TFSA Investors: 2 Media Stocks for Contrarian Investors

There are some stocks that are beaten down, because they are thought of as irrelevant. When that happens it’s a good time to understand the business model, figure out if rumours of its extinction are true, and if they aren’t true, one can look to buy the stock. If you do find a stock that fits these categories, chances are, you will be able to buy them at a very good bargain, and you can watch your investment soar, as the markets realize what they have overlooked. One such stock is Corus Entertainment (TSX:CJR.B). Corus has been battered in the past decade, going down from $21 in 2015 to $5.31 today. A major reason for this is because Corus is seen as an old fuddy-duddy in the market. It owns and operates 35 TV networks and 15 TV stations as well as 39 radio stations — all entertainment options that people today are moving away from. However, a quick look at Corus’s revenues for the last three years put those rumours to rest. Whatever the naysayers have said about the company, the fact is that Corus has held revenues steady between $1.65 billion and $1.69 billion in the last three fiscal years. The first-quarter results for fiscal 2020 showed revenues of $468 million, slightly more than the same period for fiscal 2019. Q1 consolidated segment profit was $184 million, with a free cash flow of $53 million (up $3.9 million from the previous year) for the quarter, which enabled it to pay down $49 million of bank debt. Clearly, Corus is doing something right. The company has also taken some hard calls, disposing of a non-core asset, Telelatino, in March 2019 and shutting down smaller services in its portfolio, such as Sundance in fiscal 2018, IFC, Cosmo, and, most recently, FYI, in fiscal 2020. In 2019, the company partnered up with Amazon to launch STACKTV, which is available for Amazon Prime subscribers and features many popular Corus channels. As a cherry on the cake, Corus offers a forward dividend of 4.48%, which should work well for investors. Analysts have given it a price target of $8 in this year, which is a gain of over 50% from current levels. Stingray Group Another media stock that has taken a beating is Stingray Group (TSX:RAY.A). Stingray provides curated direct-to-consumer and B2B services, including audio television channels, over 100 radio stations, SVOD content, 4K UHD…

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Is Defensive Stock Enbridge (TSX:ENB) a Good Buy Today?

Enbridge (TSX:ENB)(NYSE:ENB) is one of the most popular stocks in North America, not just because it’s one of the biggest companies in Canada, but because it’s one of the best companies you can own long term. Investors who own Enbridge can buy shares and forget about it or, better yet, continue to add exposure and grow their holding over time, as their portfolio grows. The reason it’s such a high-quality company is because of its operations; Enbridge’s pipelines play a major role in the North American energy industry, transporting nearly a quarter of all the oil and natural gas that is produced. Plus, its cash flows are highly stable and reliable, making it a massive $100 billion cash cow that can be relied on as a sustainable dividend payer. So, having said all that, is the stock a buy today? To answer that, we can look to its valuation and the outlook for its business going forward to see how much value there is in its share price today. Valuation Because Enbridge is one of the best long-term stocks investors can own, naturally, its stock trades at a premium. Still, though, when you look at some of the main metrics, such as a price-to-book ratio of just 1.7 times or a price-to-earnings ratio of 18.3 times, the shares can’t really be considered overvalued. Even looking at its enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio of just 13.25, that’s a fair price to own a mainstay $100 billion company in the Canadian economy. What makes the valuation even more attractive is that Enbridge’s five-year average EV/EBITDA ratio is more than 20 times, meaning the stock is trading below its average valuation from the last five years. A lot of this is due to Enbridge’s rapid increase in its EBITDA; however, the numbers don’t lie, and Enbridge’s stock could easily warrant a higher valuation. Outlook A major part of why Enbridge warrants a higher valuation is due to the company’s positive outlook over the coming years. The company has a history of strong operations performance, and this will only get better, especially as Enbridge continues to find ways to optimize its business and bring more capacity online. It has a number of development projects that will come online over the next few years and continue to make Enbridge the best Canadian company you can own, as…

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How to Generate $1,000 a Month in Dividends From Canadian Stocks

It’s possible to live off monthly dividend income if you have diligently grown your nest egg, and you could do so without taking on too much risk either. In the good, old days, government and corporate bonds used to provide very reliable and, at times, risk-free, regular interest income, but these days the yields are no more, and they’ve even turned negative in some developed economies. To generate respectable cash flows that will augment your Canada Pension Plan (CPP), Old Age Security (OAS) and Guaranteed Income Supplement (GIS) receipts (if one is eligible for all), one could construct a formidable dividend-generating portfolio of Canadian (and some international) stocks and real estate investment trusts (REITs) that could pay monthly distributions well into advanced age. Now that stocks and REITs aren’t as low-risk investments as GICs, bonds, and treasuries, due care is needed on how much risk to capital is posed with each portfolio constituent. If one’s target is to receive $1,000 per month in dividends (and income distributions), which translates to $12,000 in annual receipts from the portfolio, one has to be very realistic on what amount of capital should be deployed, and at what risk thresholds. If a high-yield-at-all-costs asset allocation approach is chosen, then even a $100,000 portfolio could be deployed to achieve the target, but at a 12% required average dividend yield, which would naturally require the assumption of elevated capital and income risk. Dividend yields beyond 7% are usually at risk of being cut, or they usually signal some potential fundamental problem on the stock. With low capital, stocks and REITs that offer double-digit yields may be considered, while still maintaining some reasonable level of diversification. Options include the Dividend 15 Split (TSX:DFN) mutual fund, which declared its 189th consecutive monthly distribution in December last year. DFN’s distribution has been flat at $0.10 per share for several years, and it yields a mouth-watering 13.81%. The fund’s portfolio is invested in 15 high-quality dividend-paying Canadian stocks, including the Big Five chartered banks. Its prospectus specifiies that the distributions will be paid out as long as the net asset value per unit remains above $15, and thanks to a good run in Canadian stocks during the past year, the NAV increased from $17.46 by May to $17.74 at the end of 2019 (net of declared distributions). So, the margin of safety kind of increased recently. To help sustain the high payout,…

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Why Canopy Growth (TSX:WEED) Stock Can Get Back All-Time Highs in 2020

The second phase of cannabis legalization in Canada, often called “Cannabis 2.0,” has reinvigorated many stocks in the sector over the last few months. Cannabis ETFs have gained momentum after being pummeled for most of 2019. Horizons Marijuana Life Sciences ETF has increased 7.6% over the past month as of close on January 16. Canopy Growth remains the biggest Canadian cannabis player. Shares of Canopy Growth have climbed 15.9% in 2019 so far. However, the stock is still down 43% year over year. There are several positive developments that are working in Canopy’s favour that could see it challenge its all-time highs in 2020. Let’s examine how. The edibles explosion The Ontario Cannabis Store (OCS) reportedly ran out of edibles hours after online sales began this week. Deliveries of gummies, chocolates, and other edibles have started to pour in this month. Edibles bring a new dimension to the sector, especially with many consumers wary of smoking or simply averse to the sensation. This method of consumption has proven to be very popular in U.S. states that have pursued legalization. Canopy has started to roll out its cannabis derivative products this month. This includes cannabis chocolates and three cannabis-infused beverage products. The company’s vape products are set for launch later in January. Canopy has established itself as a major player in the early days of “Cannabis 2.0,” and its partnership with Constellation Brands is paying off yet again. More retail locations Canada’s first year of cannabis legalization was mired with difficulties. First, supply issues paralyzed the market and saw legal sales decline in the opening months of 2019. It also swung open the door for the black market to step in and meet this demand. A serous shortage of brick-and-mortar retail locations also proved to be a major hinderance. The industry hopes to avoid this fate in 2020 and beyond. Ontario’s government acknowledged the slow pace of licensing and has taken action to correct its earlier mistakes. The province aims to issue 20 new licences each month beginning in March 2020. Greater availability should provide a big boost to the cannabis industry this year. Movement south of the border Earlier this week, I’d discussed the surge for cannabis stocks. This came after a key U.S. subcommittee held its first legislative hearing on cannabis. There is significant pressure from lawmakers to loosen restrictions, but any meaningful reform still appears remote. Still, Canopy is the most…

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Don’t Just Buy CIBC (TSX:CM) Stock for its 5.3% Yield

Canadian banks are popular for their mix of diversified assets, reliable dividends, and a surprising amount of growth in so saturated a market as blue-chip financials. However, 2019 was a tough year for banks, as they showed their cyclical nature. Value investors still have an opportunity to lock in a richer yield. Today, we’ll take a look at a Bay Street banker with a higher yield than its peers. A 5.3% yield is what stands out when new investors building income portfolios first look at Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) in comparison with other big Canadian lenders. However there are a few more reasons to buy than just passive income. Throw in a projected 16.8% capital appreciation over the next five years, defensive market cap, and acceptable allowance for bad loans, and CIBC is a top low-risk, buy-and-hold stock. Attractive valuation with low market ratios Trading at an estimated 34% discount compared to its fair value in terms of future cash flow, CIBC is good value for money. Its fundamentals compare favourably with the Canadian banking sector as well. While its price to book matches the banking sector point for point, CIBC’s P/E is considerably lower, indicating a strong buy for the value-conscious investor looking to buy a bank stock once and forget it. Are you bullish on the Canadian economy — more so than on our neighbours’ economies? For lower foreign market exposure, stack shares in CIBC ahead of its Big Five peers. And while growth is not necessarily a facet of a bank stock, CIBC is nevertheless looking at 2.25% annual growth in earnings for the foreseeable future. A 48% total return by 2025 makes for a richly rewarding stock just right for a new income portfolio. Lower international risk CIBC is less exposed to uncertainty in the U.S. economy than heavily Americanized banks such as TD Bank. A CIBC stock investment likewise does not carry the type of geopolitical risk from instability in the Pacific Alliance bloc that an investment in Scotiabank adds to an income portfolio. Funded primarily by domestic customer deposits, CIBC has a low level of liability, making it suitable for low-risk investing. Compared with CIBC, one of the top two bank’s in Canada, TD Bank, ticks a few of the same boxes: a 4% yield is a level of magnitude lower but still suitable for a long-range dividend portfolio, while projected total…

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2 Better Stocks to Buy on the Toronto Stock Exchange

When it comes to investing in Brookfield stocks, you can’t go wrong with any of them. Stocks like Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) and Brookfield Infrastructure Partners LP (TSX:BIP.UN)(NYSE:BIP) lead the gains on the Toronto Stock Exchange. In the past 10 years, the price of Brookfield stocks have appreciated by up to 500%. By comparison, the S&P/TSX Composite Index has only increased by 47.47% in the same period. Brookfield Asset Management is the parent company of Brookfield Infrastructure Partners, Brookfield Property Partners, and Brookfield Renewable Partners. The parent company is a publicly traded stock, while its subsidiaries are publicly traded limited partnerships. If you want to own a piece of the entire Brookfield portfolio, you should buy stock in Brookfield Asset Management. By investing in the parent company, Brookfield Asset Management, you can invest in the safety of a diversified company. For Canadian investors hoping to retire one day, stocks boasting the Brookfield name will ensure you enjoy your golden years. The good news is that Brookfield stocks are all highly correlated to one another, so you shouldn’t trouble yourself too much over which Brookfield asset you should buy. The only exception is understanding the tax implications between owning units of limited partnerships versus the stock in the parent company, Brookfield Asset Management. Tax (dis)advantages of Brookfield Infrastructure Partners Owning units of a publicly traded limited partnership has advantages and disadvantages come tax time when you file your income tax return with the Canada Revenue Agency. Cash distributions from a limited partnership are similar to dividends but count as income depending on the type of account in which you own the asset. Owning units of these subsidiary companies may not be the right tax strategy for every Canadian investor. Buying units of publicly traded limited partnership in Canada require the filing of a special tax document, the Schedule K-1. Moreover, even the tax benefits of a Tax-Free Savings Account (TFSA) may not shield you from paying income taxes on the cash distributions from the subsidiaries. Tax professionals sometimes recommend that you own limited partnership assets in Registered Retirement Savings Accounts (RRSPs), as you may be able to defer paying taxes on this partnership income until you withdraw the funds during retirement. You should discuss this with your accountant to see if this applies to your specific tax situation. TFSAs prefer Brookfield Asset Management In the past year, the percentage change in the price of Brookfield Asset Management slightly outpaced that of Brookfield Infrastructure Partners. The…

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Canadian Parents: The RESP Is a Sure-Fire 20% Gain of $7,200 for Your Child

Do you have kids? If so, do you have dreams about your child attending a university or college and building a stable career in the future? Then you might be worried about the costs of post-secondary education. The cost of Canadian schools isn’t too outrageous yet, but if your child gets accepted into a prestigious American college, your total bill could be six figures per year by the time your child turns 18. Luckily, the Canadian government has provided some help in the form of the Retirement Education Savings Plan (RESP) Get the 20% CESG grant It’s not often that you can earn 20% returns on your investment with no risk, which is what the RESP provides for your child. Here’s how you can get it: open an RESP, then contribute $2,500 per year to the account. Each year, you will receive $500 in Canadian Education Savings Grants (CESG). After 15 years, you will have received $7,200 in “free” grant money for your child. There are even proposals where the government has suggested increasing the number of grants, but that hasn’t been finalized yet. Similar to an RRSP, your RESP will grow tax-free within the account then be taxed when your child starts withdrawing it. But the great thing about the RESP is that even though you are contributing to the account, the income will be taxable under your child’s name. Your child will be attending school, so their income will likely be pretty low, meaning they should be taxed very little or nothing. What can you buy in an RESP? There are a lot of options for what to buy for an RESP. It depends on your risk tolerance, but I would recommend buying stocks. The time horizon for an RESP is long, as you have 18 years before your child will attend school. The longer time will allow you to take on more risk. An added benefit is all the dividend returns will be tax-free within the RESP. Consider investing in a robust stock such as BCE (TSX:BCE)(NYSE:BCE), also known as Bell. Bell is one of the largest telecom companies in Canada, with a gigantic market cap of $42.63 billion. There are three primary business segments at the company: Bell Media, Bell Wireless, and Bell Wireline. All three lines contribute to BCE’s bottom line and provide diversification in its product line. Not only is Bell a telecom provider, but…

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1 Great Stock to Buy Today and Then Never, Ever Sell

Increasingly, it seems like the best investors don’t care about P/E ratios, book values, or any of the other traditional valuation metrics. It comes down to quality. They want to see an excellent company, headed by smart management, operating in a good business, and that consistently delivers solid results. If a firm does this enough times, a bit of an aura starts to form around the stock, and investors label it as a “compounder,” the kind of investment that should be owned for a very long time. At that point, nothing else matters. Once a stock becomes a must-own name, valuation goes out the window. As long as the story stays intact, and the market believes growth potential is still there, shares can march higher for a very long time. Let’s take a closer look at a Canadian stock that’s very close to gaining such status, an excellent stock that would look great in any portfolio. Canada’s best insurer Intact Financial (TSX:IFC) seemingly does nothing but post consistently good results. Sure, the property and casualty insurer will stumble every now and again, but that’s usually due to a big natural disaster nobody could have predicted. Besides, that’s the nature of the business. Once we strip out any abnormal one-time issues, the trend is always the same. The company just keeps on chugging along. Remember, insurance companies generate revenue from two different sources. The bulk of the top line comes from car and home insurance premiums. These premiums are then invested until they need to be paid out, and these investment gains are what really adds to the bottom line. Intact does things a little better than most insurance companies. It consistently makes a profit on its underwriting alone, meaning any investment gains are just gravy. Its combined ratio, which is a measure of how well an insurer underwrites risk, is consistently better than its peers. Another area where Intact shines is its growth. The company has been a serial acquirer over the last decade or so, first gobbling up several competitors here in Canada to cement its status as the largest property and casualty insurer in the country. It then turned its attention to the United States, acquiring a company there in 2017 that now accounts for about 15% of its total revenue. Intact has also done a nice job growing organically, using tactics like fostering close relationships to insurance brokers…

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CRA Pro Tips: 2 Crafty Ways to Pay ZERO Taxes on Your Assets

In Canada, we pay high taxes. Although we get a lot of social benefits, like free health care, it comes at a high price. People hate paying taxes. There are entire accounting and law professions devoted to eliminating or reducing taxes. Luckily, you don’t need to hire a high-paid accountant or lawyer to find easy ways to save on taxes. Here are two ways you can pay nothing in taxes on some of your assets. Principal residence exemption Many Canadians largest asset is their house, especially if they live in Toronto or Vancouver. If you live in your principal residence and decide to sell it one day, you won’t have to pay any taxes on it at the time of sale. Be careful about trying to take advantage of this exemption. The CRA is cracking down on homeowners who aren’t really living in residences and just trying to flip a house for a tax-free profit. TFSA your way to zero taxes The Tax-Free Savings Account (TFSA) is a fantastic investment tool for Canadians and one of the few truly tax-free forms of income you can earn. Anything that is invested inside your TFSA, whether it is capital gains, interest income, or dividend income, will grow tax-free. Consider investing in a company such as Telus (TSX:T)(NYSE:TU) in your TFSA. As one of the largest telecom companies in Canada, Telus has a massive $23 billion market cap. Cell phones have become necessary in today’s society, and Telus is at the forefront of filling the need of this constant demand. It’s hard to see a day when Canadians will stop using cell phones, even if there is a recession. Telus also provides managed information technology, business security solutions, and healthcare solutions. Over the next five years, Telus will invest $16 billion in Alberta and create 20,000 jobs. If you’re looking to invest for the long term and earn income, it’s hard to go wrong with Telus. With a healthy 4.67% dividend yield, the company boasts a dividend-growth streak of 15 years. In the latest report of 2019 Q3, the company reported net income of US$1,309 billion, which is a nice 12% increase from 2018 Q3 net income of US $1,235 billion. How much more you can earn in your TFSA If you invest $10,000 in your TFSA and you have an annual rate of return 7%, after 20 years your investment will be…

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AAPL

AAPL APPLE INC NASDAQ:AAPL dragonboys What an epic run since it broke out of flag on dec 12th. Not even single pull back and look poised to push higher since it closed above 316 this past week

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