Ryan Bushell, President and Portfolio Manager at Newhaven Asset Management, shares his outlook on Canadian Dividend Stocks.
Ryan Bushell, President and Portfolio manager, Newhaven Asset Management
Focus: Canadian dividend stocks
Top picks: Northland Power, Bell Canada Enterprises Inc., Canadian Natural Resources Ltd.
MARKET OUTLOOK:
Markets have continued their unexpectedly strong performance in the face of global trade barriers, geopolitical escalations, and sluggish economic data. Usually investors are not fans of uncertainty, but often when the consensus expects something, markets can do the opposite… at least for a time.
We are curious if the coming months, which are usually more difficult for equity markets, will see some reversion to the mean alongside new economic data that better incorporates tariff impacts. No doubt the anticipation of the first interest rate cut in some time from the Federal Reserve in September will be a key driver of markets with the benefit likely already priced in and a negative reaction or tantrum if the pause is continued.
Today’s CPI data does not prevent a cut, but it certainly doesn’t endorse one either. Regardless we remain cautious on behalf of our clients, choosing to remain in a mixture of infrastructure companies, dividend stalwarts, and cash, just in case we see an opportunity.
TOP PICKS:
Ryan Bushell’s Top Picks: Northland Power, BCE & CNQ Ryan Bushell, President and Portfolio Manager at Newhaven Asset Management, shares his top stock picks to watch in the market.
Northland Power (NPI TSX)
Northland Power has quietly been getting their work done across the globe and catalysts remain ahead. The Oneida battery storage project was completed early and under budget earlier this year. First power has been achieved at Hai Long in Taiwan and turbine installation is progressing at Baltic Power offshore Poland. Renewables remain an important part of a growing electricity demand picture and recontacting of existing assets is set to exceed initial expectations.
We like the new management team at Northland and have been impressed with their steady approach. Look for them to potentially monetize some of the assets purchased by the previous team and a re-entry into the gas fired power project market in North America as potential catalysts for the company in the coming quarters, along with continued execution on existing projects.
Bell Canada Enterprises Inc. (BCE TSX)
After a few recent upgrades by sell side analysts, BCE is looking interesting here. Well off the recent lows, analysts are now coming around on the Ziply acquisition as it would appear the company is making the rounds to explain itself a little more clearly. While everyone was shooting first on the company, we were accumulating a lot of stock at current levels or lower as we did not doubt the long term value of the company’s asset portfolio and though we too were frustrated with the Ziply news we did not view it as terminal to the company’s long term health either. When these big names turn around they can go a long way. Just look at Manulife, TD and Altagas in recent memory.
Canadian Natural Resources Ltd. (CNQ TSX)
Although we are not excited about oil prices at present, Canadian Natural is trading too cheaply to ignore. Recently the company inked a deal to supply feedgas for a gulf coast LNG project, which was a first for the company and indicative of the power in their Natural Gas portfolio that is often overlooked by investors. The delays in guidance on the asset swap and with Shell at AOSP combined with investor fatigue/short term trading have left CNQ’s shares with nearly a 6% dividend yield and further buybacks/dividend increases almost assured.
PAST PICKS: JULY 29, 2024
Ryan Bushell’s Past Picks: Pembina Pipeline, Arc Resources & K-Bro Linen Ryan Bushell, President and Portfolio Manager at Newhaven Asset Management, discusses his past stock picks and how they’re doing in the market today.
Pembina Pipeline (PPL TSX)
Then: $52.72
Now: $50.52
Return: -4%
Total Return: 1%
Arc Resources (ARX TSX)
Then: $23.20
Now: $26.98
Return: 16%
Total Return: 19%
K-Bro Linen (KBL TSX)
Then: $36.59
Now: $38.40
Return: 5%
Total Return: 9%
Total Return Average: 10%
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