Tag Archives: TSX:BNS

The Market is Spooked Out! But You Shouldn’t Be.

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The U.S. and Canadian stock markets have declined about 8% and 9%, respectively, from their 52-week highs. They’re spooked out from the Halloween month!

Let’s take a step back and be objective. The U.S. market is still about 29% higher than three years ago. The Canadian market? About 12% higher. From five years ago, the U.S. market is 52% higher and the Canadian market is 15% higher.

SPY Chart

SPY data by YCharts. The 10-year price action of SPY and TSX:XIU

You get the big picture. The stock markets go up over the long term. Historically, it has always been money-making opportunities to buy quality companies on dips. And this dip is no different if you find great businesses to be attractively priced.

Here are some North American dividend-growth stocks that I find compelling today.

Undervalued Healthcare Stock

halloween

AbbVie (NYSE:ABBV) offers a safe 4.7%. Its payout ratio of less than 50% is sustainable.

Since AbbVie was spun off from Abbott Labs (NYSE:ABT) in 2013, it has increased its dividend every year thereafter. Its four-year dividend growth rate is 13.2%. Its trailing 12-month dividend per share is 40% higher than the previous 12 months.

The spooked market has brought AbbVie back into undervalued territory. At less than US$82 per share, it trades at a blended P/E of about 11. Analysts estimate the company will grow its earnings per share by at least 12% per year for the next three to five years. Read More

Benefit from Rising Interest Rates with the Big 5 Canadian Banks

This is a guest contribution by Nick McCullum of Sure Dividend. Sure Dividend uses The 8 Rules of Dividend Investing to identify high-quality dividend stocks suitable for long-term investment.

The Big 5 Canadian banks offer great dividends and the stocks look poised for steady long-term growth if interest rates continue to go higher.

This article will discuss:

  • why we think interest rates in North America are going higher,
  • 5 actionable investment ideas that allow investors to benefit from rising interest rates, and
  • why the banks will benefit from rising interest rates

Interest Rates Are Heading Higher

In both Canada and the United States, the trend is clear: interest rates are on their way up after a prolonged period at near-zero benchmark rates.

In July, the Bank of Canada raised its benchmark interest for the first time since 2010. While the bank did not communicate any concrete plans for future rate hikes, it is likely that more are coming.

Graph of Bank of Canada Overnight Money Market Financing Rate from 1975-2017

Source: YCharts

In the United States, the trend is even more clear.

Read More

Most Popular Articles from January 18-24, 2016

Thousands of investors found the following articles useful last week; you might, too! In these articles, I talked about what I learned from the financial crisis of 2008 and how it applies to the current market downturn, tips for new investors, and what not to do in a falling market.

A bear fights against a bull

Top Article: What I Learned From the Financial Crisis of 2008

Investors who experienced the financial crisis of 2008 would remember the scary experience. For example, the Big Five Canadian banks fell 50% from the 2008 highs to the 2009 lows.

I bought shares of Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) after it fell about 24% from its 2008 high. Yet, it went on to fall another 30%. To learn how I reacted, what lessons I learned, and how I applied the experience to the current market downturn, read more at What I Learned From the Financial Crisis of 2008.

Top Article #2: Tips for Smart Investing

Investing is not exactly easy, but it doesn’t have to be complex either. New investors can start by buying only quality, dividend stocks when the market is down. That way, you’re not paying too much for companies; lower prices also gets you a higher income to start. How?

Just in October, Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) cost as much as $102 per share and yielded only 4.4%. Today, after the pullback, it only costs under $88 per share and yields almost 5.3%. Immediate income boost!

For more investment tips, go to New Investors: Tips for Smart Investing. Read More