Canada offers unique advantages over other developed countries. For example, unlike most European countries, Canada is blessed with many natural resources that emerging markets like China need, a stable banking system, a democratic political system, and proximity to the U.S., the world’s largest consumer market.
An article in the Financial Post notes that the Canadian equity market is a good bet this year, according to a research report released today by CIBC:
A new report from CIBC World Markets finds that Canadian stocks are likely to produce the best returns in light of what looks to be a longer-term bear market in bonds, and ongoing fiscal belt tightening in the U.S. and Europe.
“Relative to the U.S. or east Asia, Canada’s equity market carries more insurance against a worsening geopolitical climate in the Middle East, in the form of a larger basket of energy stocks and safe havens like gold shares,” said Avery Shenfeld, chief economist at CIBC, in his latest Economic Insights report.
In addition, Canada presents a good option given the ongoing spectre of inflation haunting emerging market economies.
“Inflation hasn’t run away to the upside, so the Bank of Canada can chart a more careful course of tightening than what might end up being seen in the emerging market economies,” Mr. Shenfled said. “The nation’s fiscal position, while still in need of growth-slowing belt tightening, isn’t as strained on either a deficit/GDP or net debt/GDP basis as that of the U.S. or Europe.”
Ten randomly selected dividend-paying Canadian stocks from different sectors are listed below:
1. Transcanada Corp (TRP)
Sector: Natural Gas Utilities
Current Dividend Yield: 4.37%
2. Manulife Financial Corp (MFC)
Sector: Life Insurance
Current Dividend Yield: 2.82%
3. Telus Corporation (TU)
Sector: Telecom
Current Dividend Yield: 4.59%
4. EnCana Corp (ECA)
Sector: Oil and gas operations
Current Dividend Yield: 2.48%
5. Canadian Pacific Railway Ltd (CP)
Sector: Railroads
Current Dividend Yield: 1.65%
6. Teck Resources Limited (TCK)
Sector: Metals mining
Current Dividend Yield: 1.08%
7. Brookfield Asset Management Inc (BAM)
Sector: Investment Services
Current Dividend Yield: 1.57%
8. Enbridge Inc (ENB)
Sector: Oil Well Services & Equipment
Current Dividend Yield: 3.37%
9. BCE Inc (BCE)
Sector: Telecom
Current Dividend Yield: 5.53%
10. Magna International Inc (MGA)
Sector: Auto & Truck Parts
Current Dividend Yield: 1.99%
Note: Dividend yields noted above are as of Feb. 28, 2011
Disclosure: No Positions
ENB as well as TRP would be fantastic stocks from this list to add on significant pullback.......more so ENB.
I would also add the "Big 5" Canadian banks to this list, particularly TD, RY, BNS.
I'm hoping for a "sell in May" mentality or a general market correction to initiate positions.