Friday, August 21, 2009

doubled Husky holding

Today I doubled my position in Canadian oil firm, Husky Energy (HSE), just in time for the hurricane season.

The reasons I added to Husky here are many:
  • The dividend was recently cut, sitting now at a conservative $1.20 per share on 2009 estimated trough earnings per share of $1.80
  • Given the growth in China and emerging economies, I like the outlook for oil post banking crisis
  • Husky has very little debt and a great balance sheet
  • Given the company's ties with China, capital position, smaller size, and aggressive management, a takeover may not be out of the question
  • As mentioned previously, if I'm investing in a commodity that fluctuates wildly, I like to get paid regularly, instead of trading in and out; Husky provides this
  • If earnings snap back even close to 2006-2008 levels, Husky should be quick to prop the dividend back up
  • I also considered an investment in Crescent Point Energy (CPG), however I think Husky offers a better valuation at these levels

Tuesday, August 18, 2009

SYSCO & P&G still look good

With the run up the market has had since the March lows, it has become difficult to find stocks with attractive valuations. Many of the more cyclical stocks, as well as financials have really run up and I'm not sure that future earnings will justify the current prices in some cases.

Luckily there are still a few good buys out there. For dividend growth investors, it's a nice bonus when a company is still raising it's dividend through thick and thin. These two firms have solid balance sheets and fit that bill. They have stable product offerings and they've navigated through tough times before. Their dividends are growing and very secure. I've added to my positions in both companies over the past 6 months, and I am considering doing so again at these valuations.

Food distributor SYSCO (SYY) is yielding 4%, and trading at a P/E of 13.6x.

Consumer products giant, Procter & Gamble (PG) is yielding 3.4%, and trading at a P/E of 14.7x.

There are headwinds afoot for both of these firms, but I believe that as long term investments they may be ripe for the picking right now. I may put my money where my mouth is in the near future. For my further thoughts see the posts below.

Added More P&G

Took a Helping of Sysco

Thursday, August 6, 2009

crisis takes it's toll on Manulife's dividend

The credit crisis has taken it's toll on the dividend of Canadian-based insurance giant Manulife Financial (MFC). Manulife's decision to cut its dividend by 50% to $0.13/share is part of an effort to build a strong capital position for what is sounds like are future acquisitions.

The CEO made the following statement today:
While we recognize the importance of the cash dividend to many of our common shareholders, we believe that retaining more of our earnings is the most effective means of building capital, while still providing an attractive yield for our shareholders who will benefit as we deploy our capital for growth. We believe that companies that build fortress levels of capital will benefit their policyholders and shareholders and be recognized favourably by regulators and ratings agencies."

This move was mildly expected, however I believe it will still come as a shock to many dividend investors, as Manulife has long been viewed as a stalwart on the Canadian and global financial scene.

Tuesday, August 4, 2009

Saputo pushes dividend up

Dairy producer Saputo (SAP) has increased it's quarterly dividend by a meagre 3.6% to 14.5 cents per share after reporting a flattish quarter on the earnings front.

Saputo shares are up 5% today and the stock now yields 2.3%. The pay out ratio on the actual quarter's EPS was 35%.

The company was hit by lower cheese prices in the US placing downward pressure on earnings and revenues, which were still up by 6.2%. This was the first quarter for inclusion of the acquired Neilson Dairy business which was the reason for the revenue increase.

This company is always strongly affected by cheese prices as well as US/CAD exchange. They seem to be focused on growth and I think the investment provides a nice mix between growth and stability; having a staple-type product.