Stock Watch List

Here are a few stocks that are on my stock watch list. Since I’ve more or less maximized our tax-sheltered accounts for 2014, future purchases will be made from the regular accounts. For tax efficiency, I will avoid REITs and income trusts and focus on Canadian corporations that pay monthly or quarterly dividends that are eligible for dividend tax credits.

First up on the watch list is Rogers Communication (RCI.B). I already own Rogers in my portfolio so any new purchases would add to my position. Rogers’ business includes Wireless, Cable, Business Solutions and Media. Rogers is one of the big three telecommunication companies in Canada and has a strong control to the Canadian wireless market. Rogers also owns part of the Maple Leaf Sports and Entertainment, which consists of Toronto Maple Leafs, Toronto Raptors, Toronto FC, and Toronto Marlies. Forbes recently rated Toronto Maple Leafs as one of world’s most valuable sports franchise. Needless to say, Rogers is making some profits from MLSE as well. Currently Rogers is trading at 13.5 P/E. The share price is trading close to its 52-week low due to unfavourable quarterly results and guidance. The low price gives some good opportunities to add to my position. Rogers pays a dividend of $0.46/share quarterly, or a dividend yield of about 4.3%. Rogers has increased its dividend for 9 years and has a 5 year dividend growth average of 10.59%. The payout ratio is a healthy 58% so Rogers should continue increasing its dividends for years to come.

Next on the list is Suncor Energy (SU). Suncor is one of the biggest oil companies in Canada. The company explores, acquires, develops, produces, and market crude oil in Canada and internationally. In addition, Suncor also transports and refines crude oil. Because it takes a huge amount of money and resources to keep competing in the Oil & Gas sector, Suncor has a wide moat. This is exactly why Warren Buffet purchased $500 million worth of Suncor shares earlier this year. Suncor currently trades at 15.8 P/E. The share price is trading close to its 52-week high. Due to the current economic outlook, I suspect Suncor may continue to trade close to 52-week high or so for a while. It pays a dividend of $0.23/share quarterly, or a dividend yield of about 2%.  Suncor has increased its dividend for 11 straight years and has a 5 year dividend growth average of 29%. The payout ratio is only 31% so the higher than normal growth rate should continue for years to come.

The final company on my watch list is Tim Hortons (THI). Tim Hortons is a very popular coffee and doughnut chain store in Canada. If you look around in major Canadian cities like Toronto, Montreal and Vancouver, there seems to be a store on every street corner. The company has been expanding its menu to offer a wide variety of food items as a way to attract more customers. In recent report the company is considering serving alcohol in the near future. I believe the new menu and services will only expand Tim Hortons’ profit margin. The stock is currently trading at 20 P/E. The high P/E is a concern but the forward P/E is a reasonable 16.8. This means the earning should continue to grow. The stock pays a dividend of $0.32/share quarterly, or a dividend yield of about 2.1%. THI has increased its dividend for 8 years and has a 5 year dividend growth average of 29%. The payout ratio is a healthy 43.8%. The above 20 P/E is a little bit of a concern to me, so I will be looking for a dip in the price before initiating a position.


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  • Reply
    July 30, 2014 at 9:02 am

    All great companies to hold in your portfolio. I own RCI.B (although its a small position) and wouldnt mind adding more at these levels. Everybody just sees their wireless business and the hit that they will take with the emergence of a 4th player – but the road forward for BCE and RCI.B is media. Thats what they’ve been investing in for the last few years and are turning into media giants in addition to wireless, telecom and cable service providers.

    I’d love to add SU and THI (or SBUX). Need to replenish my cash reserves before I do that though

    Happy investing

    • Reply
      July 30, 2014 at 9:36 am

      Thanks for the comment R2R. Rogers is going down due to the reasons that you just mentioned. Even with a 4th player Rogers, Telus, and Bell will continue making money. These companies are no longer just wireless players, they have expanded their business into other areas.

  • Reply
    Daisy @ Prairie Eco Thrifter
    July 31, 2014 at 6:29 am

    I have at least one of those companies in my portfolio in ETFs/mutual funds that I own. I have not braved into the land of individual stock buying yet, but I hope to learn more about it and start sometime in 2015.

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