RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 325.5 million; Market cap: $8.8 billion; Price-to-sales ratio: 7.5; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan. com) owns all or part of 301 shopping centres in Canada. That includes 15 now under development.

Online shopping continues to hurt demand for retail space at RioCan’s malls. In response, it has begun to add office and residential units to its properties, particularly those in urban markets.

For example, the trust has formed a 50/50 joint venture with Allied Properties REIT (Toronto sym bol AP.UN) to re-develop the King Portland Centre, in downtown Toronto. RioCan will manage the retail and residential portions, while Allied will handle the office component.

The partners expect to complete this project in 2019. So far, they have already leased 75% of the building’s available office space.

RioCan also continues to find new tenants for the 26 stores vacated by Target Canada in 2015.

Since then, the trust has divided many of these large-format stores into multiple outlets.

RioCan has now signed new deals, or is in advanced discussions, on 47 leases for those spaces. By the end of 2017, it expects these deals will replace 122% of the annual rental revenue it received from Target’s 26 stores.

RioCan is a buy.

The post Our top REIT cuts its risk appeared first on TSI Wealth Network.

TORONTO-DOMINION BANK, $64.25, Toronto symbol TD, earned $2.6 billion in its fiscal 2017 second quarter, ended April 30, 2017. That’s a 12.2% rise over $2.3 billion a year earlier. Due to more shares outstanding, per-share earnings rose at a slower pace of 11.7%, to $1.34 from $1.20. The gain beat the consensus estimate of $1.25.

Earnings from Canadian banking operations (64% of the total) improved 7.2%. The bank benefitted from higher loan demand, lower insurance claims, higher fee-based income and growth at its wealth management operations.

Earnings from U.S. banking (26%) jumped 18.4% thanks to stronger consumer and business demand for new loans. Earnings from wholesale banking (10%) gained 13.2% on higher securities-trading volumes and lower loan-loss provisions.

Overall revenue in the quarter rose 2.6%, to $8.5 billion from $8.3 billion. TD also set aside $500 million to cover potential loan losses, down 14.4% from $584 million. That drop is mainly because the year-earlier quarter contained extra provisions on loans to clients in the oil and gas industry.

OUR RECOMMENDATION: TD is our #1 Conservative buy for 2017.

TD Bank recent coverage

• May 2017 issue
• Hotline for March 17, 2017

BANK OF MONTREAL, $91.17, Toronto symbol BMO, reported higher earnings and revenue for its latest quarter and raised its dividend. However, the latest earnings fell short of the consensus forecast and the stock declined 3%.

In its 2017 second quarter, ended April 30, 2017, earnings rose 12.4%, to $1.30 billion from $1.15 billion a year earlier. Due to more shares outstanding, earnings per share gained 11.0%, to $1.92 from $1.73.

Those earnings exclude the cost to integrate last year’s purchase of the transportation-financing operations of General Electric. That business lends money to commercial truck and trailer manufacturers in the U.S. and Canada. On that basis, the latest earnings missed the consensus estimate of $1.93.

Earnings from Canadian retail banking (40% of the total) gained 1.1%. However, U.S. retail banking (15%) saw its profits fall 10.6% due to higher loan-loss provisions for commercial loans.

Earnings at the bank’s capital markets operations (24%) improved 12.2% on higher demand from corporate clients for underwriting advisory services. As well, earnings at the wealth management division (21%) soared 72.2%. That was due to rising stock market values and improved earnings from the bank’s insurance operations.

Bank of Montreal’s overall revenue rose 12.6%, to $5.7 billion from $5.1 billion. Loan-loss provisions jumped 28.9% in the quarter, to $259 million from $201 million a year earlier.

The bank will now raise its quarterly dividend by 2.3%. Starting with the August 2017 payment, investors will receive $0.90 a share instead of $0.88. The new annual rate of $3.60 yields 3.9%.

OUR RECOMMENDATION: Bank of Montreal is a buy.

Bank of Montreal recent coverage

• Hotline for March 3, 2017
• January 2017 issue

GREAT-WEST LIFECO INC., $33.84, Toronto symbol GWO, is Canada’s second-largest insurance company, after Manulife Financial (Toronto symbol MFC). It also offers mutual funds, retirement planning and wealth management services.

The company will now buy Financial Horizon Group, a private firm that sells financial products through 6,600 advisors across Canada. It has yet to reveal the purchase price, but should complete the purchase in the next few months.

Financial Horizon sells insurance and other products from a variety of providers. That’s why Great-West plans to operate it as a separate business, instead of merging it with its existing operations.

OUR RECOMMENDATION: Great-West Lifeco is a hold.

Great-West Lifeco recent coverage

• June 2017 issue
• Hotline for April 28, 2017

RIOCAN REAL ESTATE INVESTMENT TRUST, $25.44, Toronto symbol REI.UN, owns all or part of 300 shopping centres in Canada. That includes 15 properties now under development.

The trust has now agreed to sell 50% of its Sunnybrook Plaza retail property in midtown Toronto to Concert Real Estate Corp. RioCan will receive $26.3 million when it completes the sale in June 2017. To put that amount in context, its cash flow in the first quarter of 2017 was $142.8 million, or $0.44 a unit.

The partners plan to re-develop the Sunnybrook property, including building two residential towers on the site. Once completed, RioCan will continue to manage the retail portion of the complex.

OUR RECOMMENDATION: RioCan is a buy.

RioCan recent coverage

• June 2017 issue
• May 2017 issue

BOMBARDIER INC., Toronto symbols BBD.A $2.35 and BBD.B $2.25, is the world’s third-largest maker of commercial aircraft, after Boeing (No.1) and Airbus (No. 2). It’s also a leading maker of commuter trains.

The company continues to cut jobs and costs as part of its turnaround plan. That includes a new deal to outsource its computer information systems to International Business Machines Corp. (New York symbol IBM). Note: IBM is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.

This six-year contract is worth $700 million U.S. To put that in context, Bombardier earned $2 million U.S., or nil per share, in the first quarter of 2017.

IBM’s expertise should improve the efficiency of Bombardier’s computer systems in 47 countries. Converting those networks to a cloud-based model, which uses the Internet to store data remotely, should also cut Bombardier’s costs.

OUR RECOMMENDATION: Bombardier is still a hold.

Bombardier recent coverage

• May 2017 issue
• Hotline for April 13, 2017

Our next Hotline will go out on Friday, June 2, 2017.

The post The Successful Investor Hotline – Friday, May 26, 2017 appeared first on TSI Wealth Network.

HOME CAPITAL GROUP INC., $14.25, Toronto symbol HCG, is a mortgage lender serving borrowers who fail to meet the stricter standards of Canada’s big banks and other larger, traditional lenders.

The stock rose 20% this week after the company agreed to settle charges that it failed to disclose material information in a timely manner and misled investors.

The accusations relate to Home Capital’s July 2015 announcement that it cut ties with 45 independent mortgage brokers. That move was the company’s response to concerns those brokers had submitted loan applications with falsified income statements. Home Capital has since reviewed all of the loans in question and found the loans to be sound.

Under the terms of the settlement, the company will pay a total of $30.5 million to settle the charges and a related class-action lawsuit.

Home Capital continues to negotiate with several banks to replace an emergency $2 billion line of credit from the Healthcare of Ontario Pension Plan. It has already tapped $1.65 billion of that money.

The company needed the funds when uncertainty over its future prompted depositors to withdraw their cash from Home Trust (Home Capital’s wholly owned banking subsidiary). As of June 14, 2017, balances had declined over 90%, to $103.9 million from $1.4 billion on March 28. The company needs those deposits to fund its lending activities.

Another important source of funding—Home Trust’s GIC (Guaranteed Investment Certificates) balances—total $12.06 billion. Of that amount, $136 million is in a cashable position.

The settlement with securities regulators should help slow the pace of withdrawals. However, it will take time for the company to rebuild its capital base.

OUR RECOMMENDATION: Home Capital Group is still a hold, but only for highly aggressive investors.

Home Capital Group recent coverage

• July 2017 issue
• Hotline for June 2, 2017

AGRIUM INC., $124.23, Toronto symbol AGU, sells seeds, fertilizers and agricultural products to farmers through 1,500 stores in North America, South America and Australia. It also mines potash, and produces nitrogen- and phosphate-based fertilizers.

The company has completed its purchase of the agrochemical division of Australia’s Starpharma Holdings. That business continues to develop Priostar, a weed killer that is less harmful to the environment than competing products.

Agrium paid $35 million Australian ($25.5 million U.S.) for that business. To put the purchase amount in context, Agrium lost $10 million U.S., or $0.08 U.S. in the first quarter of 2017.

OUR RECOMMENDATION: Agrium is a buy.

Agrium recent coverage

• Hotline for May 5, 2017
• May 2017 issue

RIOCAN REAL ESTATE INVESTMENT TRUST, $24.68, Toronto symbol REI.UN, owns all or part of 300 shopping centres in Canada. That includes 15 properties now under development.

This week, Sears Canada Inc. (Toronto symbol SCC) announced that it may not be able to continue operating due to declining sales at its 135 department stores and other outlets across the country.

Of those store locations, nine are in RioCan’s malls. If Sears closes them, the impact on the REIT would be small as they account for just 0.6% of RioCan’s annual rental revenue.

OUR RECOMMENDATION: RioCan is a buy.

RioCan recent coverage

• July 2017 issue
• May 2017 issue

ENCANA CORP., $11.62, Toronto symbol ECA, has four key properties: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas). In addition to natural gas, these fields produce large amounts of oil and natural gas liquids such as propane and butane.

As part of its plan to focus on those four properties, Encana has agreed to sell its Piceance natural gas operations in northwestern Colorado to Caerus Oil and Gas. It will receive $735 million U.S. when it completes the deal in the third quarter of 2017.

The company will likely use the cash to pay down its long-term debt of $5.8 billion U.S. (as of March 31, 2017). That’s equal to 72% of its currently depressed $10.7 billion (Canadian) market cap.

OUR RECOMMENDATION: Encana is now a hold.

Encana recent coverage

• Hotline for June 2, 2017
• June 2017 issue

SUNCOR ENERGY INC., $39.26, Toronto symbol SU, is Canada’s largest integrated oil company.

Suncor owns 53.74% of the Syncrude oil sands project in Alberta. On March 14, 2017, an explosion and fire damaged the part of the facility responsible for upgrading heavy oil. That process converts raw bitumen to light crude oil in order to transport it by pipeline.

The company expected the upgrading facility to resume full production in June. However, it has decided to begin scheduled maintenance this month instead of waiting until the fall. As a result, the facility should reach full capacity in mid-July.

Despite the delay, Suncor still expects to produce an average of 680,000 to 720,000 barrels a day for all of 2017. That includes 135,000 to 150,000 barrels from Syncrude.

OUR RECOMMENDATION: Suncor is a buy.

Suncor recent coverage

• July 2017 issue
• June 2017 issue

Our next Hotline will go out on Friday, June 23, 2017.

The post The Successful Investor Hotline – Friday, June 16, 2017 appeared first on TSI Wealth Network.

SHAWCOR LTD. $38 (Toronto symbol SCL; CyclicalGrowth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 69.9 million; Market cap: $2.7 billion; Dividend yield: 1.6%; Dividend Sustainability Rating: Above Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also makes electrical wire, protective sheaths and other industrial products.

ShawCor last increased its quarterly dividend in May 2014 by 20.0%, to $0.15 a share from $0.125. The annual rate of $0.60 yields 1.6%.

The company’s order backlog was $650 million as of December 31, 2016. In addition, ShawCor is currently working with customers on projects worth over $1.7 billion. Meanwhile, it also continues to wait on decisions involving over $700 million worth of bids. The company’s strong reputation should help it win a significant share of those orders.

ShawCor is a buy.

RIOCAN REAL ESTATE INVESTMENT TRUST $26 (Toronto symbol REI.UN; Cyclical-Growth Payer Portfolio, Manufacturing & Industry sector; Units outstanding: 325.5 million; Market cap: $8.5 billion; Dividend yield: 5.4%; Dividend Sustainability Rating: Above Average; TSINetwork Rating: Average; www.riocan.com) owns all or part of 300 shopping centres in Canada. That includes the 15 now under development.

The trust pays a monthly distribution of $0.1175 a unit, for a 5.4% annualized yield. In 2016, distributions accounted for 91.4% of its cash flow. That’s slightly above its target payout of 90%.

Online shopping continues to hurt demand for retail space at RioCan’s malls. In response, it has begun to add office and residential units to its properties, particularly those in urban markets.

RioCan also continues to find new tenants for the 26 stores vacated by Target Canada in 2015. Since then, the trust has divided many of these large-format stores into multiple outlets.

RioCan has now signed or is in advanced discussions for 47 leases on those spaces. By the end of 2017, it expects these deals will replace 122% of the annual rental revenue it received from Target’s 26 stores.

RioCan is a buy.

CHEMTRADE LOGISTICS INCOME FUND $18 (Toronto symbol CHE.UN; High-Growth Payer Portfolio, Manufacturing & Industry sector; Units outstanding: 94.2 million; Market cap: $1.7 billion; Dividend yield: 6.7%; Dividend Sustainability Rating: Average; www.chemtradelogistics.com) has completed its $308 million purchase of Canexus Corp. That firm produces and then sells sodium chlorate and chlor-alkali products to the pulp and paper, water treatment, and oil and gas industries.

Canexus looks like a good fit for Chemtrade, and will let it keep paying monthly distributions of $0.10 a unit; the annual rate of $1.20 yields 6.7%.

Chemtrade is a buy.

The post 3 aggressive picks offer sustainable dividends appeared first on TSI Wealth Network.

SNC-LAVALIN GROUP INC., $56.74, Toronto symbol SNC, is a leading Canadian engineering and construction company.

SNC has completed its acquisition of U.K.-based engineering firm WS Atkins plc.

Atkins specializes in industrial projects such as railways, nuclear power plants, water-treatment facilities and highways. The purchase should cut SNC’s exposure to cyclical oil and gas clients. Before the purchase, those clients supplied 46% of its revenue.

The company paid $3.6 billion for Atkins. That’s equal to 43% of its current market cap (the total value of all outstanding shares) of $8.4 billion.

To help fund this purchase, SNC sold $880 million worth of common shares at $51.45 a share. The company also sold $400 million of common shares at the same price to the Caisse de dépôt et placement du Québec. It manages the province’s public pension plan and also lent SNC $1.5 billion.

Eliminating overlapping operations should cut $120 million from the combined company’s annual costs by the end of the first year. That will help SNC pay down the added debt. However, big acquisitions like this add risk.

OUR RECOMMENDATION: SNC-Lavalin is still a hold.

SNC-Lavalin recent coverage

• June 2017 issue
• Hotline for April 13, 2017

CANADIAN IMPERIAL BANK OF COMMERCE, $106.06, Toronto symbol CM, has completed its acquisition of Chicago-based PrivateBancorp Inc.

PrivateBancorp mainly lends to small and mid-sized businesses and also provides wealth-management services. In addition to Chicago, it operates in 11 other U.S. markets.

CIBC paid $5.0 billion U.S. for the firm—$2.4 billion U.S. in cash (48% of the total price) and $2.6 billion U.S. worth of common shares (52%).

To put that amount in context, the bank earned $1.1 billion (Canadian), or $2.64 a share, in the quarter ended April 30, 2017.

CIBC expects to spend another $130 million U.S. to $150 million U.S. to integrate PrivateBancorp. However, the new operations should begin to lift the bank’s overall earnings in the third year. The purchase also helps cut CIBC’s high exposure to Canada, which supplies 85% of its revenue. Moreover, the bank plans to cross-sell other services to PrivateBancorp’s high-quality clientele.

OUR RECOMMENDATION: CIBC is a buy.

CIBC recent coverage

• July 2017 issue
• Hotline for May 19, 2017

LINAMAR CORP., $64.09, Toronto symbol LNR, makes a variety of automotive parts, including cylinder heads, cylinder blocks, camshafts, crankshafts and connecting rods. It also makes self-propelled, scissor-type elevating work platforms.

This week, the company agreed to buy three plants that make aluminum auto parts. Two of the facilities are in France, with the third in Spain.

Linamar will pay roughly $8.8 million when it completes the purchase in the next few weeks. That price is equal to 6% of the $145.1 million, or $2.20 a share, that the company earned in the first quarter of 2017.

The new plants should expand Linamar’s market share in Europe. They will also help it profit as automakers switch to lighter metals, including aluminum, to comply with increasingly tough fuel-economy standards.

OUR RECOMMENDATION: Linamar is a buy.

Linamar recent coverage

• May 2017 issue
• Hotline for March 10, 2017

RIOCAN REAL ESTATE INVESTMENT TRUST, $24.29, Toronto symbol REI.UN, owns all or part of 300 shopping centres in Canada. That includes 15 properties now under development.

The trust recently sold a property in Vancouver for $94.2 million. It has also agreed to sell a portfolio of six bank branches in B.C. for $30.3 million. To put those figures in context, RioCan’s cash flow was $142.8 million, or $0.44 a unit, for the three months ended March 31, 2017.

Those recent sales are part of the trust’s long-term plan to sell less-important properties. It plans to then invest the proceeds in more-promising developments—mainly mixed-use (retail, office and residential) properties in urban areas.

OUR RECOMMENDATION: RioCan is a buy.

RioCan recent coverage

• July 2017 issue
• Hotline for June 16, 2017

MOLSON COORS CANADA INC., Toronto symbols TPX.A $111.00 and TPX.B $110.66, is the world’s third largest brewer. Its main brands include Molson Canadian, Coors Light and Carling.

The company now plans to build a new brewery in Montreal. It will replace the current 231-year-old facility, which is on a different site.

The new brewery will cost roughly $500 million Canadian, or about $386 million U.S. To put that in perspective, Molson earned $165.6 million U.S., or $0.76 U.S. a share, in the quarter ended March 31, 2017.

The company plans to redevelop part of the current site into a microbrewery and retail outlet. It will sell the rest of the property, which will help offset the costs of the new facility.

Investors holding class B shares of Molson Coors have less voting power to elect directors than those with class A shares. But the B shares are more liquid and receive the same dividend. The current annual dividend rate of $1.64 U.S. a share yields 1.9% for the A shares (1.9% for the B shares).

OUR RECOMMENDATION: Molson Coors B is a buy.

Molson Coors recent coverage

• Hotline for June 9, 2017
• June 2017 issue

Our next Hotline will go out on Friday, July 14, 2017.

The post The Successful Investor Hotline – Friday, July 7, 2017 appeared first on TSI Wealth Network.

PEMBINA PIPELINE CORP., $42.99, Toronto symbol PPL, recently agreed to buy rival pipeline operator VERESEN INC., $18.31, Toronto symbol VSN.

Under the deal, Veresen investors can choose either $18.65 in cash or 0.4287 shares of Pembina for each share they hold. However, Pembina has capped the total amount of cash it will pay. As a result, most Veresen shareholders will get $4.8494 in cash and 0.3172 of a Pembina share. Based on the current Pembina share price, that would equal $18.49 per Veresen share. That’s more than the current trading price and indicates that investors don’t expect a higher offer. Veresen has gained about 20% since Pembina announced its takeover bid.

This week, Veresen shareholders voted to accept the Pembina’s offer. The companies now expect to complete the deal by September 30, 2017.

Following the purchase, Pembina will raise its monthly dividend by 5.9%, to $0.18 from $0.17. The new annual rate of $2.16 will yield a high 5.0%. Pembina’s TSI Dividend Sustainability Rating is Above Average.

We recommend that Veresen investors select the all-stock option. However, if Pembina already accounts for a large portion of your portfolio, you should opt for the cash.

OUR RECOMMENDATION: Pembina is a top buy for 2017. Veresen investors should tender their shares to Pembina.

Pembina recent coverage

• June 2017 issue
• May 2017 issue

Veresen recent coverage

• June 2017 issue
• April 2017 issue

MANULIFE FINANCIAL CORP., $25.23, Toronto symbol MFC, is Canada’s largest life insurance company. It also sells other forms of insurance, including health, dental and travel plans, as well as mutual funds and investment management services.

In 2004, the company paid $15 billion for U.S. insurer John Hancock Financial. As a result of this and other acquisitions, the U.S. is now the company’s largest market, accounting for 36% of its 2016 earnings, followed by Asia (33%) and Canada (31%).

Manulife last raised its quarterly dividend with the March 2017 payment. Investors now receive $0.205 a share, up 10.8% from $0.185. The new annual rate of $0.82 yields 3.3%.

The stock rose this week on news Manulife may be planning to set up John Hancock as a separate company and either sell shares through an IPO or hand them out to its investors through a spinoff.

Investor demand for a John Hancock IPO could be strong, particularly as rising U.S. interest rates would let the insurer earn higher returns on its investment portfolio. A spinoff would also let Manulife focus on expanding in Asia, where an expanding middle class continues to spur demand for insurance and retirement planning services.

The company’s dividend has increased by an average of 9.5% annually over the past 5 years. The company’s TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: Manulife is a buy.

Manulife Financial recent coverage

• July 2017 issue
• March 2017 issue

RIOCAN REAL ESTATE INVESTMENT TRUST, $24.45, Toronto symbol REI.UN, owns all or part of 300 shopping centres in Canada. That includes 15 properties now under development.

RioCan Investors receive a monthly distribution of $0.1175 per unit for an annual rate of $1.41. It yields a high 5.8%.

The trust recently sold a property in Vancouver for $94.2 million. It has also agreed to sell a portfolio of six bank branches in B.C. for $30.3 million. To put those figures in context, RioCan’s cash flow was $142.8 million, or $0.44 a unit, for the three months ended March 31, 2017.

Those recent sales are part of the trust’s long-term plan to sell less-important properties. It plans to then invest the proceeds in more-promising developments—mainly mixed-use (retail, office and residential) properties in urban areas.

RioCan’s TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: RioCan is a buy.

RioCan recent coverage

• July 2017 issue
• April 2017 issue

CANADIAN IMPERIAL BANK OF COMMERCE, $108.16, Toronto symbol CM, is Canada’s fifth-largest bank, with total assets of $513.3 billion.

With the April 2017 payment, the bank raised its quarterly dividend by 2.4%, to $1.27 a share from $1.24. The new annual rate of $5.08 yields a high 4.7%.

CIBC has now agreed to buy privately held Geneva Advisors, a Chicago-based wealth management firm. It will pay $200 million U.S. (consisting of 25% in cash and 75% in CIBC shares). It expects to complete the purchase later this year.

Geneva Advisors focuses on high-net-worth clients, and has $8.4 billion U.S. in assets under administration. Following the purchase, CIBC’s American operations will have $50 billion U.S. in assets under administration. Much of that will come from Chicago-based PrivateBancorp Inc.

CIBC has now completed its acquisition of that lender to small and mid-sized businesses. The firm also provides wealth-management services and operates in 12 other U.S. markets.

CIBC paid $5.0 billion U.S. for PrivateBancorp.—$2.4 billion U.S. in cash (48% of the total price) and $2.6 billion U.S. worth of common shares (52%). Geneva Advisors seems like a good fit with that operation.

To put the PrivateBancorp purchase price in context, the bank earned $1.1 billion (Canadian), or $2.64 a share, in the quarter ended April 30, 2017.

CIBC’s dividend has grown an average of 7.1% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Highest.

OUR RECOMMENDATION: CIBC is a buy.

CIBC recent coverage

• Hotline for May 26, 2017
• April 2017 issue

WYNDHAM WORLDWIDE CORP., $102.10, New York symbol WYN, is one of the world’s largest hospitality companies, with 8,040 franchised hotels globally. The company also manages vacation resorts, rental properties, luxury clubs and timeshares. It currently has around 112,000 vacation-rental properties in 100 countries.

Wyndham last raised its quarterly dividend by 16.0%, with the March 2017 payment. Investors now receive $0.58 a share. That’s up from $0.50 and makes for an annual yield of 2.3%.

Wyndham has now added a 19^th hotel brand—The Trademark Hotel Collection.

Trademark is designed for independent entrepreneurs who have built an “iconic” hotel and are looking to boost their businesses with Wyndham’s support and loyalty program. The brand is aimed at hoteliers who operate 3- to 4-star hotels and want to maintain their individuality.

Trademark should be a direct competitor to Choice Hotels’s Ascend Collection and Hilton’s Tapestry Collection.

There are currently 13 Trademark Hotel Collection properties in Germany and one hotel in Switzerland. Wyndham expects the Trademark brand to jump to a total of 50 hotels in the near term, including both existing and new-build properties.

Unlike Wyndham’s “hard” hotel brands, such as Grand and Travelodge, Trademark is a “soft” brand. That means it’s more loosely defined and allows independent hoteliers to maintain their own unique branding. They will, however, gain access to the more than 50 million Wyndham Rewards members and the company’s global distribution network of more than 8,000 hotels.

Wyndham’s dividend has grown an average of 20.3% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Above Average.

OUR RECOMMENDATION: Wyndham Worldwide is a hold.

Wyndham Worldwide recent coverage

• Hotline for May 12, 2017
• Hotline for May 5, 2017

Our next Hotline will go out on Friday, July 21, 2017.

The post Dividend Advisor Hotline – Friday, July 7, 2017 appeared first on TSI Wealth Network.

RIOCAN REAL ESTATE INVESTMENT TRUST $25.78 (Toronto symbol REI.UN; Units outstanding: 325.6 million; Market cap: $8.5 billion; TSINetwork Rating: Average; Dividend yield: 5.5%; www.riocan.com) is Canada’s largest real estate investment trust.

In the three months ending December 31, 2016, RioCan’s revenue rose only slightly, to $291.6 million from $291.1 million a year earlier. That’s because the REIT sold its U.S. portfolio in May 2016. However, the sale was offset by the new properties RioCan bought in 2016 for $595 million.

Cash flow—excluding the U.S. properties—increased 17.9% in the latest quarter, to $132.0 million from $112.0 million a year earlier. Due to more units outstanding, cash flow per unit fell 9.1%, to $0.40 from $0.44.

To counter the negative impact that online shopping has had on mall traffic, RioCan continues to redevelop some of its retail properties to include office and residential space. The trust has also begun to seek out mall tenants that sell experiences instead of goods. That includes cinemas and fitness clubs. As well, it will add more food stores, which should increase repeat visits to its shopping centres.

RioCan trades at 17.4 times its forecast 2017 cash flow of $1.48 a unit. That’s reasonable in light of the REIT’s highly profitable properties. The units yield 5.5%.

RioCan is a top pick for 2017.

H&R REIT $23.00 (Toronto symbol HR.UN; Units outstanding: 286.3 million; Market cap: $6.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.0%; www. hr-reit.com) owns, or has a stake in, 522 office buildings, industrial properties and shopping malls across Canada and the U.S. In all, these holdings include 46.7 million square feet of leasable space.

The trust’s revenue rose 3.1% for the three months ended December 31, 2016, to $305.5 million from $296.2 million a year earlier. Cash flow was unchanged at $142.9 million, or $0.48 a share.

Construction continues to progress on H&R’s joint venture project with U.S. real estate firm Tishman Speyer. The two firms are building an upscale 1,871-unit apartment complex in New York City, for $1.2 billion U.S.

Tenants are scheduled to begin occupying the first tower in early 2018. Upon completion, the complex is forecast to contribute $23.0 million U.S. annually to H&R’s cash flow.

In November 2016, the trust sold 50% of the TransCanada Tower in Calgary for net proceeds of $163.9 million. It will use the funds for acquisitions and to pay down its debt.

H&R REIT trades at 12.2 times its forecast 2017 cash flow of $1.89 a unit. With the December 2016 payment, the trust raised its monthly distribution by 2.2%. The units yield 6.0%.

H&R REIT is a buy.

The post High-yield REITs with gains ahead appeared first on TSI Wealth Network.

PENGROWTH ENERGY CORP. $1.18 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 547.7 million; Market cap: $646.3 million; Price-to-sales ratio: 1.1; Dividend suspended in January 2016; TSINetwork Rating: Speculative; www. pengrowth.com) produces oil and natural gas in Western Canada and off the coast of Nova Scotia.

Since the start of 2017, the company has sold several of its less-important operations for a total of $707 million.

Pengrowth is using the cash to pay down its debt, including $100 million U.S. in notes due July 2017. After it retires those notes, its debt will total $700 million. That’s still a high 101% of its market cap. However, it only begins repaying those remaining loans in August 2018.

Pengrowth is still a hold.

SNC-LAVALIN GROUP INC. $54 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.2 million; Market cap: $8.1 billion; Price-to-sales ratio: 1.0; Dividend yield: 2.0%; TSINet work Rating: Average; www.snclavalin. com) is a leading Canadian engineering and construction company that specializes in large-scale infrastructure projects such as roads, bridges, transit systems and water-treatment plants.

The company has agreed to acquire U.K.-based engineering firm WS Atkins plc for $3.5 billion. That’s equal to 40% of SNC’s market cap. It expects to complete the purchase in the third quarter of 2017.

Atkins specializes in industrial projects such as railways, nuclear power plants, water-treatment facilities and highways. Its purchase would cut the company’s exposure to cyclical oil and gas clients. They now supply 45% of SNC’s revenue. However, big acquisitions add risk.

SNC-Lavalin is a hold.

RIOCAN REAL ESTATE INVESTMENT TRUST $26 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 325.5 million; Market cap: $8.5 billion; Price-to-sales ratio: 7.2; Dividend yield: 5.4%; TSINetwork Rating: Average; www. riocan.com) will team up with Killam Apartment Real Estate Investment Trust (Toronto symbol KMP.UN) to build and operate four new residential towers next to RioCan’s Gloucester Silver City Shopping Centre in Ottawa. The partners expect to complete this project in 2019.

Adding more residential and office properties helps cut RioCan’s reliance on its 300 shopping malls. That strategy is particularly important as online shopping continues to hurt demand for retail space.

RioCan is a buy.

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RIOCAN REAL ESTATE INVESTMENT TRUST $25.30 (Toronto symbol REI.UN; Units outstanding: 325.7 million; Market cap: $8.2 billion; TSINetwork Rating: Average; Dividend yield: 5.6%; www.riocan.com) owns all or part of 300 shopping centres in Canada. That includes 15 properties under development.

The trust has now agreed to sell 50% of its Sunnybrook Plaza retail property in midtown Toronto to Concert Real Estate Corp. RioCan will receive $26.3 million when it completes the sale in June 2017. To put that amount in context, its cash flow in the first quarter of 2017 was $142.8 million, or $0.44 a unit.

The partners plan to re-develop the Sunnybrook property, including building two residential towers on the site. Once completed, RioCan will continue to manage the retail portion of the complex.

RioCan is a buy.

INNERGEX RENEWABLE ENERGY $14.63 (Toronto symbol INE; Shares outstanding: 108.4 million; Market cap: $1.6 billion; TSINetwork Rating: Extra Risk; Dividend yield 4.5%; www.innergex.com) has started up its new 66.7%-owned, 25.3-megawatt Boulder Creek hydroelectic plant in B.C.

Innergex has chosen to grow slowly by building hydroelectric and solar plants instead of buying them. To further cut risk, it makes sure it has long-term power-purchase contracts in place before it builds, or buys, new plants.

The Boulder Creek plant has sold all of its power to BC Hydro under a 40-year power purchase agreement. The contract also provides an annual adjustment based on the rate of inflation.

Innergex is a buy.

IBM $152.63 (New York symbol IBM; Shares outstanding: 939.5 million; Market cap: $143.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.ibm. com) is one of the world’s largest computer companies, with operations in over 175 countries. The company continues to win big contracts for its services. The latest is with Bombardier, a recommendation of our Successful Investor newsletter.

This six-year contract is worth $700 million U.S. Bombardier will outsource to IBM its computer information systems.

IBM’s expertise should improve the efficiency of Bombardier’s computer systems in 47 countries. Converting those networks to a cloud-based model, which uses the Internet to store data remotely, should also lower costs for Bombardier.

IBM is still a buy.

The post Updates on RioCan Real Estate Investment Trust, Innergex Renewable Energy and IBM appeared first on TSI Wealth Network.

TSX Blue Chip Stocks Are Key Components Of Successful Investor Portfolios

TSX blue chip stocks are well-established companies with attractive business prospects on the Toronto Stock Exchange, like Bank of Montreal (TSE: BMO), RioCan Real Estate Investment Trust (TSX: REI.UN), and Enbridge (TSE: ENB). Well-established firms have the asset size and the financial clout—including solid balance sheets and strong earnings and cash flow—to weather market downturns or changing industry conditions.

The best TSX blue chip stocks have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in ever-changing marketplaces. Blue chip investments should always be prominent, if not dominant firms, in their industry.

Because of this, blue chip companies can give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.

We feel most investors should hold the bulk of their investment portfolios in TSX blue chip stock investments. All these stocks should offer good “value”—that is, they should trade at reasonable multiples of earnings, cash flow, book value and so on. Ideally, they should also have above average-growth prospects, compared to alternative investments.

11 tips for picking the best TSX blue chip stocks:

1. Review the company’s finances going back 5 to 10 years. The types of blue chip investments we recommend have a history of profits going back for at least that long. Companies that make money regularly are safer than chronic or even occasional money losers.

2. TSX blue chips stocks should pay dividends. Review a company’s five-to-10-year record of paying dividends. Companies can fake earnings, but dividends are cash outlays. If you only buy dividend-paying value stock picks, you’ll avoid most frauds.

3. However, be wary of any blue chip stock with an unusually high dividend yield. Investors should avoid judging a company based solely on its dividend yield (the percentage you get when you divide a company’s current yearly payment by its share price). That’s because a high yield can sometimes be a danger sign rather than a bargain. For example, a dividend-paying stock’s yield could be high simply because its share price has dropped sharply (because you use a company’s share price to calculate yield) in anticipation of a dividend cut.

4. Good TSX blue chips have low debt. It doesn’t matter if you’re investing in blue chip stocks or penny stocks, the company under consideration should have manageable debt. When bad times hit, debt-heavy companies often go broke first.

5. TSX blue chip investments should have industry prominence if not dominance. Major companies can influence legislation, industry trends and other business factors to suit themselves.

6. The best blue chip investments have geographical diversification. Canada-wide is good, multinational better. There’s extra risk in firms confined to one geographical area.

7. Good TSX blue chip stocks have the freedom to serve (all) shareholders. High-quality stock picks must be free of excess regulation, free of dependence on a single customer, and free from self-dealing insiders or parent companies.

8. Some of your TSX blue chip stocks should have freedom from business cycles. Demand periodically dries up in “cyclical” businesses, such as resources and manufacturing. You can hold some blue chips from those sectors, but look as well for companies that have broad product lines or products that are indispensable.

9. TSX blue chip companies should have ownership of strong brand names and an impeccable reputation. Customers keep coming back to these businesses, and will try their new products.

10. Good blue chip investments may have hidden assets in the form of real estate. For instance, when a company buys real estate, the purchase price goes on its balance sheet as the historical value of the asset. Over a period of years or decades, the market value of that real estate may climb substantially. But the historical value remains unchanged on the balance sheet. You have to look closely to spot this hidden value. At times, the hidden value in a company’s real estate can come to exceed the market value of its stock. This hidden value may only become apparent to investors when the company upgrades the use of the real estate. For example, a merchandiser might repurpose a parking lot to build a shopping mall with a residential condo tower on higher floors, and a parking garage down below.

11. Some TSX blue chip stocks may have a hidden asset in their relationship with loyal customers. After a series of satisfactory dealings, long-time customers develop a level of trust that makes them receptive to related offerings from the company. For example, Apple Computer was able to move into the digital music player and smartphone businesses as quickly as it did because it had an established core of fans for its Mac computers.

TSX and NYSE blue chips? In the long term, which group do you favour?

Hidden assets can turn a blue chip stock into a goldmine. Have you had success with finding hidden assets? What do you look for?

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RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 326.9 million; Market cap: $8.2 billion; Price-to-sales ratio: 7.2; Dividend yield: 5.6%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 300 shopping centres in Canada. That includes 15 properties now under development. The REIT’s occupancy rate is a high 94.4%.

In the three months ended March 31, 2017, revenue rose 2.1%, to $289.7 million from $283.8 million a year earlier. The trust continues to renew expiring leases at higher rental rates. Cash flow per unit jumped 31.0%, to $0.44 from $0.34.

RioCan has maintained its monthly distributions of $0.1175 a unit. The annual rate of $1.41 yields a high 5.6%. In the past 12 months, distributions accounted for 83.9% of its cash flow. RioCan is a buy.

The post Higher rents lift RioCan’s cash flow appeared first on TSI Wealth Network.

RIOCAN REAL ESTATE INVESTMENT TRUST, $23.70, Toronto symbol REI.UN, owns all or part of 299 shopping centres in Canada. That includes 15 properties now under development. In July 2012, RioCan formed a 50/50 joint venture with Allied Properties Real Estate Investment Trust (Toronto symbol AP.UN). Their goal was to purchase buildings in urban areas and […]

The post The Successful Investor Hotline – Friday, September 22, 2017 appeared first on TSI Wealth Network.

BCE INC., $60.58, Toronto symbol BCE, is Canada’s largest traditional telephone service provider, with 6.4 million customers in Ontario, Quebec, Manitoba and the Atlantic provinces. It also has 3.8 million high-speed Internet users and 2.8 million TV subscribers. In addition, the company sells wireless services to 9.0 million users across Canada, and owns TV and […]

The post The Successful Investor Hotline – Friday, November 3, 2017 appeared first on TSI Wealth Network.

BANK OF NOVA SCOTIA, $81.84, Toronto symbol BNS, has offered to acquire 68.19% of BBVA Chile. With total assets of $29 billion (Canadian), it’s the sixth-largest bank in the South American country. Bank of Nova Scotia will pay BBVA’s parent company, Banco Bilbao Vizcaya Argentaria, S.A., $2.9 billion for that stake. The Said family controls […]

The post The Successful Investor Hotline – Friday, December 1, 2017 appeared first on TSI Wealth Network.

LOBLAW COMPANIES LTD., $68.19, Toronto symbol L, operates 1,096 supermarkets across Canada. It also owns the Shoppers Drug Mart chain of 1,323 drugstores. George Weston Ltd. (Toronto symbol WN) owns 48.5% of Loblaw. It’s also a leading producer of fresh and frozen baked goods. In March 2015, Loblaw and Weston discovered that certain employees colluded […]

The post The Successful Investor Hotline – Friday, December 22, 2017 appeared first on TSI Wealth Network.

RIOCAN REAL ESTATE INVESTMENT TRUST, $24.40, Toronto symbol REI.UN, owns all or part of 299 shopping centres in Canada. That includes 15 properties now under development. The REIT will now raise its monthly distribution for the first time since 2013. Starting with the February 2018 payment, it increases that distribution by 2.1%. Investors will receive […]

The post Dividend Advisor Hotline – Friday, January 5, 2017 appeared first on TSI Wealth Network.

TRANSCANADA CORP., $57.61, Toronto symbol TRP, operates a 91,500-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. Other operations include 4,800 kilometers of crude oil pipelines and 12 power plants. TransCanada continues to benefit from its $13 billion U.S. acquisition of Texas-based Columbia Pipeline Group in July 2016. Columbia […]

The post The Successful Investor Hotline – Friday, February 16, 2018 appeared first on TSI Wealth Network.

SUNCOR ENERGY INC., $42.91, Toronto symbol SU, is Canada’s largest integrated oil company, with its major projects in the Alberta oil sands. It also owns four refineries (three in Canada and one in Colorado), along with 1,500 Petro-Canada gas stations. Suncor recently increased its stake in the Syncrude oil sands project in northern Alberta, from […]

The post The Successful Investor Hotline – Friday, March 16, 2018 appeared first on TSI Wealth Network.

SUNCOR ENERGY INC., $42.90, Toronto symbol SU, is Canada’s largest integrated oil company, with its major projects in the Alberta oil sands. It also owns four refineries (three in Canada and one in Colorado), along with 1,500 Petro-Canada gas stations. With the March 26, 2018 payment, Suncor raises its quarterly dividend by 12.5%. Investors will […]

The post Dividend Advisor Hotline – Friday, March 23, 2018 appeared first on TSI Wealth Network.

BCE INC., $52.90, Toronto symbol BCE, is Canada’s largest traditional telephone service provider, with 3.05 million residential customers in Ontario, Quebec, Manitoba and the Atlantic provinces. It also has 3.9 million high-speed Internet users and 2.8 million TV subscribers. In addition, the company sells wireless services to 9.5 million users across Canada and owns TV […]

The post The Successful Investor Hotline – Friday, November 2, 2018 appeared first on TSI Wealth Network.