word that the three charts introduced under are consultant of the Canadian iterations of those corporations provided that I personal every of them in CAD on Canadian exchanges.

Financial institution of Nova Scotia (BNS)

If there’s one factor I take pleasure in as an investor, it’s a protected business with a couple of key gamers controlling nearly all of the market share. Monetary providers in Canada is house to a strong oligopoly lead by what is called the “Big Five” banks.

BNS ranks third in measurement and is probably the most worldwide of the pack. By means of fiscal Q3, Canadian Banking introduced in 50% of the earnings with the rest cut up between Worldwide Banking and International Banking and Markets at 31% and 19%, respectively.

When it comes to dividend progress, BNS has managed to spice up its payout to shareholders in 43 of the final 45 years–which is exceptional when you think about that in this era we skilled the worst financial downturn because the Nice Melancholy. Going again to 2008 the corporate has managed a 7% compound annual progress price which, if maintained, would see a doubling of dividend revenue for buyers shifting ahead. Over that very same interval, annual diluted earnings per share progress has been 9% which helps the dividend progress.

ChartBNS knowledge by YCharts

I’ve already picked up 75 BNS shares (in CAD) because the starting of the yr however am significantly contemplating it at this lower cost-level. Alternatives to common down on corporations resembling BNS are a welcome sign up my books. Because the dividend yield approaches 5%, I grow to be more and more prepared to tug the set off as soon as extra.

Brookfield Renewable Companions L.P. (BEP)

Of all of the digital-certainties I can see when peering into my crystal ball for the longer term, one in every of my favorites is the truth that the residents of the world will proceed to eat ever-higher quantities of power within the many years to return. We live in a technological, digital age. The velocity at which this takes place is accelerating day by day. Past that, the buyer has grown to be much more socially and ecologically minded than ever earlier than.

If you take these two elements collectively, the demand for corporations capable of gasoline our international financial system will proceed to extend. That’s the macro view.

When it comes to BEP itself, the corporate is likely one of the largest publicly-traded renewable energy platforms with 876 producing amenities. It has hydro, wind, photo voltaic, and different renewable belongings throughout North America, South America, Europe, and Asia. Simply over 75% of the portfolio is centered round hydroelectric energy.

ChartBEP.UN knowledge by YCharts

Sporting a present dividend yield of ~6.7%, BEP presents a bountiful payout for buyers at this time second. One facet of investing in BEP that I most take pleasure in is the corporate’s transparency with buyers; it is extremely clear that the objective is to ship 12-15% in lengthy-time period annualized returns with annual distribution will increase of 5-9%.

Whereas I’ve already picked up shares of BEP on two events just lately and solely initiated a place again in July, I will probably be glad to extend my stake at these ranges.

Canadian Utilities Ltd. (CU.TO)

CDUAF supplies providers in three segments; Buildings & Logistics, Electrical energy, Pipelines & Liquids, and Retail Power. Just like my thesis for BEP above, demand for these providers has been growing over time.

Past this, among the best features of this business is that rivals can be onerous-pressed to problem an organization’s dominance as soon as it has been established. I want the perfect of luck to any upstart firm trying to transfer into the utility market and supplant a prime-flight operator akin to CDUAF. Given the regulated nature of the business, it’s potential to generate extremely predictable revenue streams no matter financial local weather.

ChartCU knowledge by YCharts

I’ve been an investor with CDUAF since late 2015. The share worth has these days been underneath hearth, probably due to rising rates of interest–although I have a tendency to not speculate too mightily on the why given there are such a lot of numerous elements that go into inventory costs within the brief run. There’s all the time one more reason that may be pointed to.

What I really like most about CDUAF is its dividend progress report. It has posted will increase in annually since 1972 and thus sports activities the longest monitor document of annual dividend will increase of any Canadian publicly traded firm. Regardless of that spectacular run, the corporate appears to be displaying no indicators of slowing with 10% bumps in each 2017 and earlier this yr. As an investor, I consider dividend will increase ship alerts and this can be a promising signal. With a dividend yield approaching 5.5%, the entry level is engaging.

Whereas I felt earlier this yr that I might not add to my CDUAF place after rounding it out, the present worth might nicely pull me again in for an additional spherical.


Market weak spot is just a nasty factor for those who’re planning to promote investments. I’m firmly on the trail of accumulating belongings and have been ready for a second corresponding to this.

I’ll have a look on Monday when the markets open to see the place my capital will probably be greatest allotted, however these are the three frontrunners for my funding dollars in the meanwhile.

Thanks for studying.

Disclosure: I’m/we’re lengthy BEP, BNS, CDUAF.

I wrote this text myself, and it expresses my very own opinions. I’m not receiving compensation for it (aside from from In search of Alpha). I’ve no enterprise relationship with any firm whose inventory is talked about on this article.

Further disclosure: All corporations owned in CAD on Canadian exchanges.

Editor’s Word: This text discusses a number of securities that don’t commerce on a serious U.S. change. Please concentrate on the dangers related to these shares.

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