Posted by BM on January 24, 2022
“This is the one thing I can never understand. To refer to a personal taste of mine, I’m going to buy hamburgers for the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up, we weep. For most people, it’s the same way with everything in life they will be buying–except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.” – Warren Buffett
Another negative week for stock markets to begin the New Year. Canadian markets have been spared much of the carnage south of the border with tech heavy indexes now down double digits year to date. Canadian tech company Shopify (SHOP-T) however followed suit with the US tech drawdown and is now down 36% since January 1. If you are an investor now in these high-tech stocks, then you are betting that growth will continue. We trimmed our ‘expensive’ positions in some of our Magic Pants Wealth-Builder portfolios over the past year and more recently. Waiting to buy some cheap ‘hamburgers’ soon.
Looking to get paid no matter what the markets do in the short run is one of the reasons we switched to dividend growth investing years ago. When markets start reacting to all the negative narratives out there, we take comfort in the income our portfolios produce and wait for buying opportunities to increase our income even further. When prices drop, yields rise which means we get more income for our money. Having a watchlist ready is key to taking advantage of market downturns. Fortunately, we have the Magic Pants list (The List) to monitor for buying opportunities.
Performance of ‘The List’
The best performers last week on ‘The List’ were Intact Financial (IFC-T) up 2.3%; Brookfield Infrastructure Partners (BIP-N) up 1.5%; Algonquin Power & Utilities (AQN-T) up 1.3%.
Magna (MGA-N) was the worst performer this week, down -12.1%.
‘The List’ was down this week -2.0% with a -2.9% YTD price return loss (capital) and an average of 4.7% dividend increase (income).
Dividend Increases
There were no dividend increases announced from companies on ‘The List’ this past week.
Earnings Releases
There were no earnings releases announced from companies on ‘The List’ this past week.
Canadian National Railway (CNR.TO) is scheduled to report this week on Tuesday, January 25, 2022
Metro Inc. (MRU.TO) is scheduled to report this week on Tuesday, January 25, 2022
Recent News
CN Rail Price Target Increased to $168 at Raymond James ahead of earnings
11:38 AM EST, 01/21/2022 (MT Newswires) — Raymond James raised its price target on Canadian National Railway Ltd. (CNR.TO, CNI) to $168 from $158 on Friday.
Analyst Steve Hansen maintained a Market Perform rating on shares of the Class I railway ahead of its fourth quarter results.
Hansen said CN is expected to see more healthy and normal traffic growth in 2023, and an increased effort on internal cost control.
“In the more immediate term, however, we continue to see traffic growth as challenged, with 4Q21 & 1H22 still grappling with lingering weather-related issues (floods & frost), a drought-afflicted Canadian harvest, and broader supply-chain congestion affecting key categories such as Intermodal & Auto,” the analyst said in a note to clients.
“Against this volatile backdrop, with leadership issues still unresolved, we view CN’s share price as reasonably valued at current levels,” Hansen said.
Metro Price Target Raised to $68 at ATB Ahead of Earnings Results
11:21 AM EST, 01/20/2022 (MT Newswires) — ATB Capital Markets raised its price target on Metro Inc. (MRU.TO) to $68 from $65.
Analyst Kenric Tyghe maintained a Sector Perform rating on shares of the Montreal-based food retailer ahead of its fiscal first quarter result on January 25.
“While our estimates for the quarter are unchanged ahead of the results, we have made (modest) positive revisions to both upcoming quarters through FY2022 and FY2023, reflecting both higher (for longer) than initially expected food inflation (concentrated in fresh) and the traction of company specific supply chain and store initiatives,” Tyghe said in a note to clients.
“The pace of food from stores inflation (Food CPI) not only accelerated further in December for a print of 5.7% (and 4.8% for the calendar quarter), but the supply shocks and pressures driving the elevated levels of food inflation are not yet easing,” the analyst said.
Below is a snapshot of ‘The List’ from last Friday’s close. For a sortable version of ‘The List’ please click on The List menu item.
‘The List’ is not meant to be a template for investors to copy exactly. Rather, its purpose is to provide investment ideas and a real-time illustration of dividend growth investing in action. It is not a ‘Buy List’, only a starting point for our analysis and discussion.
The List (2022)
Last updated by BM on January 21, 2022
*Note: The following graph is wide, you can scroll to the right on your device to see more of the data.
| SYMBOL | COMPANY | YLD | PRICE | YTD % | DIV | YTD % | STREAK |
|---|---|---|---|---|---|---|---|
| AQN-N | Algonquin Power & Utilities | 4.9% | $14.02 | -2.3% | $0.68 | 2.3% | 11 |
| ATD-T | Alimentation Couche-Tard Inc. | 0.9% | $48.57 | -6.8% | $0.44 | 18.1% | 12 |
| BCE-T | Bell Canada | 5.3% | $65.47 | -0.7% | $3.50 | 1.2% | 13 |
| BIP-N | Brookfield Infrastructure Partners | 3.4% | $60.44 | -1.1% | $2.04 | 0.0% | 14 |
| CCL-B-T | CCL Industries | 1.3% | $64.60 | -4.7% | $0.84 | 0.0% | 20 |
| CNR-T | Canadian National Railway | 1.6% | $154.54 | -0.2% | $2.46 | 0.0% | 26 |
| CTC-A-T | Canadian Tire | 2.9% | $178.49 | -2.6% | $5.20 | 10.6% | 11 |
| CU-T | Canadian Utilities Limited | 4.9% | $35.70 | -2.5% | $1.76 | 0.0% | 50 |
| DOL-T | Dollarama Inc. | 0.3% | $61.62 | -2.8% | $0.20 | 1.7% | 11 |
| EMA-T | Emera | 4.4% | $59.77 | -4.5% | $2.65 | 2.9% | 15 |
| ENB-T | Enbridge Inc. | 6.7% | $51.35 | 3.7% | $3.44 | 3.0% | 26 |
| ENGH-T | Enghouse Systems Limited | 1.4% | $44.48 | -3.0% | $0.64 | 4.1% | 15 |
| FNV-N | Franco Nevada | 0.9% | $130.62 | -4.0% | $1.20 | 3.4% | 14 |
| FTS-T | Fortis | 3.6% | $58.95 | -2.5% | $2.14 | 4.4% | 48 |
| IFC-T | Intact Financial | 2.2% | $164.30 | 0.4% | $3.64 | 7.1% | 17 |
| L-T | Loblaws | 1.6% | $92.46 | -10.0% | $1.46 | 6.6% | 10 |
| MGA-N | Magna | 2.2% | $78.29 | -4.0% | $1.72 | 0.0% | 12 |
| MRU-T | Metro | 1.6% | $63.56 | -5.2% | $1.00 | 0.0% | 27 |
| RY-T | Royal Bank of Canada | 3.3% | $144.65 | 5.7% | $4.80 | 11.1% | 11 |
| SJ-T | Stella-Jones Inc. | 1.8% | $39.94 | -1.8% | $0.72 | 0.0% | 17 |
| STN-T | Stantec Inc. | 1.0% | $65.54 | -6.6% | $0.66 | 0.0% | 10 |
| TD-T | TD Bank | 3.5% | $100.30 | 1.0% | $3.56 | 12.7% | 11 |
| TFII-T | TFI International | 1.1% | $121.70 | -13.2% | $1.36 | 17.4% | 11 |
| TIH-T | Toromont Industries | 1.3% | $107.16 | -5.7% | $1.40 | 6.1% | 32 |
| TRP-T | TC Energy Corp. | 5.5% | $63.09 | 5.6% | $3.48 | 1.8% | 21 |
| T-T | Telus | 4.5% | $29.40 | -1.2% | $1.31 | 4.4% | 18 |
| WCN-N | Waste Connections | 0.7% | $122.70 | -8.5% | $0.92 | 8.9% | 12 |
| Averages | 2.7% | -2.9% | 4.7% | 18 |
