Video of the Week: Canadians Stocks We Never Talk About


Recently, I discussed Canadian Dividend Stocks rarely heard about in a webinar. I pulled out an excerpt of this 90min webinar about 5 of the 10 stocks I presented (Andrew Peller (ADW.A.TO), CAE (CAE.TO), Fiera Capital (FSZ.TO), Intertape Polymer (ITP.TO) and Open Text (OTEX.TO)). To watch the entire webinar, register to the Full Replay FREE (including the 5 remaining stocks like Cineplex, NFI Group and Richelieu Hardware).


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00:02 Mike Heroux: Hey everyone, this is Mike Heroux from Dividend Stocks Rock. I hope you’re doing well. Today we’re talking about Canadian stocks but I didn’t want to discuss companies that are too classic, too common. Hopefully you’ll find a few good firm and I try to pick a little bit of everything. You have some growth-oriented, some others for income-seeking investors. We’re talking about five, six, 7% yield and then sometimes 1.5 yield. Please know that it’s always important you do your own due diligence. I am not responsible if you’re losing money after making any trade. Please do your own research, those topics are not to be made a full portfolio either. Hopefully, that you will find something interesting, but then again, make sure that it fits with your investing strategy, you’re investing plan and your existing portfolio. 00:54 MH: For those who don’t know me, my name is Mike Heroux, the accents you hear right now is because I’m French-Canadian. I’ve been married forever, 22 years with my wife. We have three amazing kids together. In 2016 I decided to quit my job and go on a major road trip. We traveled the world. Basically, we started in Montreal and we ended up in Costa Rica. Then I realized that designing my own lifestyle was probably one of the most important thing ever. I decided to quit my job as a private banker and then start working full-time at Dividend Stocks Rocks. This website has been created for dividend investors back in 2013. It was kind of like a side project for me and then it grew up to over 1000 members recently. 01:44 MH: When I started investing it was in 2003. I started facing one of the major problem that we all face ask any investor, lack of sector diversification. Basically, half of the money that is invested right now is invested in only two sector and one I really like, Canadian banks. I think it’s not enough to build my own portfolio. While I was writing about dividend investing, I just realized how interesting it was and how it’s great because it’s a passive strategy. Once you do a lot of research at first to find those hidden gem that keeps increasing your dividend, then you’re set for a long time. And most of the time, you just feel very good about what you have in your portfolio because you’re getting paid on a quarterly basis and this is a great… It’s a great way to go through bear market as well. 02:39 MH: Now we’ll gonna move ahead with my 10 favorite picks right now. The first one is Andrew Peller. Those who have been following me through dividend guide blog or at DSR know that I really like this company. The stock may seems a bit overvalued in terms of if you look at the Dividend Discount Model or if you use the P ratio. But don’t forget that this is a growth stock. We’re talking about a company that did 17 acquisitions since 1995 and Andrew Peller now has 10% of the wine market in Canada. It’s the largest player there. The company is also trying to diversify its business through the beer market and whiskey. We’re really looking to invest a lot of money into marketing, into branding at Andrew Peller to keep the growth coming. The yield is low of 1.5% not quite interesting, but the five-year annualized dividend growth rate is at 9%. Basically, this stock is offering a good growth perspective, because it’s growing it’s revenue to requisition and at the same time, the dividend will continue to increase with a high single digit going forward. 03:54 MH: Moving on to number two which is CAE. Basically, they’re doing training and simulators, services into three different segments. We’re talking about civil aviation training solutions, defense and security and a small portion is coming out from health care. This one is more like a diversification, a tribe. Most of their money is coming out from the civil and the defense center. The show bookings for the upcoming year in the defense industry of 265 million. There’s a lot of growth going out there and they’re now expanding through the healthcare systems. What I like about CAE is that training is never outdated, you always have to keep returning to improve your knowledge because technology evolves, the airplanes are different. You need to go back and do some more training in simulators. This is what is great about it. It’s recurring revenue all the time. Once again, small yield but strong dividend growth perspective over there. 05:00 MH: Now we’re moving into the financial service but we’re not talking about a bank, we’re talking about aggressive asset manager called Fiera Capital. This company has been buying and making position like crazy for the past years. If you look at the asset under management growth, we’re talking about 29 billion in 2011, so less than 10 years ago and now we’re at 145 billion, that is just crazy. And the dividend growth has been double digits for the past five years and still, the company is offering a 7% yield. Compared to last year, they had a very great quarter but compared to last quarter so sequentially revenues is slowing down. It might be a tough run going forward for a few years. Obviously, everybody is like quite concerned about the current market because it doesn’t seems to go down at any point. We’re just having small flashes, small correction, but nothing compared to a real bear market. Everybody’s asking. “Well, is it the time that it will finally happen?” And if it does, well obviously, Fiera shares are going to go down, but in the meantime, the dividend is safe and at 7% yield, it’s quite an occasion if you’re looking for some additional income. 06:19 MH: Now, one of my favorite from this list, Intertape Polymer. During my trip, my VR trip there were two things that were essential and the first one was a fresh bottle of wine to have on the beach and the second thing was a duct tape, a role of duct tape. Because everything can be fixed with duct tape and Intertape Polymer understood that and now 60% of their sales are coming out of some kind of tapes. Basically, with the growth of e-commerce, we’re talking about a lot more boxes being shipped everywhere. You need protective package, you need tapes. Intertape is surfing right now on strong economic tale winds. What they do is, they acquire other I would call tape companies and then they can offer their products or doing cross-sells among those acquisition. They’ve been doing very well, you have a five-year dividend growth rate of 3%. But it has been more than a year that the company hasn’t increased it’s dividend. The reason is quite simple, they rather focus on acquiring new businesses. I decided to buy Intertape Polymer about a year ago in my portfolio because I think that the company is posed for strong growth and with a USD dividend payment at 4% yield, it is quite interesting to have you in your portfolio. 07:42 MH: Another one of my favorite, you probably know about Open Text. This is not like a small company, it’s probably one of the best text stock in the community market. Mind you, we don’t have much of them. You know like all companies have a bunch of data about their employees, about their products, about their business and this data is being just accumulated all the time and it’s hard to understand it and package it and see graph and take action to improve your productivity. Open Text is offering an enterprise and full management system that is enabling their customers to manage their data in the best way. They have over 100,000 clients. The move towards a cloud-based system is one of the strongest [08:32] ____ here and what is amazing about this company that we’re talking about recurring revenue. The software they offer goes like a subscription. It’s very interesting and Open Text is also growing very fast, through acquisition. Obviously, it’s a text stock so whenever a new small start up comes up in this field, it could disrupt the whole thing with a better software, better approach, but right now they do well. They are growing fast, and even though the dividend is small at 1.5% it’s not much, keep in mind for the past five years, it has been growing by 15% on an annualized based. We’re talking about a very strong dividend grower here and on top of it, you’ll have shares appreciation perspective as well. 09:23 MH: I hope that you had that it had given you some value, some ideas and we’ll talk to you soon, because we’re definitely going to do more webinars like this. Take good care and enjoy your summer

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