Category

Number Cruncher

These 10 TSX dividend stocks offer profitability and attractive valuations

WHAT ARE WE LOOKING FOR?

Profitable companies that have a sensible price.

Return on capital and price-to-book tend to evolve in the same direction. As profitability rises, the price-to-book ratio is likely to increase to compensate for higher profitability. But what if we established lower and upper limits – such as a floor for profitability and a ceiling for valuation? Today, we’ll use such floor and ceiling limits to help us discover mispriced stocks.

THE SCREEN

We screened Canadian stocks focusing on the following criteria:

  • Market capitalization higher than $2-billion;
  • Return on capital higher than 10 per cent (we want a profitable company – this is our profitability floor);
  • Price-to-book lower than 2.5 (we want a company with moderate valuation based on shareholder’s equity – this is our valuation ceiling);
  • Positive three-month price growth (that is, a company with a positive trend in its share price);
  • Positive two-year sales growth (we want a growing company);
  • Positive one-year growth in current operating value (COV) – we want a company with improving fundamentals. We use discounted cash flow to derive the COV. The difference between the COV and a traditional DCF is that we assume the company will generate the same cash flow forever. In other words, we do not incorporate any growth component into the calculation. It is a way to evaluate the minimum value of a business; the parameters are determined automatically by our platform.

For informational purposes, we have also included price-to-earnings, three-year annualized growth in earnings per share, dividend yield and one-year price return. Please note that some ratios may be shown as of end of previous quarter.

MORE ABOUT INOVESTOR

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios, and easily communicate investment decisions with clients through client-friendly reports.

WHAT WE FOUND

Floor-and-ceiling strategy opens door to mispriced stocks

Ticker Name Price MKT. CAP ($MIL) ROC (%) P/B 3M PRICE RTN. (%) 2Y SALES GRTH. (%) 1Y COV GRTH. (%) P/E 3Y ANN. EPS GRTH. (%) 1Y PRICE RTN. (%) DIV. YIELD (%)
POW-T Power Corporation Of Canada 41.89 28340 18.2 1.3 7.2 53.2 31.0 10.6 22.4 56.2 4.3
EQB-T Equitable Group Inc. 144 2443 18.1 1.4 6.0 12.9 31.3 8.7 15.5 87.7 1.0
KL-T Kirkland Lake Gold Ltd. 51.8 13819 16.0 2.0 7.6 125.7 12.1 13.1 18.7 -19.8 1.8
GWO-T Great-west Lifeco Inc. 38.64 35921 15.8 1.6 9.2 56.7 18.2 11.1 10.6 45.2 4.5
SMU-UN-T Summit Industrial Income Rei 20.83 3506 15.5 1.4 30.0 74.5 50.7 3.9 109.7 63.4 2.7
ARX-T Arc Resources Ltd. 11.97 8665 14.7 1.5 14.0 80.8 44.4 47.9 -11.0 105.7 2.2
SLF-T Sun Life Financial Inc. 65.06 38099 13.7 1.7 2.1 21.4 10.9 11.5 13.0 18.6 3.4
IAG-T Ia Financial Corporation Inc 72.05 7743 13.3 1.2 6.2 34.3 8.1 9.8 7.5 55.1 2.7
TOU-T Tourmaline Oil Corp. 43.77 13063 11.5 1.4 22.9 83.8 35.0 9.6 36.3 172.0 1.6
WCP-T Whitecap Resources Inc. 7.06 4457 10.6 2.0 12.8 16.2 50.0 7.8 66.3 204.3 2.8

Source: Inovestor

Financial conglomerate Power Corp. of Canada has the highest three-year annual EPS growth on our list, at 22.4 per cent. (One of the public companies in which it owns a majority stake, Great-West Lifeco Inc., also made the screen). The jump of 31 per cent in Power Corp.’s current operation value is possibly related to the revised valuation of Wealthsimple Inc., one of its private investments, which surged from $1.4-billion to $5-billion between October, 2020, and May, 2021. Wealthsimple is well known for its robo-adviser and low-fee brokerage accounts.

Summit Industrial Income REIT has seen the largest three-month price increase (30 per cent) and three-year EPS growth (109.7 per cent) of our screen. Real estate investment trusts register fair value adjustments to reflect the increased value of their properties. For Summit, year to date, these adjustments already amounted to $693-million, which helps explain the jump in its unit price over the past three months. This year is exceptional, but Summit has shown constancy in reporting this kind of adjustment, with an average of $150-million a year in such adjustments in the past three fiscal years.

Natural gas producer Tourmaline Oil Corp. has achieved impressive two-year sales growth (83.8 per cent) and three-year annualized EPS growth (36.3 per cent) despite a challenging environment. Pension fund giant Caisse de dépôt et placement du Quebec said last week it will exit oil company investments next year, but will remain invested in companies involved in infrastructure such as pipelines and in natural gas activities. If oil becomes the next coal, so to speak, in the eyes of pension funds and other institutional investors, it could have an impact on oil producer share prices in the short-term. In this situation, natural gas companies could be an interesting alternative.

Although we did not filter stocks based on P/E and dividend yield, we note the median P/E of our list is 10.2, the median dividend yield is a respectable 2.7 per cent (not shown), and every stock pays a dividend.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard, CFA, is vice-president of data management at Inovestor.

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Eight U.S. defensive dividend stocks for a frothy market

WHAT ARE WE LOOKING FOR?

Dividend-paying U.S.-listed stocks with lower risk.

The S&P 500 is up 19.5 per cent over the past six months and its price-to-earnings ratio now stands at 35.4, higher than the 1999 dot-com peak of about 33. Given the current valuation, investors may prefer to reduce their exposure to the U.S. market and/or select stocks that are fundamentally supported by a dividend.

THE SCREEN (you can add it to your screener section here)

We screened U.S. stocks focusing on the following criteria:

  • Market capitalization higher than US$2-billion;
  • Beta of 0.8 or less. A beta lower than one implies that the stock price should increase less during rising markets and should decline less in a falling market;
  • Three-year annual dividend growth higher than 5 per cent;
  • Five-year annual earnings per share growth higher than 7 per cent – we want the dividend growth to be backed by earnings per share growth;
  • Dividend yield higher than 2 per cent – we’re looking for companies with a larger yield than that of the S&P 500, which is currently 1.3 per cent;
  • StockPointer (SP) Risk Score lower than 40 – The risk score is scaled from zero to 100 where 100 is a high-risk company. 40 is considered low-to-medium risk. The score uses many criteria such as valuation risk perceived by our software, leverage and stability of profitability.

For informational purposes, we have also included P/E, five-year annual return of capital, and one-year price return. Please note that some ratios may be shown as of end of previous quarter.

MORE ABOUT INOVESTOR

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios, and easily communicate investment decisions with clients through client-friendly reports. StockPointer is a decision-making tool covering Canadian and U.S. securities developed for retail investors and investment advisers. In addition, Inovestor allows users to create personalized filters, build custom portfolios and carry out in-depth analysis on more than 13,000 companies (Canadian and U.S. stocks and American depositary receipts).

TICKER NAME PRICE MKT. CAP ($MIL) BETA 5Y ROC (%) SP RISK SCORE DIV. YIELD (%) 5Y EPS GRTH. (%) 3Y DIV. GRTH. (%) P/E 1Y PRICE RTN. (%)
PFE-N Pfizer Inc. 46.84 262257 0.77 13.5 23.0 3.3 15.2 5.0 20.2 37.6
WSO-N Watsco, Inc. 289.13 11200 0.75 15.9 34.6 2.7 13.0 11.3 32.2 25.1
PEP-Q Pepsico, Inc. 157.09 217098 0.80 11.9 36.0 2.7 10.7 7.4 26.4 8.9
ERIE-Q Erie Indemnity Company Class 180.87 8423 0.03 23.6 26.5 2.3 9.9 7.2 34.7 -14.3
CVBF-Q Cvb Financial Corp. 19.94 2710 0.73 10.3 24.8 3.6 9.8 8.7 12.7 13.0
PG-N Procter & Gamble Company 144.05 349998 0.59 12.3 31.5 2.4 9.3 5.2 25.3 6.0
TSN-N Tyson Foods, Inc. Class A 78.23 27993 0.75 12.0 19.9 2.3 8.7 14.0 12.1 27.1
PKG-N Packaging Corporation Of Ame 152.45 14480 0.73 13.3 31.0 2.6 7.3 12.2 22.8 46.4

WHAT WE FOUND

Pharmaceutical giant Pfizer Inc. has the highest five-year EPS growth on the list at 15.2 per cent, and second-lowest risk score, at 22.8. Its COVID-19 vaccine revenues, which everyone had thought would be non-recurring, are increasingly likely to continue, at least in the medium term. A growing body of research is suggesting a third injection may give additional protection against the virus for certain vulnerable populations, such as those in long-term care.

Watsco Inc., which distributes heating, air conditioning and refrigeration equipment, has the second-highest earnings growth (13 per cent) and return on capital (15.9 per cent) on our list. As a distributor, the company needs relatively little capital to operate, leaving space to pay dividends. In the long term, the company could benefit from more recurrent extreme temperatures, such as we saw in Western Canada this summer.

Food and beverage company PepsiCo Inc. has a solid income stream from its various consumables such as Pepsi, Lay’s, Doritos, Quaker Oats, Aquafina and Gatorade, to name a few. PepsiCo has repetitive sales, reputable brands and respectable earnings and sales growth – key characteristics that we look for in a defensive company.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

 

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free: inovestor.com/en-CA/store/

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Nine Canadian stocks to play the consumer savings boom

These nine Canadian stocks are poised to absorb excess consumer savings.

WHAT ARE WE LOOKING FOR?

Canadian equities that generate plenty of free cash flow.

Canadian consumers are now saving 13.1 per cent of their income, compared with a savings rate of 3.6 per cent at the beginning of 2020. After jumping early in the COVID-19 pandemic, the savings rate began to decline last year, but it is still significantly higher than before the outbreak. The consumer discretionary sector is well positioned to receive this spare cash.

THE SCREEN

We screened Canadian stocks in the sector focusing on the following criteria:

  • Market capitalization greater than $500-million;
  • Free-cash-flow-to-capital ratio higher than 10 per cent. We want a company that generates a large amount of free cash flow as a percentage of capital. A high ratio shows the company has plenty of cash to invest or distribute to shareholders;
  • Economic performance index (EPI) change higher than 0.10. The EPI is the return on capital divided by the cost of capital. A positive change in this value shows an improvement in the company’s risk-return profile;
  • A StockPointer (SP) risk score lower than 35. Developed by Inovestor, the SP risk score is scaled from 0 to 100, where 100 is a high-risk company and 35 is considered low to medium risk. The score uses many criteria such as valuation risk perceived by our software, leverage and stability of company profits.

For informational purposes, we have also included the EPI, P/E ratio, price-to-book ratio, one-year price return and dividend yield. Please note that some ratios may be reported as of end of the previous quarter.

WHAT WE FOUND

TICKER NAME PRICE MKT. CAP ($MIL) FCF / CAPITAL (%) EPI CH. 3M SP RISK SCORE EPI P/E P/B 1Y PRICE RTN. (%) DIV. YIELD (%)
TOY-T Spin Master Corp 46.44 4751 26.0 0.20 32.1 1.18 30.8 4.2 65.9
WJX-T Wajax Corporation 25.3 545 25.0 0.11 32.8 0.75 13.1 1.5 133.0 3.95
LNR-T Linamar Corporation 72.35 4735 19.7 0.23 21.1 1.03 13.4 1.1 73.2 0.88
RUS-T Russel Metals Inc. 34.2 2144 18.8 0.74 32.1 1.81 10.3 2.1 82.4 4.44
RCH-T Richelieu Hardware Ltd 43.47 2435 17.7 0.37 29.6 2.52 21.6 4.1 29.1 0.64
ZZZ-T Sleep Country Canada Holding 33.04 1217 15.7 0.34 28.5 2.33 14.5 3.3 65.0 2.36
HDI-T Hardwoods Distribution Inc. 35.62 758 12.0 0.13 26.5 1.51 17.1 2.4 78.1 1.12
UNS-T Uni-select Inc. 17.35 735 11.3 0.28 31.0 0.54 14.0 1.2 143.7
CTC-A-T Canadian Tire Corporation 196.88 11972 11.0 0.32 23.7 1.60 13.1 2.5 55.6 2.39

Children’s entertainment company Spin Master Corp. has the highest free-cash-flow-to-capital ratio on our list, at 26 per cent. The company has a strong portfolio of brands ranging from good old Etch A Sketch, to the well-established Paw Patrol and DC Universe figurines.

Spin Master faced difficulties before the pandemic with its supply management in Asia, and COVID-19 exacerbated fears of a supply crunch. Fortunately, the company now seems to be moving in the right direction. Spin Master reported second-quarter earnings on Aug. 4 and raised its forecast for 2021 sales growth from the low teens to the mid-teens.

Automotive original equipment manufacturer Linamar Corp. has a risk score of 21.1, the lowest of our screen, which reflect a low valuation risk, also shown by its low price-to-book ratio of 1.1 and P/E of 13.4. The microchip shortage is having an impact on the auto sector and it is still uncertain when the shortage will end.

On the bright side, used car prices are up 22.6 per cent year to date according to the CarGurus price index, largely owing to strong demand. High used car prices stimulate new car sales and dealers’ inventories are low. This could lead to robust sales for Linamar as dealers need to replenish their inventories of new cars. Linamar is scheduled to report second-quarter earnings on Aug. 11.

Mattress retailer Sleep Country Canada Holdings Inc. reported solid second-quarter earnings on Aug. 3, and appreciative investors bid up the share price by 15.5 per cent the next day. The company has benefited from a pandemic shift in consumer spending. This second quarter demonstrated the shift does not appear to be over. The company plans to invest in software to enhance inventory management and in the customer experience to maintain its growth.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard is an investment analyst at Inovestor Asset Management. Inovestor for Advisors is a fundamental analysis research platform specializing in the economic value-added (EVA) approach.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

These 11 growing companies from the S&P 500 are becoming increasingly attractive

What are we looking for?

U.S. equities with improving valuations and fundamentals.

We look for a negative three-month price-to-earnings (P/E) ratio and a positive three-month current operating value (COV) change to discover stocks with an attractive signal. A divergence in these metrics implies paying less now for more value than just three months ago.

The screen

We screened Standard & Poor’s 500 stocks focusing on the following criteria:

· Three-month price-to-earnings (P/E) change lower than 5 per cent. We want a company with downtrending valuation;

· Positive three-month current operating value (COV) growth. We want a company with improving fundamentals. The COV is based on discounted cash flow with no growth. The parameters are determined automatically by our platform. It is an approach to evaluate the minimum value of a business;

· Three-month sales growth higher than 4 per cent. We want a growing company;

· Economic performance index (EPI) higher than 1.25. This is the return on capital divided by the cost of capital. A value higher than one demonstrates a company’s ability to create value for its shareholders.

For informational purposes, we have also included the P/E ratio, three-year median P/E ratio, one-year price return, market capitalization and dividend yield. Please note that some ratios may be reported as of end of the previous quarter.

 

More about Inovestor

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios and easily communicate investment decisions with clients through client-friendly reports. In addition, Inovestor allows users to create personalized filters, build custom portfolios and carry out in-depth analysis on more than 13,000 companies (Canadian and U.S. stocks and American depositary receipts).

TICKER NAME PRICE MKT. CAP ($MIL) P/E CH. 3M (%) COV GRTH (%) 3M SALES GRTH. (%) EPI P/E P/E (3Y MEDIAN) DIV. YIELD (%) 1Y PRICE RTN. (%)
NFLX-Q Netflix, Inc. 535.98 237645 -23.3 4.3 5.6 1.6 63.1 84.6 N/A 2.0
NKE-N Nike, Inc. Class B 161 254219 -17.7 8.9 15.8 2.6 44.2 46.3 0.7 66.9
ETSY-Q Etsy, Inc. 195.09 24549 -11.5 3.8 18.7 2.1 50.3 63.5 N/A 86.6
ABMD-Q Abiomed, Inc. 324.77 14703 -7.9 0.9 4.3 1.6 65.0 62.0 N/A 22.8
FDX-N Fedex Corporation 296.4 78647 -7.0 4.3 6.7 1.4 15.2 26.5 1.0 89.7
AMZN-Q Amazon.com, Inc. 3719.34 1874547 -6.9 5.6 8.6 2.4 69.4 77.8 N/A 19.8
ABT-N Abbott Laboratories 119.74 212756 -6.1 17.0 7.9 1.6 37.3 52.2 1.5 28.6
PKI-N Perkinelmer, Inc. 153.96 17254 -5.9 35.7 17.3 2.7 16.0 38.7 0.2 47.3
QCOM-Q Qualcomm Inc 141.43 159674 -5.7 6.1 10.2 2.2 19.9 25.7 1.9 54.9
CINF-Q Cincinnati Financial Corpora 118.87 19138 -5.3 94.8 30.9 2.6 6.2 13.8 2.1 69.6
CDNS-Q Cadence Design Systems, Inc. 138.5 38540 -5.2 2.6 4.4 1.5 58.0 43.2 N/A 39.8

What we found

The leading streaming service, Netflix Inc. had the largest P/E decline in the past three months while registering 4.3 per cent growth in its COV. Many players have joined the streaming party over the past few years: Amazon Prime, Disney+, HBO and many others. But Netflix still has the largest content library and continue to fuels it with aggressive investments by acquiring or developing new series and movies.

The company spent US$11.8-billion on its content last year alone despite COVID-19 disruption in the film industry. Since 2018, Netflix’s gross margin has increased by 1 per cent each year, meaning a dollar spent on content has produced more and more additional revenue. As the saying goes: Content is king.

The multinational sporting goods company Nike Inc. had a strong year as consumers rushed to buy sports equipment during the pandemic. In its most recent quarter, the company again beat analyst estimates with diluted earnings of 93 U.S. cents a share versus 51 U.S. cents expected.

Over time, Nike has allied itself with many professional athletes who have contributed to the brand’s recognition. This recognition by consumers can be seen in the EPI of 2.6. Customers are potentially willing to pay more for Nike’s products than competing ones, which creates value for its shareholders. The company’s robust short-term results forced our algorithm to readjust its assumptions resulting in a 8.9-per-cent increase in the COV in just there months.

Etsy Inc. and Amazon.com Inc. have similar profiles. Etsy connects buyers and sellers, and offers mostly handmade and vintage items on its platform, while Amazon follows the equivalent process, but with a much wider variety of products. Amazon also has a huge division offering cloud computing services.

Both companies have benefited from the shift in consumer habits toward e-commerce. Is their growth borrowed or has the pandemic accelerated the transition to online shopping?

Close to a year and half after the start of the pandemic, Etsy’s three-month sales growth of 18.5 per cent and Amazon’s 8.5 per cent expansion show no signs of going backward. But both companies are also selling below their historical P/E ratios: 50.3 today for Etsy, versus 63.5 historically, and 69.4 for Amazon, versus 77.8 in the past. The lower valuations may indicate the market is not convinced growth can continue at the rates seen in recent years.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free: inovestor.com/en-CA/store/

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Ten strongly profitable TSX stocks that investors may be overlooking

WHAT ARE WE LOOKING FOR?

Canadian stocks with strong profitability but whose unspectacular price movements may mean they’re not attracting much investor attention. We use the six-month price return to find stocks that may have been overlooked. A lack of buyers favours undervaluation.

THE SCREEN (access and save it on the Inovestor for Advisors platform)

We screened Canadian stocks focusing on the following criteria:

  • Market capitalization greater than $1-billion;
  • Return on capital (five-year mean) greater than 8 per cent – we’re looking for profitable companies;
  • Six-month price return between minus 5 per cent and 5 per cent – we want companies whose run-of-the-mill price movements are not attracting attention;
  • A price-to-earnings ratio that is less than 40 – we want a company that had a positive net income in the trailing 12-month period and we exclude companies with a stretched valuation.

For informational purposes, we have also included the one-month price return, one-year price return, five-year median price-to-earnings ratio, one-year earnings per share growth, annualized two-year EPS growth, and dividend yield. Please note that some ratios may be shown as of end of previous quarter.

MORE ABOUT INOVESTOR

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios and easily communicate investment decisions with clients through client-friendly reports. In addition, Inovestor allows users to create personalized filters, build custom portfolios and carry out in-depth analysis on more than 13,000 companies (Canadian and U.S. stocks and American depositary receipts). For more details about these stocks, subscribe to the Inovestor for Advisors platform for free: inovestor.com/en-CA/store/

TICKER NAME PRICE MKT. CAP ($MIL) ROC (5Y MEAN, %) 1Y EPS GRTH. (%) 2Y EPS GRTH. (ANN., %) 1M PRICE RTN. (%) 6M PRICE RTN. (%) 1Y PRICE RTN. (%) P/E P/E (5Y MEDIAN) DIV. YIELD (%)
SJ-T Stella-jones Inc. 46.15 3020 12.0 51.0 30.9 -10.1 4.3 25.6 13.0 19.6 1.6
ATD.B-T Alimentation Couche-tard Inc 45.32 48870 12.5 34.4 20.4 8.1 3.2 -0.9 15.4 18.2 0.8
SVM-T Silvercorp Metals Inc. 7.68 1120 9.7 29.6 -12.9 7.9 3.4 -4.1 24.2 13.9 0.4
MRU-T Metro Inc. 58.39 14340 13.0 14.5 14.6 0.4 -1.5 3.1 17.7 18.5 1.7
JWEL-T Jamieson Wellness, Inc. 34.34 1380 8.3 13.3 18.0 -9.9 -2.0 -4.2 35.6 32.2 1.5
DOL-T Dollarama Inc. 55.75 17040 28.3 1.1 3.6 4.8 4.2 19.6 29.4 26.8 0.4
KL-T Kirkland Lake Gold Ltd. 52.43 14000 17.1 -7.4 31.4 4.3 0.0 -15.9 15.9 16.6 1.8
PKI-T Parkland Corporation 41 6170 9.0 -16.2 -18.4 4.1 -1.9 24.5 32.4 38.9 3.0
RCI.B-T Rogers Communications Inc. C 62.5 31680 8.4 -19.4 -10.2 1.4 3.1 16.6 19.9 17.9 3.2
CNR-T Canadian National Railway Co 134.21 95020 14.5 -19.9 -9.0 -1.3 -4.7 10.1 27.1 19.3 1.8

Source: Inovestor

The top 10 stocks that met our criteria are ranked by one-year EPS growth.

Stella-Jones Inc., a producer and marketer of pressure-treated wood products, has the highest one-year EPS growth and the lowest P/E of our list, at 51 per cent and 13 respectively. Given a median P/E of 19.6 in the past five-year period, the company gives the impression of having a noticeable margin of safety. Its major business segments, utility poles and railways ties, counting for approximately 60 per cent of its sales, recorded a sluggish 1 per cent organic growth. It is plausible that clients delayed their investments owing to high lumber prices. On the other hand, other divisions, including residential lumber, more than compensated by registering a 131 per cent organic growth as renovation and lumber prices continued to strengthen. In the next quarters, those divisions are likely to decline as the lumber prices normalize, but the core business could pick up, mitigating the impact.

Alimentation Couche-Tard Inc., the convenience store and gas station giant, had a difficult start to 2021 as the stock stumbled by 16.3 per cent in the year’s first two weeks. The company’s preliminary takeover discussions with French supermarket chain Carrefour SA were not particularly appreciated by investors – nor by France’s government, which opposed any deal. More generally, in recent years investors have been increasingly nervous about the long-term outlook for gasoline-powered vehicles. On May 10, the company issued $1-billion in green bonds to be used exclusively for environmentally friendly projects and community initiatives. The market seems to consider the issuance as a signal management has a long-term transition plan. The share price is up 8.1 per cent in the past month.

Grocery and drugstore owner Metro Inc. registered a steady annual growth of 14.5 per cent and 14.6 per cent (annualized) in the past two years. The pandemic has helped the company to generate higher sales and maintain its robust growth. Despite this, the stock is up only 3.1 per cent in the past year as the market expects a slowdown in revenue as restaurants reopen. Adding Metro to a portfolio would certainly be a contrarian move because the economy should be at full speed next year. Nevertheless, the market is a complex machine of anticipation: Buying at a reasonable price when few others are interested can generate a meaningful return on longer horizons – especially if expectations in the market switch in the meantime.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

These 10 TSX materials stocks are well-placed to benefit from commodities boom

WHAT ARE WE LOOKING FOR?

Canadian materials stocks with momentum and compelling fundamentals.

We use a momentum approach to focus on a sector strongly linked to the runup in commodities prices. We believe that stocks with strong fundamentals will continue to perform well for the foreseeable future.

THE SCREEN (access and save it on the Inovestor for Advisors platform)

We screened Canadian stocks in the materials sector focusing on the following criteria:

  • Market capitalization higher than $500-million;
  • Momentum score higher than 60 – the momentum score (out of 100) tracks short- to medium-term price movements as well as momentum in terms of improving fundamentals;
  • StockPointer (SP) performance score higher than 60 – the score mainly considers risk-adjusted return on capital, earnings per share growth and free cash flow per share. The score varies between zero and 100. A score above 60 is considered higher than average. This is our robust fundamentals criterion;
  • Three-month sales growth higher than 3 per cent – we’re looking for companies in a hot market.

For informational purposes, we have also included return on capital and price-to-book ratios, dividend yield, one-year price return and recent stock price. Please note that some ratios shown may be as of previous quarter’s end.

MORE ABOUT INOVESTOR

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisors can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios and easily communicate investment decisions with clients through client-friendly reports. In addition, Inovestor allows users to create personalized filters, build custom portfolios and carry out in-depth analysis on more than 13,000 companies (Canadian and U.S. stocks and American depositary receipts).

 

TICKER NAME PRICE MKT. CAP ($MIL) MOM. SCORE SP PERF. SCORE AVG. SCORE ROC (%) 3M SALES GRTH. P/B 1Y PRICE RTN. (%) DIV. YIELD (%)
CFP-T Canfor Corporation 31.39 3930 77 79.8 78.4 25.3 14.1 1.6 250.3 N/A
LIF-T Labrador Iron Ore Royalty Co 43.33 2770 70 85.9 78.0 19.2 8.7 4.7 122.8 7.6
CIA-T Champion Iron Ltd. 6.56 3330 80 66.2 73.1 43.9 17.6 4.8 223.2 N/A
IFP-T Interfor Corporation 34.77 2280 79 65.8 72.4 30.8 16.9 1.7 316.9 N/A
ITP-T Intertape Polymer Group Inc. 31.14 1840 77 65.8 71.4 10.2 3.7 4.7 180.8 2.5
CXB-T Calibre Mining Corp. 1.99 660 80 61.9 70.9 26.5 5.7 2.1 38.2 N/A
SJ-T Stella-jones Inc. 49.55 3240 63 77.9 70.5 13.5 4.5 2.4 53.1 1.5
WEF-T Western Forest Products Inc. 2.37 887 70 64.4 67.2 10.3 23.0 1.5 233.8 0.0
KNT-T K92 Mining, Inc. 7.51 1650 66 63.0 64.5 26.9 9.4 7.6 91.6 N/A
ORA-T Aura Minerals Inc 14.8 1080 65 61.5 63.3 20.3 19.8 4.0 212.9 7.1

WHAT WE FOUND

Ten companies made the list, which we have ranked by taking the average of momentum and SP performance scores. Here are three names of note:

Canfor Corp., an integrated forest products company, has the highest average score of our list standing at 78.4 with a balanced exposure to momentum and fundamentals with a score of 77 and 79.8, respectively. Lumber is probably the most high-profile commodity during this pandemic. A hot residential housing market and elevated construction starts, along with do-it-yourself renovators, have created a supply-demand imbalance as the construction industry enters its summer sprint. A bottleneck from the lack of sawmills only exacerbates the imbalance. With its sawmills across Canada, the United States and Sweden, Canfor is well equipped to navigate this disrupted market.

Labrador Iron Ore Royalty Corp.

has a juicy dividend yield of 7.6 per cent, which reflects the robust income stream from its royalties, and a dividend from its minority interest in Iron Ore Co. of Canada (a joint venture between Rio Tinto Group, Mitsubishi Corp. and Labrador Iron Ore.) The mining royalty company has solid fundamentals as shown by its SP performance score of 85.9, the highest of our screen. Iron ore prices have increased by 250 per cent in the past year as big producers such as Vale SA, Rio Tinto Group and BHP Group Ltd. cut their production by between 5 per cent and 20 per cent because of maintenance, as well as adverse weather in Australia. Combine this with strong demand from China’s steel sector and iron ore could very well continue its exceptional run.

Calibre Mining Corp. , a gold extraction company, has surprisingly high momentum with a score of 80. The price of gold has slipped about 10 per cent since August, but it is still 40 per cent higher than two years ago, creating an overall better environment for gold mining companies. The one-year price return is the lowest on our table, which suggests the impressive momentum score leans more toward Calibre’s fundamentals. The company has a return on capital of 26.5 per cent and a price-to-book of just 2.1, which are better than our list average of 22.7 per cent and 3.5, respectively.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free: inovestor.com/en-CA/store/

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

These 10 U.S. large-cap stocks demonstrate consistent, solid profitability

WHAT ARE WE LOOKING FOR?

U.S. large caps with high profitability, below-average risk and attractive valuations.

We use the economic performance index (EPI) and relative EPI to help us find stocks with a healthy adjusted profitability. Essentially, we are willing to tolerate a bit less profitability if the risk is lower or if the valuation is attractive. While we may not find the most profitable U.S. companies, we believe they will have other interesting characteristics that totally compensate for the slightly lower profitability.

THE SCREEN (access and save it on the Inovestor for Advisors platform)

We screened U.S. stocks focusing on the following criteria:

  • Market capitalization higher than US$10-billion;
  • EPI of two or higher – this is the return on capital divided by the cost of capital;
  • Relative EPI of 0.6 or higher – this ratio uses the return on capital adjusted for its market capitalization divided by the cost of capital;
  • Positive three-month percentage change in the economic value-added (EVA) metric. The EVA gives us a sense of how much value the stock is adding for shareholders and is calculated by taking the net operating profit after tax and subtracting the cost of capital. We want a company with improving fundamentals;
  • One-year sales growth higher than 2 per cent – we want a company that manages to grow at least at the rate of inflation.

For informational purposes, we have also included five-year mean return on capital, most recent return on capital, five-year maximum drawdown, price-to-earnings ratio, dividend yield, one-year price return, and recent stock price. The five-year maximum drawdown is the largest percentage decline, from peak to trough, seen over the past five years. Please note that some ratios may be shown as of end of previous quarter.

MORE ABOUT INOVESTOR

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios, and easily communicate investment decisions with clients through client-friendly reports.

WHAT WE FOUND

U.S. large caps with high profitability, below-average risk and attractive valuations

TICKER NAME PRICE MKT. CAP ($MIL) EPI REL. EPI EVA GRTH. 3M (%) 1Y SALES GRTH. (%) ROC (5Y MEAN, %) ROC (%) 5Y MAX DRAWDOWN (%) P/E DIV. YIELD (%) 1Y PRICE RTN. (%)
CLX-N Clorox Company 190.73 23990 4.5 0.9 27.6 22.7 22.4 25.3 -25.1 20.0 2.3 -0.9
PGR-N Progressive Corporation 98.76 57790 4.4 1.2 98.2 9.3 25.3 38.8 -22.3 10.2 0.4 20.5
AZO-N Autozone 1495.84 32960 3.7 0.7 10.3 10.9 25.1 29.3 -42.1 19.0 0.0 51.4
VRTX-Q Vertex Pharmaceuticals 219.39 56780 3.6 0.6 18.0 50.3 22.2 28.7 -31.7 21.3 0.0 -19.7
REGN-Q Regeneron Pharmaceuticals 502.6 53840 3.2 0.9 63.4 8.1 22.8 23.5 -48.1 16.5 0.0 -11.5
BIO-B-N Bio-rad Laboratories 600.87 18570 2.7 0.6 30.2 10.1 9.3 19.4 -31.9 4.8 0.0 44.8
DG-N Dollar General 216.74 51860 2.6 0.8 12.9 21.6 12.6 16.2 -30.8 20.4 0.8 21.1
GIS-N General Mills 61.3 37390 2.4 1.3 46.2 11.1 10.9 12.1 -49.5 14.9 3.3 0.9
TGT-N Target 208.55 103990 2.3 0.6 32.3 19.8 12.4 16.7 -40.2 24.1 1.3 91.4
PKI-N Perkinelmer 133.16 14920 2.0 0.7 80.5 31.2 9.9 16.2 -34.4 20.5 0.2 57.6

Source: Inovestor

The 10 stocks that met our criteria are shown in the accompanying table, ranked by EPI.

Clorox Co. has the highest EPI of our screen, at 4.5. The cleaning products company saw share price gains – and extraordinary profitability – in the early stages of the pandemic, but the stock has fallen about 20 per cent since the end of July and trades at around the same price as a year ago. Similarly to other well-established U.S. companies such as Johnson & Johnson, Procter & Gamble Co. and Colgate-Palmolive Co., Clorox offers a strong consumer brand that has yielded consistent results in the past that are hard to ignore.

Progressive Corp., one of the biggest auto insurance companies in the U.S., has the second-highest EPI, at 4.4, and the second-highest relative EPI, at 1.2. This latter metric reflects a high return on capital of 38.8 per cent and a reasonable valuation based on its low P/E multiple of 10.2. The five-year maximum drawdown of only 22.3 per cent – the lowest on our list – suggests a resilient company. Moreover, Progressive has the highest three-month EVA change, at 98.2 per cent, and the highest five-year return on capital – 25.3 per cent.

AutoZone Inc., an auto parts retailer and distributor, ranks third on our list, with an EPI of 3.7, and solid profitability with a five-year mean return on capital of 25.1. Automobiles could very well be the next discretionary spending of choice for consumers, for three reasons: First, consumer savings are still well above prepandemic level, suggesting there is room for big purchases. Secondly, some discretionary car maintenance may have been delayed because of teleworking. Finally, the main alternatives for large discretionary spending related to the economy’s reopening, such as air travel, still seem less appealing in the near term.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

ESG-friendly Companies that Combine Quality, Growth and Value

WHAT ARE WE LOOKING FOR?

ESG-friendly, quality companies demonstrating growth at acceptable valuations.

Essentially, our search combines the three most used fundamental factors: quality, growth and value. The objective is to find a solid company that grows and has an reasonable valuation. We consider environmental, social and governance criteria as part of our qualitative analysis.

THE SCREEN (access and save it on the Inovestor for Advisors platform)

We screened Canadian stocks focusing on the following criteria:

  • Market capitalization higher than $5-billion;
  • StockPointer (SP) score of 70 or higher – the SP score is a complex composite that focuses on quality and value. The score varies between zero and 100. A score of more than 60 is considered solid.
  • PEG (price/earnings-to-growth) ratio below two – The ratio considers valuation and growth. It is the price-to-earnings ratio divided by the five-year mean of earnings per share growth.
  • ESG score lower than 22.1 – the current score of the S&P/TSX 60. The score uses Sustainalytics’s methodology to calculate unmanaged ESG risks. The score is the sum of the ESG risks. The score mostly varies between zero and 50, where zero stands for the most ESG-friendly company.

For informational purposes, we have also included the recent stock price, P/E ratio, five-year EPS growth mean, ESG scores, three-year dividend growth rate, one-year price return and dividend yield. Please note that some ratios may be shown as of the previous quarter’s end.

MORE ABOUT INOVESTOR

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios and easily communicate investment decisions with clients through client-friendly reports.

WHAT WE FOUND

ESG-friendly companies that combine quality, growth and value

TICKER NAME PRICE MKT. CAP ($MIL) SP SCORE PEG P/E 5Y EPS GRTH. (%) ESG SCORE ENV. SCORE SOC. SCORE GOV. SCORE 3Y DIV. GRTH. (%) 1Y PRICE RTN. (%) DIV. YIELD (%)
MFC-T Manulife Financial Corporati 27.15 52710 72 0.41 9.3 22.6 19.4 1.7 7.5 10.1 11.0 109.3 4.1
QBR-B-T Quebecor Inc. Class B 35.48 8800 74 0.53 16.3 30.7 19.4 2.2 10.1 7.1 96.8 30.7 3.1
H-T Hydro One Limited 28.99 17320 72 0.60 9.8 16.3 16.3 3.4 7.8 5 4.8 38.1 3.5
TD-T Toronto-dominion Bank 82.42 149880 71 1.41 12.5 8.9 19.1 1.2 10.4 7.5 9.6 67.3 3.8
L-T Loblaw Companies Limited 66.59 22130 72 1.43 21.8 15.2 18.6 5 8.4 5.1 6.2 11.5 2.0
DOO-T Brp, Inc. 102.56 9020 73 1.59 42.4 26.7 14.4 0.1 7.6 6.7 -14.5 405.2 0.4
CP-T Canadian Pacific Railway Lim 474.27 63220 70 1.62 26.4 16.3 17 5.9 8.4 2.7 17.6 79.4 0.8
DOL-T Dollarama Inc. 51.25 15900 73 1.94 28.2 14.5 16.2 3.6 7.6 5.1 7.1 44.6 0.4

Source: Inovestor

Life insurer Manulife Financial Corp. has the most reasonable price relative to its growth, with a PEG ratio of 0.41, a result of its low P/E ratio of 9.3 and high EPS growth (five-year mean) of 22.6 per cent. Since the beginning of the year, the Government of Canada 10-year bond yield has increased by approximately one percentage point. Signs of a strong economic recovery tend to push bond yields higher. A rising yield environment tends to favour insurance companies because higher interest rates are inclined to generate higher fees.

Telecommunications company Quebecor Inc. achieved the highest five-year EPS growth of our list, at 30.7 per cent, while selling at a below-average P/E of 16.3. Note also its annual dividend growth of 96.8 per cent in the previous three-year period. The company announced on Feb. 25 that it will lift its quarterly dividend for 2021 by 38 per cent, continuing its streak of dividend hikes. Quebecor could benefit from reduced competition if Rogers Communications Inc.’s deal to purchase Shaw Communications Inc. goes through.

Hydro One Ltd., the electricity transmission and distribution utility serving Ontario, has an ESG score that is 26.2 per cent less than that of the S&P/TSX 60. The company has a virtual monopoly on the transmission of electricity, an essential good, which provides a high degree of stability to its operations. The company’s net income is inflated because of a favourable tax event in the past year, but it should not change its position in the table.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free: inovestor.com/en-CA/store/

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

 

Small caps poised for growth in a post-pandemic world

What are we looking for?

Small caps with solid fundamentals.

We believe small capitalization stocks, generally seen as more risky than large caps, will also be more likely than large caps to take advantage of renewed economic activity as the pandemic recedes in the months ahead.

The screen (access and save it on the Inovestor for Advisors platform)

We screened North American stocks focusing on the following criteria:

  • Market capitalization between $250-million and $1-billion;
  • StockPointer (SP) performance score of 75 or higher. The score mainly considers risk-adjusted return on capital, earnings per share growth and free cash flow per share. The score varies between zero and 100;
  • Sales growth higher than 4 per cent over 24 months – we are looking for a company that can grow at a reasonable rate;
  • One-year return lower than 50 per cent – we are trying to eliminate companies with too much short-term price? momentum as they could be subject to mean reversion, that is, eventually revert to their long-term average levels.

For informational purposes, we have also included the recent stock price, price-to-earning ratio, one-year earnings per share growth and dividend yield. Please note that some ratios may be shown as of end of previous quarter.

More about Inovestor

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisors can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios, and easily communicate investment decisions with clients through client-friendly reports. In addition, Inovestor allows users to create personalized filters, build custom portfolios and carry out in-depth analysis on more than 13,000 companies (Canadian and U.S. stocks and American depositary receipts).

What we found

 

TICKER NAME PRICE MKT. CAP ($MIL) SP PERF. SCORE 24M SALES GRTH. (%) 1Y PRICE RTN. (%) P/E 1Y EPS GRTH. (%) DIV. YIELD (%)
RAY-A-T Stingray Group, Inc. 7.09 520 82.1 48.9 17.8 20.9 -3.6 4.2
SIS-T Savaria Corporation 16.74 855 79.9 45.8 30.8 30.4 18.9 2.9
ITIC-Q Investors Title Company 163.77 310 79.4 51.3 -4.8 7.9 25.0 1.1
HIFS-Q Hingham Institution For Savi 245.00 516 78.0 23.3 27.3 11.9 30.2 0.8
FMNB-Q Farmers National Banc Corp. 13.83 390 77.9 27.5 -13.0 9.4 14.8 3.2
CSW-A-T Corby Spirit And Wine Limite 16.80 477 77.4 4.8 -0.8 15.3 16.6 5.0
RBNC-Q Reliant Bancorp Inc 21.77 355 77.0 91.0 0.1 10.9 39.2 2.2
AGM-N Federal Agricultural Mortgag 83.11 872 75.9 4.6 16.4 10.1 5.2 3.9
CCBG-Q Capital City Bank Group, Inc 24.50 411 75.8 42.1 -13.7 12.7 2.4 2.5
BFC-Q Bank First Corp 69.10 533 75.3 42.1 9.4 15.0 30.6 1.2
TVK-T Terravest Industries, Inc. 17.55 324 75.0 4.2 6.4 10.3 32.7 2.3

*Market cap and recent stock price figures are in native currency.

Music service provider Stingray Group Inc., based in Montreal, has the highest SP performance score of our list. Sales increased vigorously in the last two years partly because of a series of acquisitions. The stock price rose moderately in the last year as the broadcasting and commercial music segment held out, but the radio segment (mostly ads), which counts for 50 per cent of Stingray’s total revenues, fell 40 per cent on a nine-month basis. The company managed to protect its earnings per share despite this bleak time. As radio commercials and social activities return more to pre-pandemic levels, we expect investors to positively re-evaluate the company.

Laval, QC.-based, Savaria Corp., an accessibility and patient handling company, has increased its sales by 45.8 per cent in the past two years, thanks largely to the acquisition of Garaventa Lift, an elevator company. With the pandemic spotlight on long-term care and retirement residences, older people may be more inclined to consider adapting their house to their reality rather than move, which would benefit Savaria. The company announced on Feb. 4 it had acquired Swedish-listed Handicare Group AB, another patient handling company, to reinforce their already well-positioned business in this industry.


Investors Title Co.,
a title insurance provider headquartered in Chapel Hill, N.C., trades at a modest price earnings ratio of 7.9. The company has profited from the booming U.S. residential real estate market over the past two years, achieving 51.3 per cent higher sales over that period, and 25 per cent higher EPS in the past year. If teleworking persists, the strong residential market could very well remain. Despite impressive results, the market appears to be particularly cautious: The company’s stock still trades about 20 per cent below its all-time high of US$204, reached in March, 2018.

Anthony Ménard is an investment analyst at Inovestor Asset Management.

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free: inovestor.com/en-CA/store/

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

 

Eight profitable North American stocks with tempting valuations

What are we looking for?

Companies with strong profitability and below-average valuations.

Companies with high multiples tend to have high expectations. At some point these expectations may exceed the company’s capabilities and result in a poor investment outcome. We believe that analyzing companies with solid profitability and reasonable valuations is an effective way to limit this risk and uncover attractive securities.

The screen (you can find it here on the Inovestor’s platform)

We screened North American stocks focusing on the following criteria:

· Market capitalization higher than $1-billion;

· Five-year mean return on capital higher than 10 per cent. We want a company with solid long-term profitability;

· Free-cash-flow-to-capital higher than 12.5 per cent. We want a company that generates a high amount of free cash flow as a percentage of capital. It shows the company has plenty of capital to invest or to redistribute to shareholders;

· A price-to-book ratio lower than two. We want a company that sells at a reasonable price based on shareholders’ equity;

· A positive price-to-earnings ratio lower than 20. We don’t want to pay too much for the company’s profits.

For informational purposes, we have also included recent stock price, trailing 12-month return on capital, dividend yield and one-year return. Please note that some ratios may be reported as of end of previous quarter.

More about Inovestor

Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added (EVA) approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios, and easily communicate investment decisions with clients through client-friendly reports. In addition, Inovestor allows users to create personalized filters, build custom portfolios and carry out in-depth analysis on more than 13,000 companies (Canadian and U.S. stocks and American depositary receipts).

What we found

Home furnishings retailer Leon’s Furniture Ltd. generates a whopping 33.4-per-cent free cash flow as a percentage of capital. The stock is also inexpensive based on the price-to-earnings ratio of 11.1. With the lockdowns, individuals have necessarily cut back spending on social activities. Interest rates, meanwhile, have dropped substantially. Combined, these elements support the purchase of durable goods. This could explain the company’s above-trend return on capital.

Juice producer Lassonde Industries Inc. is a resilient company as evidenced by its five-year mean return on capital, which, at 14.1 per cent, is about equal to its most recent return on capital. The company’s earnings reports over the past year have been exceptional, owing largely to its market segment: retail consumers. It could be an interesting defensive choice in case of lower-than-expected economic growth or further COVID-19 restrictions.

Lumber, finishing products and pulp producer Canfor Corp. saw its stock price rise by 84.5 per cent in the past year as lumber prices soared by more than 75 per cent. The company is highly cyclical. An investor who believes that the economy will expand vigorously and who has a high risk tolerance may consider the stock to enhance portfolio returns.

Although the screener is for North American companies, it’s notable that five out of eight companies are Canadian, even with this country’s more limited universe of stocks. Valuation criteria (P/E and P/B) would seem to limit the number of U.S. companies, suggesting value investors may want to concentrate their search efforts in the North American market to Canadian-listed names.

 

TICKER NAME PRICE MKT. CAP ($MIL) FCF/CAPITAL (%) RTN. ON CAPITAL – 5Y MEAN (%) P/E P/B RTN. ON CAPITAL (%) 1Y PRICE RTN. (%) DIV. YIELD (%)
LNF-T Leon’s Furniture 21.00 1660 33.4 10.2 11.1 1.7 11.2 23.8 3.0
BIG-N Big Lots** 50.82 1885 20.7 10.2 3.2 1.5 14.1 82.4 2.4
LAS-A-T Lassonde Industries 172.00 1193 18.1 14.1 11.6 1.6 14.2 15.2 1.5
UHS-N Universal Health Services 129.10 10971 17.9 10.2 12.6 1.8 10.4 -12.3 0.6
CFP-T Canfor Corp 23.67 2964 15.1 11.0 17.0 1.6 9.8 84.5 0.0
DISCK-Q Discovery Comm Inc 32.89 16478 14.4 20.6 13.5 1.6 19.0 14.8 0.0
WTE-T Westshore Terminals Investment Corp 17.34 1125 13.3 17.8 8.6 1.5 16.0 -3.5 3.7
IFP-T Interfor Corp 24.04 1617 13.0 11.7 18.1 1.6 14.3 58.6 0.0

*Market cap and stock price figures are in native currency
**Please note that some figures for Big Lots are inflated by a capital gain caused by a sale-leaseback transaction of distribution centres.

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.

Anthony Menard is an investment analyst at Inovestor Asset Management.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.