4 Solid Canadian Dividend Stocks

Reposted from Seeking Alpha
By Brian Langis

I have provided an overview of 4 non-banking Canadian dividend stocks. They also trade on a U.S. exchange. Full the full article click on the link here: 4 Solid Canadian Dividend Stocks

My portfolio is structured in 3 segments:

  1. Cash and liquidities, short-term investments, bonds, guarantee certificates.
    • The purpose of this segment is to have an emergency fund, savings, and to take advantage of potential opportunities.
    • The drawback is having zero returns or negative growth after inflation and taxes.

2.  Income Portion

    • As the name indicates, this segment is built around a stable recurrent growing dividends payout. The goal is to build permanent growing passive income. A large portion of the investments are in Canadian companies because that’s my daily currency.
    • I have an infinite time horizon. It’s a classic buy and hold.
    • The downside is that dividend investing is boring and slow. Also, I’m mostly limited to Canada. However, many Canadian companies are trading in the U.S. like the ones mentioned below.
    • The mindset you need when investing for income is similar to watching a tree grow. You can’t look at it every day. You do need to take care of it but you can’t take it out of the ground to check on the roots all the time.

3.Growth Portion

    • This is my favorite section but it also requires more work. The objective is to achieve long term capital appreciation and returns superior to its benchmark. I focus on buying businesses that I believe are trading under their long term intrinsic value. Intrinsic value is measured by taking all the future cash flows into and out of the business and discounted at the proper rate. This is the section where money goes to work to achieve long-term capital growth. There’s no limitation on the opportunities. Some of my investments are domestic and foreign.
    • The time horizon of this segment is long-term but not infinite. If the price exceeds value or the fundamentals are deteriorating, I would consider exiting.

The article will focus on the income segment of the portfolio. It’s time to feed the dividend machine. My goal is to allocate capital based on securing a reliable growing income. My next investment needs to be a dividend paying Canadian company because it’s my everyday currency. This segment generates liquidity that allows me to take advantage of opportunities. The reallocation of that cash is based on opportunity. My liquidity is replenished by the cash of my dividend generating companies. Today I’m focusing on growing my income section because I have a goal of maintaining a growing minimum of dividend income. Good old dividend paying companies are pretty much uneventful and boring until you get that dividend cheque and then you are hooked! Then you want these dividend cheques to keep growing. A good dividend company is a gift that keeps on giving.

My model enables me to possess a long-term horizon combined with a flexible opportunity framework. Right now I’m searching for a solid company that will distribute growing dividends over a very long time. Its dividend also needs to weather a storm. I need to approach this with the mindset that I can’t lose the money and that I depend on the income. I need to build this dividend machine as if I would own them forever. I also don’t mind paying a little more if it means that I have a higher quality business. The premium that I pay today is going to pay off over the long-run. The long-term focus also helps me eliminate the everyday market noise.

My window of solid dividend paying opportunities also shrinks because I’m eliminating Canadian banks off the radar. I already have my dose of capital allocated to banks. Also, there’s plenty of coverage and articles dedicated to Canadian dividend paying banks.

Finally, I have selected four large companies that have plenty of coverage. Below is a snapshot of the four companies that are candidates for my next dividend investment. Most of you are probably familiar with the names proposed. Further analysis valuation is required.

TransCanada (TRP)
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TransCanada is more than just pipelines. It has a lot of diversified operations. They are involved in power generation through natural gas, nuclear, coal, hydro and wind generation. TransCanada owns, controls or is developing more than 10,800 megawatts of power generation and also stores natural gas. The company is also involved in electricity trading and marketing. Keystone XL or not, this company is plowing through with plenty of growth projects.

TransCanada’s diversified business model offers a reasonable dividend yield. The regulated pipeline business tends to be stable and there are significant barriers to entry. Potential catalysts are improving natural gas prices, the realizations of several on-going projects, and approval of the Keystone XL. Uncertainties surrounding the approval of the Keystone XL are already baked in the stock price. TransCanada also proposed a natural gas pipeline to the B.C. coast, and a decision is pending on the project. Another risk to TransCanada and to the industry are pipeline leaks and mounting opposition from environmental groups.

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Source: TransCanada Investor Relation. Nice chart.

Above is a chart of the last ten financial years. Over ten years, income and revenues have grown but have been flat the last five years. Actual cash flow would need to be analyzed to give a proper picture of the company since earnings are probably distorted. TransCanada has several on-going projects in the pipeline that should fuel further growth.

For the full article and the rest of the picks you must click here (Redirected to Seeking Alpha)

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The Other Ongoing Bridge Scandal

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Photo Credits: Sunday Funnies at The Burning Platform blog

Book Review: An Astronaut’s Guide to Life on Earth By Chris Hadfield

I just finished Chris Hadfield’s book, An Astronaut’s guide to life on Earth. It’s a good interesting book but don’t expect a space drama page turner. It’s not that kind of book. The content is part biography, part self-help and part amusing.

Chris hit stardom when he was the Commander of the International Space Station. The Space Station is the biggest project in space the humans have yet and we barely heard any noises about it. That’s until Chris became Commander and started teaching us about space in cool ways. I was always fascinated with space but the topic has lost its lust over time. Most space news ends up in the back pages of the newspaper. After landing on the moon, I guess we are all waiting for the next big thing.

Chris takes us on a ride on how he managed to accomplish his childhood dream. From a very early age he wanted to become as astronaut. I think every kid dreams at one point of becoming an astronaut but for most of us that dream is squashed at the sight of the first math book. The reality is that the odds of becoming an astronaut a close to zero. That zero is even bigger when you are a Canadian (Canada funds about 2% of the International Space Station, the more funding the more chance of sending guys to space). The key to Chris’ success what being committed to “thinking like an astronaut” from a very early age. He took massive action towards achieving that goal. He has a map and he followed it. Yes he knew the odds were non-existent but he never gave up.

The one element of the book that I differ with is his notion of “the power of negative thinking”. On the surface it sounds like Chris is preaching for bad things to happen to him. Of course that’s not what he wished for once you get through it you realized it’s more a mislabel. It shouldn’t be call the power of negative thinking. It should be call having insurance or having a plan. The idea behind his philosophy is to prepared and to be ready when problems shows up. Astronauts need to be prepared for any potential problems and a lot of them are life threatening. As Commander, you are responsible for a lot of life and billions of dollars in equipment funded by the tax payers. You don’t want a shuttle to return on Earth for some banal reason. You need to be ready. Basically, the proper label for his philosophy is “wish for the best, prepare for the worst”. This applies on Earth too. From mundane task such as making sure your car has a gas left in the gasoline to making important decisions. Think of it of making sure you have insurance, you don’t wish a meteorite hits your house but you are covered.

I think what resonated with me the most was his advice to enjoy the little things. The key to happiness is not to celebrate the big events such as accomplishing a multi-year goal, but to enjoy the process of getting there. The key is to enjoy the challenge, hit the problems with a smile, tried to get the most out of it. This applies to something as boring as doing dishes. Approach cleaning these dishes with the attitude that you are the best dish washer in the world. It’s makes the experience more enjoyable. Another part that resonates with me is that Chris is not a self-help guru but a guy that has life experience to share with you. You truly sense the feeling that he’s trying to help you.

Here of some of Chris’s best contributions that help us regained interest in space:

The first space video, 20 million views and counting:

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RE: I Bet On Tesla Because Most Investors Don’t Understand Electric Cars

Tesla-logo
Reposted from Seeking Alpha
By Brian Langis

This is a response to an article written by Chris Umiastowski, a 10-year veteran of the sell-side equity research, tech investing expert, and special contributor to the Globe and Mail. Here is the link to the article: I bet on Tesla because most investors don’t understand electric cars. Please note that it’s the Globe and Mail that titled his article. It’s surely controversial. I suggest you read his articles first to have a better understanding of his though process and my response. Chris tends to focus on longer-term trends rather than short-term trading opportunities. I know Tesla is a very popular stock on Seeking Alpha with many smart bulls and bears. I’m sharing this with the purpose to better inform potential investors and exchanging. Enjoy!

Dear Mr. Umiastowski,

Your article published on January the 6th state that the main reason for “betting” on Tesla (TSLA) is because most investors don’t understand electric cars. You also provided insights about the future of the electric car industry to justify your analysis. I respectfully disagree with your thesis and I believe its sending the wrong message to potential investors. The main reason investors are staying away from Tesla is valuation based, not because they don’t understand electric cars. Most people don’t even understand how a gasoline car works but as long as the car gets them from point A to point B that’s sufficient. I could write a similar article titled “Invest in GM because most investors don’t understand a piston-timing system”. Comedy aside, understanding electric cars is not the reason people invest or don’t invest in Tesla. The point of the article is to address the risks associated with Tesla and to educate the reader.

For the full article you are redirected to Seeking Alpha.

Laos’ Third IPO Ever Was Pretty Quiet

A somewhat significant event in a quiet place was pretty quiet. Laos had its third ever IPO. It’s been a while since the Laos Securities Exchange (LSX) had an IPO. Lao World because public on December 24th. Bloomberg didn’t even picked it up. The other stocks on the LSX are Banque Pour Le Commerce Exterieur Lao (BCEL) and Electricité du Laos Public Company (EDL-Gen). I suspect that the reason why this opportunity was under radar is because it’s not that great. People on the ground told me that their locations are mediocre and the competition is better. Before getting in these markets do your homework and due diligence. Such market has liquidity and trading is rare. I would suggest that you do your research.

Background information provided by KT-ZMICO
Lao World is Laos’ leading operator of exhibition halls, with operations in Vientiane (Lao ITECC), Champasak (Pakse) and Savannakhet (Lao World Savan) provinces. The company generates 34% of its revenue from events at its halls, and the remainder from consumer businesses that are mainly operated out of these halls, including supermarkets, cinemas and bowling.

Two new locations to drive surge in growth
Lao World will open two new venues next year; 1) Savan ITECC in Savannakhet in early 2014 and 2) Vientiane ITECC Market near the end of 2014. Management forecasts that these new locations will boost revenue over 300% in 2014E, and a further32% in 2015E. The company also targets an EBIT margin improvement from 23% in 2012 to 35% by 2015E, driving EPS growth of 300% in 2014E and 32% in 2015E.

Market capitalization of US$50mn at offering price
Lao World will offer 3,956,100 new shares to the public in its initial public offering (IPO) at LAK10,200/share, raising LAK40,352mn (80% of which will go to financing the two new locations). The offering will bring the total number of shares to 35,604,809, for a market capitalization at the listing price of LAK403bn (US$50.5mn). Under management forecasts, between the new equity, new debt this year of LAK46bn, and internal cash of LAK171bn over 2014E-2015E the company will have more than sufficient funding for a planned LAK126bn in capex.

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New Year, New Design

Yes you are at the right page. It’s same blog, same content, same author, not the same template.

I think the blog is about 1.5 years old and I was still using the default template. I didn’t mind the default template, or I actually didn’t care. It got the job done. My little brother, Hugh Langis, is smart and get paid making websites told me it sucks. So I hop for another free template. I didn’t something that was too hip, too cool, too formal, or too professional. I just wanted an easy, simple, no firework template. I hope this does the trick.

Thanks for visiting.

Brian

USA Olympics Hockey Jersey Beer Cans

Great marketing and a great idea by former Canadian brewer Labatt. I believe the first picture was disclosed on CBS Sports. I’m not American and Labatt Blue is terrible beer, but because the cans are so cool I would buy this 6 pack and drink it. The cans are decorated with former US hockey jerseys. It brings out Olympic spirit. I certainly hope Labatt comes out with a Canadian edition. However I’m not sure how Labatt “Blue” would handle having “Red” cans. Molson Canadian would be the perfect brand to model their cans to former hockey jerseys but they might run into legal problems with Labatt. Therefore I’m not too sure we will a Canadian edition. Too bad because they are so sweet looking.

Beer and hockey are like best friends. (So does beer and many sports, beer has a lot of best friends.)

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Photo Credit: CBS Sports and Labatt

This 2nd set of pics is provided by MyBeerBuzz.com and TheNoseBleeds.com
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