This Blog has recommended extreme caution continually since mid April. With markets gyrating up and down, I’d like to recommend some safer Large Cap Canadian Value Stocks. These usually offer lower Price to Earnings Ratios and Higher Dividend Yields. My top value picks are as follows:
- Financials:
- Bank of Montreal (BMO ) paying a 4.53% annual dividend
- CIBC (CM) 5.09%
- National Bank (NA) 4.34%
- Royal Bank (RY) 3.84% (stock also declined 3.83% this past week)
- TD 3.39%
- AGF Management (AGF.B) 7.20%
- Telecommunications:
- Bell Alliant Trust Units (BA.UN) 11.57%
- BCE 5.44%
- Rogers (RCI.B) 3.45%
- Shaw (SJR.B) 4.28%
- Telus (T) 4.78%
- Energy and Trust Units:
- Cineplex Galaxy (CGX.UN) 6.49%
- Crescent Point Energy (CPG) 7.33%
- Encana (ECA) 2.58% (declined 4.08% this week)
- Pengrowth (PGF.UN) 8.28%
- Vermillion (VET.UN) 6.67%.
Be careful with trust units as most convert to corporations in 2011.
Longer Terms Picks
- Financial and Insurance Companies:
- Great West Life (GWO) 5.03%
- Manulife (MFC) 3.45% (hit a new 52 week low this past week)
- Power Financial (PWF) 4.88%
- Sunlife (SLF) 5.30%.
These companies should be watched as they tend to mirror market conditions and could still fall.
Market Mirrors: When markets improve again, keep a close eye on Canadian Natural Resources (CNQ) & Teck (TCK.B).
- Preferred Shares: Most banks pay 5.7%, CIBC & National paying slightly higher. Insurance companies pay around 6.0%. Topping the list are Bombardier (BBD.PR.C & D) @ 7.0%, Brookfield Properties (BPO.PR.L & N) @ 6.45% & 6.15%. Recommendation is for Canadian Western Bank (CWB.A) @ 6.54%.
- High Yielding Corporate Bonds: (for RSP’S) 10 year bonds: YPG Holdings @ 6.76% & Fairfax Financial @ 6.76%.
Be wary and sell in to strength, Warren.
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