Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
Why I’m buying more of this dividend-growing bank
The beauty of dividend growth investing is that, no matter what the stock market throws at investors, lots of solid, blue-chip companies continue to raise their dividends, John Heinzl writes. Now, what to do with the money that’s been piling up? After a mixed earnings season, shares of Canadian bank stocks have stumbled recently. I’ve decided to take advantage of the recent weakness by acquiring additional shares of Bank of Montreal. Even though BMO’s stock fell nearly 5 per cent in the three days after its second-quarter earnings release, the results were hardly a disaster. And the fact that BMO also raised its dividend is yet another reason to like the stock.
More from John Heinzl: More of your RRSP and RRIF questions answered
With decades of dividend growth behind them, these stocks crush inflation
An investor’s best hedge against inflation is a dividend growth stock. Over the past decade, a lot of Canadian companies have lost their dividend growth mojo. But for help identifying some stocks, Rob Carrick consults a website called Canadian Dividend Growth Investing & Retirement. On its all-star list, you’ll find stocks with 10-plus years of dividend hikes and some stocks are miles ahead of inflation.
The all-star list is topped by Canadian Utilities Ltd. and Fortis Inc., with an incredible 47 and 45 straight years of dividend increases, respectively, through the end of 2018.
More from Rob Carrick: As rising living costs go, families with children are inflation roadkill
After gaining an influential and financially powerful strategic partner, this company’s stock is set to rise again
When the Canada Pension Plan Investment Board invests $200-million in your company, you know you must be doing something right, Gordon Pape writes. That’s what happened with Premium Brands Holdings Corp. last month. The big breakthrough for the Vancouver-based company came when the Premium Brands won a contract to provide breakfast sandwiches to Starbucks. That experiment turned out to be immensely popular, and the company is now reported to be ready to sign a similar deal with Walmart. Among its other customers are Boston Pizza and The Keg. The CPPIB deal gives Premium Brands an influential and financially powerful long-term strategic partner. It also strengthens the company’s financial position.
More from Gordon Pape: Nervous about the markets? These low-volatility funds are worth considering
With a recession inevitable, now is the time for every investor to hold on to their hat
One thing we know about this recent surge in equity markets is that it has little do with anything real or fundamental, David Rosenberg writes. The world economy is soft and getting softer. Perhaps the most important data point this week, with due deference to the jobs report, was the number of times the U.S. Fed Beige Book used the word “uncertain” to describe the outlook – the most in six years. And in uncertain times, the private sector tends to boost its savings rates at the expense of spending growth, and those savings in turn gravitate to safe havens – one reason why bonds and gold have reasserted their traditional roles in uncertain times. Keep in mind that we are coming off the worst May for the S&P 500 since 2010 – this was, in fact, the second worst May since 1962!
The time is right for beaten-up Canadian forestry stocks
Are Canadian forestry stocks set for a rebound? Some brave investors are betting that the worst is over, given tentative rallies earlier this week by West Fraser Timber, Interfor and Canfor, among others, David Berman writes. Nimble investors can point to several upbeat signs for the beaten-up sector, including tumbling borrowing costs that could stimulate U.S. home construction. Shares have also been pummelled over the past 12 months, making the downside risks look relatively slight. But perhaps the best thing going for forestry stocks: The potential returns are huge if investors get the timing right for this notoriously cyclical sector.
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What investors need to know for the week ahead
Coming up this week, China reports trade surplus numbers for May, Japan reports its first-quarter GDP and Canada reports May housing starts on Monday. On Wednesday, the U.S. reports its May budget deficit. On Friday, Canada reports April new motor vehicle sales and the U.S. reports May retail sales and consumer sentiment.
Companies reporting earnings this week include David’s Tea, Equitable Financial and Wall Financial (Monday), H&R Block and Helix BioParma (Tuesday), Lululemon and Roots (Wednesday), Dollarama and Transat AT Inc. (Thursday) and TAG Oil (Friday).