Why Ballard Systems (TSX:BLDP) Stock Price Has Risen 61% in January So Far

Yes, you read the headline right. Ballard Power Systems (TSX:BLDP)(NASDAQ:BLDP) has risen 61% in January so far. That’s just 17 days! While it may seem like this is right out of left field, coming out of nowhere, the conditions for a Ballard Power stock price rally have actually been building quietly behind the scenes for a while now. Let’s take a look at why Ballard Power Systems stock price is rallying so strong in January. Fuel cells are in the spotlight as momentum builds As I have written about in previous articles, fuel cells stand out as a leading option for the electrification of vehicles. In January, this fact has been getting more attention as the world races toward cleaner energy and cleaner fuel sources. In a joint white paper that was released in early January by consulting firm Deloitte in conjunction with Ballard, hydrogen fuel cells were given flying colours. The analysis concluded that “fuel cell electric vehicles are projected to be less expensive to run than battery electric and internal combustion engine vehicles within 10 years.” It is a bold projection, but based on how quickly costs have been coming down in recent years, the projection is that “the total cost of ownership for commercial vehicles will fall by more than 50% in the next 10 years.” This white paper is just the first one in a planned series of papers that will explore how hydrogen fuel cells are set to power the vehicles of the future. The contracts keep piling up for Ballard Coming off of a strong 2019, Ballard kicked off 2020 with another significant order, this time for its fuel cell stacks that will support backup power systems at German radio towers. The order is for 500 fuel cell stacks through 2021 with the potential for up to 1,500 in additional orders. This is yet another testament to the growing recognition of the value of fuel cells and of Ballard specifically. Ballard stock price finally getting the recognition it deserves The run-up in Ballard Power Systems stock price has been dramatic, not only in January but also in the last year. So, with the one-year return on the stock being north of 250%, investors may be tempted to take profits. I should note that I am in the camp of taking profits when stock prices have gotten ahead of themselves, but with Ballard today, I see…

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It’s Official: This Canadian Stock Will Switch Loyalty to the U.S.

This stock upset shareholders and index funds last year when it announced plans to reincorporate in the United States. Canada-only index funds will need to sell out of the shares, forcing them to take substantial capital losses on the investment. There were rumours that the shareholders wouldn’t vote in favour of the reorganization, but the opposition made up only a small portion of the voting shareholders. This week, Encana (TSX:ECA)(NYSE:ECA) announced that its shareholders had voted to approve the reorganization in the United States. The stock had been underperforming drastically on the TSX in the past decade. Company leadership believes they can attract higher levels of passive investment by moving its incorporation over to the United States. The company will rebrand under the name Ovintiv and exchange one share of Ovintiv stock for five shares of Encana stock. The company leadership expects the share consolidation to improve the comparability of shares with U.S. peers. The reduction in shares outstanding will result in market value approximately five times the current price, while your overall Encana portfolio should see no net gain or loss from the share consolidation. U.S. foreign taxes on dividends and capital gains Of course, reorganization in the United States has many tax implications for Encana shareholders domiciled in Canada. For some Canadian shareholders, it may be better to exit Encana positions altogether rather than dealing with the tax burden of foreign-earned dividend income and capital gains. What you should do entirely depends on your personal tax situation. A good accountant can advise you of the benefits and drawbacks of each option. You may also be able to find good information on the Canada Revenue Agency’s website. Encana has also published some light guidance on the tax bill implications of the reorganization. According to an informational PDF that Encana published on October 31, 2019, the U.S. may withhold between 15% and 30% on dividend payments, depending on the shareholder’s eligibility under the Canada-U.S. Income Tax Treaty. Most Canadian shareholders will qualify for the lower 15% tax rate as part of the treaty. Canada Revenue Agency taxes foreign dividends at a higher rate Luckily, Canadian residents will also qualify for a foreign tax credit when filing with the Canada Revenue Agency. Canadians can claim a tax deduction on all foreign income tax paid to avoid double taxation. While these tax credits can help relieve your tax burden, the Canada Revenue Agency still taxes U.S. dividend income at a higher rate than Canadian…

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Need to Double Your TFSA? Here Are 3 Ways to Do it Safely

Hi, Fools. I’m back to call your attention to three attractive mid-capitalization stocks. As a reminder, I do this because mid-cap companies – those with a market cap of between $2 billion and $10 billion – have two key features: more upside potential than large “blue chip” companies; and less downside risk than speculative small-caps. In other words, if you want to double your TFSA while limiting your downside, mid-cap stocks offer a reasonable way to do it. Let’s get to it. Fair exchange Leading off our list this week is TMX Group (TSX: X), which currently sports a market cap of $6.5 billion. Shares of the Toronto Stock Exchange operator are up about 65% over the past year. TMX’s cost efficiencies (it controls Canada’s largest stock exchange), asset-light business model, and stable cash flows should continue to fuel strong price appreciation in 2020. In Q3, earnings per share increased 7% as revenue improved 2% to $196 million. Based on that strength, management boosted the quarterly dividend 6% to $0.66 per share. “As we look to the fourth quarter of the year and beyond,” said CEO Lou Eccleston, “TMX remains focused on seeking out strategic opportunities to capitalize on emerging industry trends to better serve the evolving needs of our diverse and international client base, while delivering value to shareholders.” TMX shares offer a decent dividend yield of 2.3%. Winning bidder With a market cap of $6.3 billion, Ritchie Bros Auctioneers (TSX:RBA)(NYSE:RBA) is our next mid-cap marvel. Shares of the industrial equipment auctioneer are up 25% over the past year. Ritchie Bros should continue to lean on its extensive customer base (over 530,000 customers), geographic reach, and network advantages to drive strong performance in 2020. In the most recent quarter, earnings increased 9% as revenue jumped 18% to $290 million. More importantly, operating cash flow clocked in at an impressive $309 million. “We are encouraged by improvement in the overall equipment supply, with our sales teams doing a good job of securing volume to help offset some pockets of price deflation in the quarter,” said interim-CEO Karl Werner. Ritchie Bros. shares currently offer a dividend yield of 1.8%. Undervalued asset Rounding out our list this week is CI Financial (TSX:CIX), which sports a market cap of $5 billion. Shares of the asset manager are up about 30% over the past year. While the stock has struggled in recent years on…

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Why Did Aurora Cannabis (TSX:ACB) Stock Lose $12 Billion in Value?

Aurora Cannabis (TSX:ACB)(NYSE:ACB) was once the hottest cannabis stock in the world. In 2016, shares tripled. In 2017, they quadrupled. In 2018, the stock hit a high of $14, when just a few years prior, it was valued at $0.50. Last year, everything changed. The bear market of 2019 may ultimately go down as one of the most painful periods in cannabis history. Billion-dollar companies were forced to the brink of collapse. Even the best-financed competitors saw share price declines exceed 80%. Aurora was unable to avoid destruction. After achieving a valuation of $15 billion in 2018, the company’s market cap has been reduced to just $3 billion. Such rapid downward moves are rare. What happened? More importantly, can you take advantage by buying battered shares? If the company ever regains its former glory, there would be at least 1,000% upside. Here’s what happened During Aurora’s atmospheric rise, it’s difficult to tell just how special the company was. In 2017, for example, shares surged 400%, but stocks like Cronos Group, Canopy Growth, Hexo, and more posted similar gains. Any company even loosely related to cannabis saw its valuation skyrocket. It’s difficult to glean any lessons from this period. It was a classic hype cycle — a rising-tide-lifts-all-boats situation. Actually, the best time to learn something was during the bear market of 2019. Similar to the rise of 2017, last year punished every company in the industry. It was an indiscriminate sell-off, yet the positioning of different companies has become clear. We’ve also gotten a glimpse into what cannabis producers need to do to achieve long-term success. For example, Tilray stock sank last summer after revealing its average realized price per gram dropped 28% to $4.61. Other producers later reported similar struggles. I immediately thought of a report from The Guardian the year prior, which stated that Oregon’s “glut of marijuana — over one million pounds of unsold pot — is in many ways the result of an industry still finding its feet.” Canada is experiencing a similar evolution, with the deleterious effects of commoditization only beginning to be felt. State of affairs Commoditization is the number one risk for the entire cannabis industry. Despite the feeling that marijuana is different, it’s, in many ways, no more difficult to grow than any other crop. As markets open and industry supply scales, it will be a race to the bottom for pricing. Take…

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Investors: Can You Count On These 3 +10% Yields?

Many investors are drawn to the biggest dividends they can find, as they try to maximize their passive-income stream. There’s just one problem: many of these yields aren’t sustainable, and often bad things happen to the stock price when a dividend is cut. That’s the kind of double whammy investors want to avoid. Some folks simply avoid all high-yield dividend payers, creating hard and fast rules, so they don’t waste any time researching these stocks. But I think this strategy is too rigid. Some high-dividend stocks are diamonds in the rough. You just have to search through some duds to find them. Let’s take a closer look at three such stocks. Can they all afford their generous payouts? Vermilion Energy Vermilion Energy (TSX:VET)(NYSE:VET) is an energy producer with assets scattered around the world. It has the majority of its production in North America, but it also produces energy in nations like France, Germany, and Australia, among others. This overseas production is particularly attractive, because it gets Brent Crude prices, which have been higher than North American prices for years now. Although these assets are only projected to be a little over one-third of Vermilion’s total production in 2020, they should account for approximately half its free cash flow. The company has also done an excellent job growing production over the last few years, increasing investment while still keeping the balance sheet in good shape. In 2016, it produced just over 60,000 barrels of oil per day. 2020’s production should be between 100,000 and 103,000 barrels per day. Operationally, Vermilion has done a nice job. But what about the future of its 12.9% dividend? Ultimately, it comes down to this: Vermilion is highly dependent on the price of crude oil. If it stays around the same or goes up from here, the dividend is fine. It can afford both capital expenditures and the payout. But if crude tanks again, the payout is in serious jeopardy. Chemtrade Logistics Chemtrade Logistics (TSX:CHE.UN) is in the chemicals business. It provides various materials needed for oil refining, water treatment, and pulp and paper production. It’s a competitive business, with buyers caring mostly about price for these commodity products. The company has also been dealing with a few issues lately, including a lawsuit against a recently acquired subsidiary. It was forced to put cash aside to deal with that contingency. It also reported lacklustre numbers because…

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TSX Stock Sell-off: It’s Time to Buy This Market Mover

Earnings are a great time to pick up stock for cheap. Stocks can quickly become undervalued when investors overreact to a slight earnings miss from company guidance. It is at these moments that you want to increase positions in top market movers on the Toronto Stock Exchange (TSX) in Canada. Bombardier (TSX:BBD.B) is at the top of the list of market movers at the start of 2020. On Thursday, the stock plummeted from $1.80 to $1.14 per share — a nearly 37% loss in value in one day. Shareholders reacted negatively to a slight sales and earnings miss from guidance. The good news is that the company is promising an aggressive deleveraging strategy. At the beginning of 2015, Bombardier acquired more debt on its balance sheet, subsequently reducing the company’s net worth. Shareholders accelerated stock selloffs in response, and Bombardier’s net worth entered negative territory for the second half of 2015. The stock regained some of its value during 2019 — only to fall again after leadership failed to materialize promises of a turnaround. Break-even profit margins The profit margin on Bombardier’s business activities is a negative 0.08%, which is about zero — or break even. After paying debtholders, there aren’t any profits left over for shareholders. Thus, shareholders have some serious complaints about the level of debt the company has maintained for the past few years. Until management shows some progress in deleveraging, the price of shares in the stock will suffer. Luckily for you, this means a buying opportunity. The company has intentions to deleverage, according to recent management statements, and will make some progress toward this goal over the next year. If you buy now, you can capture some of the price appreciation in the stock as capital gains in your Tax-Free Savings Account (TFSA). Negative levered free cash flow No other statistic demonstrates Bombardier’s troubles more than the negative levered free cash flow. With a levered free cash flow at a negative $493.88 million, the company has no way of giving stockholders returns in the form of dividends or share repurchases anytime in the near future. Understanding this, investors aren’t buying — they are selling the shares of the stock and driving down the price. If Bombardier’s management wants to improve the stock’s price performance on the TSX, they need to deleverage and bring the levered free cash flow back into positive territory. As long as shareholders understand that…

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Forget Hexo (TSX:HEXO) Stock! This High-Yield Dividend Stock Is a Sure Winner

Hexo’s stock price has tumbled about 80% from its high. Buying cannabis stocks is like going on a roller-coaster ride with your eyes closed — you don’t know when you’ll fall or be upside down in a loop. For more certain returns, invest in Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY). Price action Hexo investors probably don’t care about fundamentals, because the company is still losing money. They’re dominated by traders who look at the technical charts and the price action of the stock. It’s beneficial to do this as a part of the analysis for fundamentally sound stocks. Before discussing Brookfield Property’s fundamentals, let’s take a look at the stock’s price action. Since BPY stock was listed, it has pretty much traded sideways. I believe that the stock is accumulating strength and will eventually break out. Actually, the real estate stock seems to be at the initial stage of breaking out, as it has popped more than 5% in the last week. A safe dividend yield of 6.9% Brookfield Property’s steadily growing payout suggests it’s fundamentally strong. In the past five years, the real estate stock increased its cash distribution by 32% on a per-unit basis. That works out to be 5.7% per year — more than twice the inflation rate! The stock originally offered a dividend yield of about 5%. Thanks to the stagnant stock price and growing cash distribution, it now offers a massive yield of close to 6.9%. The high-yield dividend stock will become more valuable, as it keeps on increasing its payout over time. What supports BPY’s dividend Brookfield Property’s cash distribution is supported by a mammoth international real estate portfolio that’s diversified across office, retail, multifamily, industrial, hospitality, triple net lease, self-storage, student housing, and manufactured housing assets. The portfolio consists of US$193 billion of assets under management, including properties in Canada, the United States, Brazil, Europe, the Middle East, and the Asia-Pacific region. Brookfield Property has historically generated funds from operations (FFO) growth of roughly 8% per year on a per-unit basis. This has allowed it to boost its payout by close to 6% per year in the period with a sustainable payout ratio of about 70%. The real estate company also earns substantial gains from its opportunistic investment portfolio. As this portfolio grows larger over time, it’s able to book more massive gains. Meanwhile, it generates nice cash flows from the mispriced assets. Over the next…

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Canadian Retirees: 3 Must-Own Dividend Stars

Like many other countries in the developed world, Canada is facing an aging population that will have a significant economic, political, and social impact in the coming decades. Canadian seniors are expected to make up nearly a quarter of the overall population by 2030. Naturally, this also means that the number of retirees will climb significantly in the coming years. A recent Royal Bank survey of Canadians aged 50 and up revealed that 55% of respondents expect to know their retirement date more than one year in advance. Half of retirees said they plan to work in retirement. This is a risky expectation, as many retirees find it difficult to find lucrative work in their retirement. Instead, retirees should look to generate income through intelligent investing. Today, I want to look at three rock-solid dividend stocks that can provide capital growth and steady income for retirees. Genworth MI Canada When the new year started, I’d listed Genworth MI Canada (TSX:MIC) as one of my top dividend stocks to start this decade. Shares of Genworth have climbed 46% year over year as of close on January 16. Not only is this is a quality company, but there is reason for optimism, as the Canadian housing market rebounded nicely in 2019. The company is expected to release its fourth-quarter and full-year results for 2019 in late February. In the year-to-date period in 2019, Genworth reported net income of $318 million, which was down from $371 million in the prior year. However, premiums written did increase to $518 million over $483 million largely on the back of an improved housing market. Genworth stock last had a price-to-earnings (P/E) ratio of 13 and a price-to-book (P/B) value of 1.3, which is favourable considering it is close to a 52-week high. It last increased its quarterly dividend to $0.54 per share, which represents a 3.5% yield. IGM Financial IGM Financial (TSX:IGM) is one of the largest wealth asset management companies operating in Canada. Its activities are carried out through subsidiaries like Mackenzie Investments, IG Wealth Management, and Investment Planning Counsel. Shares of IGM Financial have climbed 26% year over year. The company is set to release its fourth-quarter and full-year 2019 results on February 14. In the third quarter, IGM Financial reported net earnings of $202.5 million, or $0.85 per share, compared to $198.2 million, or $0.82 per share, in Q3 2018. It achieved record-high…

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Avoid This Controversial Canadian Stock

While other stocks have made tremendous gains in the past four years, the share price of Maple Leaf Foods (TSX:MFI) is relatively at the same level it was at the beginning of 2016. Despite reaching an all-time high in December of 2017, the stock has recently been under pressure since its latest earnings release. Last week, the company gained attention when CEO Michael McCain made headlines with his controversial tweets regarding the unintentional Iranian missile strike of Ukrainian International Airlines flight 752, which killed 176 people. CEO wades into controversy While most CEOs consider a public political statement regarding such a tragedy off limits, the CEO of Maple Leaf Foods voiced his thoughts publicly. Using the company’s Twitter feed, McCain expressed outrage over the deaths, saying “Canadians needlessly lost their lives in the crossfire.” In a series of four tweets, McCain went on to bash U.S. president Donald Trump. McCain wanted the world to know he was “livid,” as he and the company mourned the deaths of a colleague’s wife and son who were on board the flight. Almost immediately after the four tweets, the internet erupted. The morning after the comments were made, the hashtag #BoycottMapleLeafFoods was trending on Twitter. One financial analyst admitted he “had never seen another CEO in Canada doing something like this ever before.” Thus far, the comments from the CEO have caused little effect on Maple Leaf stock. As of this writing, the stock is trading at $25.18, although the stock briefly fell under $25 the morning after the CEO’s comments. Stock under pressure The company’s stock has been under pressure since its last quarterly earnings report on October 30, 2019. Shares of the stock fell over 13.5%, as the company reported a decline in earnings of 89.7%, even as sales increased 13.8% year over year. Maple Leaf reported sales of $995.8 million with adjusted earnings of $0.03. Maple Leaf attributed the earnings decline to a recent pork ban in China, after the country discovered several fake export certificates for these products. In addition, hog prices worldwide showed volatility in 2019 due to an outbreak of the African Swine Fever virus in Asia. The company also incurred nearly $50 million in extra expenses for the first nine months of 2019 relative to the previous year, primarily driven by the implementation of the company’s plant-based protein strategy. Maple Leaf is attempting to drive sales and secure…

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2 of the Hottest Canadian Stocks to Buy Now

Often times when investors are looking for their next investment, they’ll look to a stock that’s been sold off and is trading for cheaper than it should be. While this can be a rewarding strategy, buying turnaround stocks and owning them while they ascend back to their previous levels and full potential; sometimes the best investments come from finding stocks that are on a hot streak. This way you can use the stocks natural momentum, and chances are its business will continue to expand over the years. Investors should be careful, however, as trying to employ this strategy over the short term is essential speculation, and much higher risk. It’s paramount to find companies that are on long-term hot streaks, because buying in early enough could result in years of investment growth and large percentage returns. When Shopify grew by roughly 50% in 2016, investors who may have decided to wait for a pullback to gain some exposure would have gotten the chance to do so; since the end of 2016, the stock is up more than 900%. While Shopify continues to have growth potential, investors who weren’t invested before this major jump have missed the majority of the growth, which is why you want to identify hot stocks as early as possible and gain the exposure before the share price takes off. Two of the hottest stocks on the TSX today are Aritzia Inc (TSX:ATZ) and Cargojet Inc (TSX:CJT). Aritzia Aritzia is a retailer and women’s fashion company that has boutiques in Canada and the United States. At a time when consumers are shifting more of their shopping online, Aritzia is defying all odds, growing its business at an incredible pace. It has crafted out its own segment of the market that has earned its products a premium, especially in comparison to some other fast fashion choices, leaving its products in high demand. The company has done a brilliant job of using influencers to drive awareness to its business and new fashion lines that it’s developed in house. It also uses the boutiques it opens to generate brand awareness which it uses to help drive ecommerce sales, in order to attract new customers. The fact that the stores help to generate awareness in addition to being a way for the company to get its product to market makes the boutiques all that much more valuable. Plus, the company has…

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