Earning Reports in May of 2024

 

May, 2024 will be an interesting month while the NHL playoffs are underway with some Canadian teams having the potential to win their series and get past the first round.

Quarterly earning reports will be coming out as well for some of my stocks in May although these are short term 3 month reports while I look long term. 

However, where my focus is the dividend, it's wise to keep track of companies that have lowered their dividend growth due to several factors such as higher debt and lingering high interest loans, competition, government oversight, etc.

The telecom that's been in the investing news since it's last earnings report, BCE which reports earnings on May 2nd, will have a lot of scrutiny to see if their recent cuts to lower expenses and operational costs has improved. Probably take the rest of 2024 to see any positive results, if any.

All that data and number crunching comes down to analyst's single line quotes with their estimates and did the earnings report miss, meet or exceed their expectations. Investors can then dig into more analyst numbers for a company but I don't bother with that where it's just that ... estimates.

With energy and the moving of oil and natural gas where Canada is ramping up exports this year, Enbridge or ENB reports on May 10th and has an ex-dividend date of May 14th. ENB's current yield is 7.48% and has moved up from it's 52 week low of $42.75.

What they call a boring stock but a good foundation stock is the "powerhouse" utility, Fortis or FTS with companies under it's holdings umbrella all over North America and beyond. FTS reports earnings on May 1st and has an ex-dividend date of May 16th with a current yield of 4.42%.

Courtesy of The Motley Fool and Getty Images

The top banks in Canada begin reporting earnings during the 2nd half of May with the Bank of Montreal, BMO being the laggard in the last earning report ending 2023.

Tools and Canadian Tire

 

The Bank of Canada continues to hold the interest rate of 5% and from an April 10th Reuters article, forecasts meeting it's 2% goal in 2025. 

Higher gasoline prices are expected to keep overall inflation close to 3% in the second quarter of 2024 before it eases to below 2.5% in the second half of the year and returns to the 2% target near the end of 2025.

Kind of looks like an upbeat look ahead but there is no mention about the cost of groceries in that post which is a continuous rising expense these days so I don't pay much attention to the inflation rate for now until the BoC starts to lower that current 23 year high of 5%.

It's been awhile since I checked on the top 10 dividend paying stocks in the list of the TSX 60 and the BTSX, Beat the TSX portfolio listing.

I was surprised to see Canadian Tire, CTC.A  moved up into 10th spot as it's share price has come down and it's yield went up to a current ... 5.48% with a current rounded price of $128. 

The stock is undervalued and has dropped since the companies recent report about winter sales being off due to a milder winter. I figure it goes back to what I mentioned about gas, groceries and everything else being hiked.

There was a time, I'd look forward to their weekly flyer and specials, showing up at their shop when the sales kicked in. That new tool that will come in handy or that Ginsu knife that never dulls. Best pick up that Master Chef knife sharpener on sale just in case.

I'm sure Canadian Tire will work to improve it's lower than expected winter sales heading into summer where it's about pay bonuses for the top executives to make it happen. The ex-dividend date is April 29th, 2024. Is it a good time to buy while the price is down? Decisions and research for the DIY investor as always. The stock is expensive while there is the partial stock buy option Wealthsimple has in place with a proportional dividend payment.

Interesting news recently with Canada's energy sector where a lot more oil and natural gas will be exported which is favourable for more cash for the those energy stocks that will benefit from more product being shipped and the companies that support them with services. 

Trans Mountain pipeline will begin flow in May and in British Columbia, TC Energy's stake in Kitimat, the natural gas export terminal project in British Columbia, scheduled to ramp up later this year perhaps spurring more interest from investors in 2024. 

Alternatives for Idle Cash

 

I enjoy reading the various blogs, newsletters and articles based on dividend investing. Interesting cross section with different viewpoints, strategies, portfolios and information while seeing an interesting gem to jot down, research and invest in from time to time. 

Many a portfolio have some of the same stocks as I do while others have others that work for them and then there are those that are sold with usually a reason why.

This month, I'll add to TD Bank and going by the Graham Number, TD is undervalued. With interest rates dropping sometime this year (hopefully) the big bank stocks will probably increase in price slowly but that's an assumption as always on my part.

The 8th of April is the ex-dividend date for TD and the same day as the much anticipated viewing of the total solar eclipse.

TD did not list HISAs or High Interest Savings Account ETFs after they became more popular with high yields while the elevated interest rates continue but they have recently launched a cash type ETF that works in a similar fashion. Resetting to $50 when the distribution date is announced with a 5% yield. TCSH, or TD Cash Management ETF pays it's first distribution on the 4th of April.

 

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Perhaps an opportunity for cash that is standing by for a future investment and can earn interest income in the meantime while ETFs can be bought and sold anytime during market hours. A good time to buy is when TCSH resets to $50.

When the Bank of Canada does lower interest rates it will slowly bring down the yields on the HISAs and possibly TCSH but for now, it's a wait and see situation.

For more on HISAs and a point of view on the Tawcan blog with Bob and his research on them ... Best High Yield Canadian HISA ETFs