2 stocks for long term investors near 52 week lows

2 Canadian stocks to check out

Here are 2 stocks currently at or near their 52 week low.  Each has their own challenges, but I believe both will look like great deals a couple years from now.  If you have time on your side, and can stomach some short term volatility I recommend looking a little closer at the following:

Diversified Royalty $DIV

DIV is a royalty corporation that pays out royalties each month, and currently owns the following royalty streams:

  • Mr. Lube
  • Air Miles
  • Sutton Realty
  • Mr. Mikes

The stock has dropped significantly over the last couple of weeks because investors are concerned about the payout ratio.  The company’s payout ratio is currently over 100% which is typically unsustainable and usually results in a dividend cut.  The situation is a little bit different here, because DIV is sitting on a pile of cash from a previous sale, so they can afford to continue to pay out over 100% for the foreseeable future.  Obviously this cannot go on forever, and eventually they will need to increase revenue to get the payout ratio in line.  The management team is continually looking to add new royalty streams (and has the cash to do it).  I am confident they will pull off another deal before the need to cut the dividend.  They seem to be confident as well, as insiders have continued to buy shares.  If you are okay with a little turbulence in the share price, and confident they can pull off another deal, now might be a good time to snatch up some shares as the recent dip has driven the yield up to almost 8%!

The RBC street consensus has this listed as a strong buy as well.


NFI GROUP (Previously New Flyer) $NFI

With over 8,900 team members operating from more than 50 facilities across ten countries, NFI is a leading independent global bus manufacturer.  SOURCE

Here is another stock that has taken a beating lately.  The stock is at it’s 52 week low, and currently trading at $28.26.  To put in perspective just how far it has fallen; in September the stock was trading  over $52.00.

The stock had run up and basically got ahead of itself.  It was trading at an extremely high P/E of 25+ on top of that they recently announced a few setbacks and a lowered updated guidance.  This got investors thinking they should take some profit and cash out.  The stock now trades at a reasonable P/E of 9.5.   The company is still fundamentally sound, and pays a hefty yet safe 5.94% dividend.  If you believe (like I do) that hybrid, electric vehicles are the future, than NFI seems a safe bet to continue to grow.

There may be some continued downward pressure in the short term, but again if you are a young investor with time on your side, I’d gladly tuck this one away in a TFSA or RRSP, collect the dividend and wait for the stock price to catch up.  I’d look at this anywhere below $30/share.

RBC currently rates this a buy with a fair value of $37.64.

*I currently own Diversified Royalty, but have no position in NFI.  That said, it is on my watchlist and I may start a position in it soon.


Stock Talk: ETF’s, Algonquin, Power Corp, Artis & Interrent Reit

Stock & ETF Analysis

I decided it would be a fun exercise to go through my portfolio, and look at some of the stocks & funds I currently own.  The goal is to give a quick analysis on how it’s performed so far, take a look at how it is positioned for the future, and determine if I should continue to hold, add to my position or get rid of it.

Let’s start with a couple of funds I own, and then dig into a few individual stocks.

  1. XAW:

What it is: A low cost(0.22% MER), diversified (over 8000 companies) equity ETF that owns stocks from all around the world EXCEPT Canada.

Why I bought it: I owned a lot of Canadian funds/stocks. I was looking for an easy way to diversify.  I don’t have the time to analyse thousands of US & Global stocks, so I wanted an easy to manage solution.


Average Purchase Price $25.07
Current Price $25.75
% Gain or (Loss) 2.68%
# of shares originally purchased 2438
Total Shares Dripped 54
2018 Dividends/Distribution Received $1,329.88
Buy, Sell, Hold? Hold

Final Thoughts: I’ve only owned this for about a year.  The funds were originally invested in a high cost global mutual fund with mediocre returns.  I was impressed with the low MER, and past performance of XAW so I transferred the funds over.  So far I’ve been pretty happy with the move.  I am not currently adding any cash to this as it is in my RRSP, and I am currently in the process of reducing my RRSP contributions.

I will continue to hold & DRIP shares of this – most likely until retirement barring any major changes.  In 2018, XAW distributed $1329.88 to me which resulted in 54 new shares.

I’ve recommended this fund to a few friends and coworkers, who were sick of paying high fees, in different funds their banks had recommended.  Just remember, there is no Canadian exposure – so if you don’t already have Canadian Equity exposure, this may not be for you.


What it is:  This is your every day mutual fund.  It holds Canadian stocks, and pays a monthly distribution.  I own the “D” series of this stock, meaning I purchased it myself directly, so the management fee is slightly lower.  The current Series D MER on this fund is 1.04%.  Typically I wouldn’t be happy paying a fee this high, however I love this fund, even after the 1.04% fee, it has returned great results.  I’ve owned this fund for close to 10 years, however the results below will only show the last year (since I moved it to my direct investing).  The funds to year return (after fees) is 15.12%!

Why I bought it: If I am being honest, I don’t remember exactly why I chose this fund. I was in my early 20’s,  but I started contributing to it when I was young, and continued for the last 9 years.  I’ve since stopped adding to my position, however I still DRIP quite a few shares each month.


Average Purchase Price $28.61
Current Price $29.53
% Gain or (Loss) 3.21%*
# of shares originally purchased 2141
Total Shares Dripped 114
2018 Dividends/Distribution Received $3236.96
Buy, Sell, Hold? Hold/Buy

*My returns are actually closer to 13%.  About a year ago, I switched it from the Series A (higher fee) fund to the direct investing option, so my returns below will only show the last 14 months after I transferred my shares.

Final Thoughts: I can’t say enough good things about this fund.  I’ve owned it for a decade, and even though I’ve paid a lot in fees to own it – the returns have been spectacular.  I’ve yet to find a similar Canadian fund with better returns over a large enough sample size.  Although I am not contributing any new money to this currently, I am adding over 100 shares each year via DRIP.  This fund provides a nice monthly payout and has continually provided capital appreciation as well.


Algonquin Power

What it is: Algonquin Power & Utilities Corp. is a renewable energy and utility conglomerate with assets across North America. Algonquin actively invests in hydroelectric, wind and solar power facilities, and utility businesses.

Why I bought it: I had heard a lot of people discussing this stock a few years ago, so I checked it out.  At the time it was trading around $9.00.  I had recently sold off all my oil stocks, and wanted to get into a “cleaner” energy stock.  Algonquin had (and still has) a history of raising their dividend, and growing their revenues via acquisitions.  The dividend is paid in $USD which is nice too!  I actually purchased this on 2 separate occasions.  My first purchase was around $9.95, and my most recent was around $12.00.


Average Purchase Price $11.87
Current Price $14.96
% Gain or (Loss) 26.01%
# of shares originally purchased 858
# of shares DRIPPED 53
2018 Dividends/Distribution Received $531.30
Buy, Sell, Hold? Hold/Buy

Final Thoughts: I’ve done really well on this stock.  I don’t have any plans to add to it right now, as it is currently trading near it’s 52 week high.  I am however continuing to DRIP shares of this each quarter, and should be over 1000 shares in no time.  I expect another dividend raise this year as well.  Although the price is not as attractive as it once was, I expect the P/E to come down significantly as they continue to add revenue/customers via acquisition.  If I didn’t already own a decent chunk of this one, I’d rate it a buy.


Power Corp of Canada Stock

What it is: Power Corporation of Canada is a Canadian multinational diversified management and holding company. Power Corp is the holding company of: Power Financial, Great West Life, London Life, and much more. Although POWER CORP owns a lot of wealth management/investment companies, and Insurance – they also recently invested in the robo-advisor WealthSimple which I think is a great long term move.

Why I bought it: I had flipped some penny/weed stocks into some real earnings, and decided I wanted to get out of the day trading/speculating and into owning some real blue chip, dividend payers.  When you think of blue chip Canadian Stocks, POWER CORP is right up there with the banks and telcos.  Power Corp has raised their dividend every year for the last 5 years, and has a payout ratio of around 50%.  I’ve already received a dividend raise since I originally purchased this stock, and I expect another one this year.


Average Purchase Price $31.61
Current Price $29.78
% Gain or (Loss) -5.81%
# of shares originally purchased 200
# of Shares DRIPPED 9
2018 Dividends/Distribution Received $305.48
Buy, Sell, Hold? Hold/Buy

Final Thoughts: While the stock itself hasn’t done much over the last few years, the company boasts an impressive balance sheet, growing revenue, a very sustainable payout ratio and a growing dividend.  If you are looking for massive capital growth – this probably isn’t for you.  If you want a safe, growing dividend – I’d definitely recommend it.  Power Corp recently also just announced a MASSIVE share buyback program of 1.5 BILLION dollars.  Yes you read that right.  Clearly they believe the shares are under valued as well.  I treat this stock more like a bond – I don’t expect much capital growth, but it pays a juicy (5.16%) & safe (and growing) dividend, so I’m okay with that.


5. Artis Reit

Artis Reit

What it is: A REIT that owns Office, Retail & Industrial buildings all across North America.  The head office is located in my home town of Winnipeg.

Why I bought it:  One of the first stocks I ever bought, I was attracted to the yield, as well as the fact it is a local company.  In fact, I can see their head office from my office window.  I like the fact they have diversified their portfolio away from Alberta, and have grown their presence in the U.S.A.


Average Purchase Price $12.85
Current Price $10.96
% Gain or (Loss) -14.75%
# of shares originally purchased 500
# of Shares DRIPPED 98
2018 Dividends/Distribution Received $590.49
Buy, Sell, Hold? Buy

Final Thoughts:  I am torn on this one.  It hasn’t worked out great for me so far – however I believe they are on the right track to turning things around.  At the end of 2018 Artis slashed the dividend in half.  This resulted in a big drop in share price.  When they slashed the dividend, they announced plans to sell a few non core assets, and start buying back a huge amount of shares.  In the last 3 months, they’ve already cancelled around 8 million shares.  The payout ratio is now sitting at a very reasonable 45% and they continue to buy back/cancel shares almost every day.  The NAV (Net Asset Value) is currently around $15.00, and it still pays a respectable 4.93% dividend.  The most important thing about the dividend, is that it is now extremely safe. I will continue to hold, and if it drops below 10.00 again I may add to it.


6. Interrent Reit

Interrent Reit Stock

What it is: A residential REIT that owns buildings in Ontario & Quebec.

Why I bought it:  At the time I purchased this, I already owned REIT’s in the Office, Industrial and Commercial spaces.  I was looking for a residential REIT to add to my portfolio, so I did some research on a few, ran a few stock screens, and this one came out on top.


Average Purchase Price $9.77
Current Price $13.91
% Gain or (Loss) 42.28%
# of shares originally purchased 103
# of Shares DRIPPED 0
2018 Dividends/Distribution Received $21.05
Buy, Sell, Hold? Buy

Final Thoughts:  This stock has been absolutely wonderful so far.  I’m up over 40%, and they’ve already raised their dividend.  I expect multiple dividend raises over the coming years, as they continue to have a conservative payout ratio compared to other REIT’s, and they have grown their funds from operations (FFO) per unit on average by over 27% per year since 2010!  My only regret was not having more cash at the time to buy more.  I keep waiting for a dip in price to add some more – but until then I will hold.  According to their most recent report, 12 of the 13 analysts covering IIP, currently rate it a BUY and/or OUTPERFORM.

That’s all for today kids!  Next time I will dig into a few other holdings: Transcontinental, Chorus Aviation, Intertape Polymer and Plaza Reit.