# Would like help with new stocks to buy



## ontario99 (Apr 13, 2016)

Hello everyone,

I moved from the US to Canada in 2015 when I was in my mid-fifties, and moved some of my after-tax money over to Canada and started investing in the Canadian market. Because I am a US citizen, the only thing I can do (due to tax reasons) is to invest my non-registered money in individual companies (no ETF's or Mutual funds or bonds). Anyway, I used a RBC wealth manager at the beginning, since I had no understanding of the Canadian market, but I left her after 6 months and I have been DIY'ing in Canada since then (I added a few more companies to my portfolio in addition to what RBC started me on.) I have been DIY'ing in the US for decades, but I still need help in the Canadian market, especially because all I can buy here is individual company's stocks in my non-registered accounts.

Here is what I have now. I am trying to diversify (although I am a bit heavy on bank stocks currently) using high dividend players. I have another 30K coming in soon and I would like to add more companies to the list. Which companies am I missing in your opinion?

Thank you!


Symbol	% of Positions	Market Value
BNS	16.5	$23,408.00 
TRP	10.8	$15,277.50
SLF	10.3	$14,587.00
BCE	9.8	$13,926.50
RY	9.3	$13,161.20
TD	9.3	$13,188.60
T	8.5	$12,082.20
PWF	8.2	$11,651.20
PPL	6.2	$8,844.00
CM	4.8	$6,840.00
ENB	3.3	$4,685.00

Total $137,651.20


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## like_to_retire (Oct 9, 2016)

You're missing the utility sector. Fortis (FTS) is usually a must in the utility sector. Also in that sector are Canadian Utilities (CU) and Emera (EMA).

A decent dividend payer in the Consumer Staple sector would be North West Company (NWC).

Lots of good companies, but they don't qualify as high dividend. These would be in the 1-2% dividend. Canadian Nation Railway (CNR) in the industrial sector, Metro(MRU) or Saputo (SAP) in the Consumer Staples sector and CTC-A in the Consumer Discretionary sector. 

Anyway, these are just a few of the usual suspects you can evaluate.

ltr


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## AltaRed (Jun 8, 2009)

I will repeat what I've said numerous times. It is Total Return that matters, especially to those in accumulation mode. I do subscribe though to only owning companies that pay a dividend, but a dividend yield of 1-2% is perfectly good if ROE/ROCE, D/E, P/B, and P/E multiples are reasonable. The reason to look at both ROE and ROCE is that ROE can be double digit but ROCE can be low single digit due to excessive use of debt (D/E and ROE together are a good proxy for not calculating ROCE). For example, why not consider CN Rail with its 'low' dividend yield?


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## MrsPartridge (May 15, 2016)

I'm avoiding Metro (MRU) because of the $15 minimum wage that's coming soon. 

As for North West Company (NWC). They have stores in the Caribbean which took a bad hit due to the hurricanes this year; this could happen every year. Their stores up in the arctic are doing well but who knows if consumers will get better offers from Amazon sometime soon. 

Some of my favorite stocks don't have high dividends but I'm happy I bought them:
CCL.B (packaging)
PBH (Premium Brands)
QBR (Quebecor)


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## like_to_retire (Oct 9, 2016)

hehe, Mrs. P, I could certainly come up with examples of possible headwinds with all the companies that you mentioned, including my own mention of SAP and the future effects of free trade talks and marketing boards, but I think we're just trying to offer some examples for the OP to vet for himself. 

ltr


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## ontario99 (Apr 13, 2016)

Thank you very much for all your feedback so far. I am reading each post with great interest. BTW, I'm no longer in the accumulation phase. (I work part-time doing freelance work, but not enough hours to cover my total yearly spend.) As for the Canadian stock holdings, I will only be spending the dividends that get generated; hence my comment about wanting high dividend stocks, but I realize that total returns is what counts overall.


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## Eder (Feb 16, 2011)

I think add Fortis & Canadian National Railway and remove SLF & Power. Thank me in 5 years haha.


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## AltaRed (Jun 8, 2009)

Eder said:


> I think add Fortis & Canadian National Railway and remove SLF & Power. Thank me in 5 years haha.


I wouldn't eliminate insurers. Having at least one insurer is a hedge against rising interest rates, a better hedge than the banks themselves. And interest rates are rising, if only slowly. Continuing to hold SLF and PWF seems fine to me (my picks/holdings are IAG, PWF and MFC, but I don't think it makes much difference)

I do agree with adding at least one industrial, perhaps two of them, and maybe one or two electrical utilities, at least one of them in the renewable space. But no more pipelines or banks... There is enough there already.


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## Eder (Feb 16, 2011)

The thing is all the big banks are also insurance companies (as well as real estate companies).


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## dubmac (Jan 9, 2011)

I have many of these stocks.
I will suggest 2 things.
1. I agree that FTS is good solid keeper. 
2. Suggest that you look up Rob Carrick's 2 min portfolio sometime. He takes the top two (cap) holdings in each of 10 sectors of the economy. I can't recall all the details, but seem to recall that TRI-T, L-T, CSH.UN-T, OTC-T are among some examples that he has often included for diversification.


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## humble_pie (Jun 7, 2009)

dubmac said:


> Suggest that you look up Rob Carrick's 2 min portfolio sometime. He takes the top two (cap) holdings in each of 10 sectors of the economy. I can't recall all the details, but seem to recall that TRI-T, L-T, CSH.UN-T, OTC-T are among some examples that he has often included for diversification.




even easier is jas4 beach's 6-pack of large cap canadian stocks. Jas4 took the top weighted stocks from the XIU universe of canada's 60 biggest stocks by market cap; he backtested; he found that this shorter selected list outperformed the main XIU index.

what i like about holding 6 or 8 or 10 stocks is that there's no ETF hankypanky going on. No representational sampling. No lending out of securities. No futures contracts, options, treasury swaps or other derivatives. Just pure shade-grown Jo.

.


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## ontario99 (Apr 13, 2016)

humble_pie said:


> even easier is jas4 beach's 6-pack of large cap canadian stocks. Jas4 took the top weighted stocks from the XIU universe of canada's 60 biggest stocks by market cap; he backtested; he found that this shorter selected list outperformed the main XIU index.
> 
> .


Sorry, but who/what is jas4 beach??


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## james4beach (Nov 15, 2012)

ontario99 -- humble_pie is referring to me and to this thread
http://canadianmoneyforum.com/showthread.php/118842-quot-5-Pack-Approach-quot

I'm currently leaning towards the 10 stock approach (RY, TD, ENB, SU, CNR, CP, BCE, T, FTS, EMA). This gives you a portfolio similar to the Canadian index, but you hold the stocks directly.

If you're working with a smaller portfolio, then it's enough to just hold five stocks (RY, ENB, CNR, BCE, FTS).


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## ontario99 (Apr 13, 2016)

james4beach said:


> ontario99 -- humble_pie is referring to me and to this thread
> http://canadianmoneyforum.com/showthread.php/118842-quot-5-Pack-Approach-quot
> 
> I'm currently leaning towards the 10 stock approach (RY, TD, ENB, SU, CNR, CP, BCE, T, FTS, EMA). This gives you a portfolio similar to the Canadian index, but you hold the stocks directly.
> ...


Thank you. (Mystery solved!) I will check out the thread and your list too. I am definitely adding FTS, but I may add more, so thanks!


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## james4beach (Nov 15, 2012)

Also take a look at Argonaut's approach:

http://canadianmoneyforum.com/showt...s-5-pack-for-TFSAs-amp-other-starter-accounts


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## Oldroe (Sep 18, 2009)

So my bank study.

Buy 10k of each bank as of yesterday.

BMO 99.17 100.8369 $3.60 $363.01

CM 114.65 87.2219 $4.14 $361.99

Ry 101.35 98.6679 $2.90 $286.14

I did this for somebody that just wants income "me" TD and BNS you can do if interested.


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## ontario99 (Apr 13, 2016)

Some of you mentioned utility stocks like FTS and EMA, but ther prices are going down and down and I've been told it's because interest rates are going up. I got the money lined up now, but I guess I should wait to buy these for a few years until the interest rates settle down? I am still tempted to buy FTS because of the high dividends, and I have no plan to sell them for awhile, but why buy stocks you know will go down in value, right? Any thoughts?


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## like_to_retire (Oct 9, 2016)

ontario99 said:


> Some of you mentioned utility stocks like FTS and EMA, but ther prices are going down and down and I've been told it's because interest rates are going up. I got the money lined up now, but I guess I should wait to buy these for a few years until the interest rates settle down? I am still tempted to buy FTS because of the high dividends, and I have no plan to sell them for awhile, but why buy stocks you know will go down in value, right? Any thoughts?


Why not buy stocks that benefit from rising interest rates, such as banks, insurance companies and consumer discretionary?

ltr


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## Eder (Feb 16, 2011)

Why not buy the best Canadian companies when they are on sale? The herd generally only buy high, stunting their returns for years. (oh,you don't know whether they go up or down in value)


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## like_to_retire (Oct 9, 2016)

Eder said:


> Why not buy the best Canadian companies when they are on sale? The herd generally only buy high, stunting their returns for years. (oh,you don't know whether they go up or down in value)


Yeah, for sure, that's what I've tried to do. Set up a portfolio that results in equal weighting across sectors and try and buy when they're on sale.

ltr


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## lonewolf :) (Sep 13, 2016)

Ontario I dont know why you cant invest in ETFs though if your able to buy the dia the etf that tracks the DJI thats what I would go with. Bonds world wide are in a huge bubble when interest rates rise international money might be looking for a home the DJI. When international money was buying the DJI in the late 1920s the market went vertical then crashed & burned. Have some resistance around 28,000 then pretty clear sailing till 36,000 though I m playing it safely little money on the table long OTM calls


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## ontario99 (Apr 13, 2016)

For people who haven't been following this thread from the beginning, I already have tons of bank stocks (more than any other sectors). I'm a US citizen living in Canada, and I am trying to move some money here to invest in the Canadian market to try to deversify into different sectors. Because I am a US citizenliving in Canada, for tax reasons, I cannot buy Canadian ETF's or mutual funds in my non-registered accounts (I don't have registered accounts here because I don't work.). I am missing utility company stocks, but maybe this is not a good time. I already have energy, financial, and telecom. Another thing to add is consumer staples like CNR but it looks like it's peaking a bit already. I want to keep the stocks I buy at least for a few years though...


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## like_to_retire (Oct 9, 2016)

ontario99 said:


> I already have energy, financial, and telecom. Another thing to add is consumer staples like CNR but it looks like it's peaking a bit already. I want to keep the stocks I buy at least for a few years though...


CNR:TSX is a member of the Industrial sector. An example of a Consumer Staple would be MRU:TSX or SAP:TSX.

ltr


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## leeder (Jan 28, 2012)

lonewolf :) said:


> Ontario I dont know why you cant invest in ETFs though if your able to buy the dia the etf that tracks the DJI thats what I would go with.


This article from the Globe and Mail (https://www.theglobeandmail.com/glo...-beware-these-five-tax-traps/article37658751/) probably explains why the OP is not buying ETFs or mutual funds.

In terms of individual stocks, other members have given a few names, like FTS or CNR. Here are couple other names outside of the Financials space, which you seem to have a lot: CP Rail (CP), Canadian Tire (CTC.A), Canadian Natural Resources (CNQ), Nutrien (NTR)

Please perform your own research and due diligence before buying.


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