Happy New Year 2025 and the Big Banks

 

2025 will be a year of government and leader change in North America with Trump taking office in the US on January 20th. Possibly in Canada. Justin Trudeau and the Liberal party will face headwinds where a non-confidence vote could be coming in January.

Otherwise, there's always a lot going on besides the US tariff threats that will probably push up inflation and effect interest rates plus the daily economic news which the stock market reacts to. 

Meanwhile, where sectors and stock prices move with the news and social media, I check on corporation financials and statistics I hold when making further buys. Ideal, is a growing dividend going forward which has that compounding effect with a stock that's undervalued. With undervalued stocks, there's that potential for stock price gains plus the cash dividend.

Blackrock's ... XIU, iShares S&P/TSX 60 Index ETF with an inception date of Sept. 28th, 1999 is widely used in comparisons and I check on it compared to my portfolio where I'm more focused in stocks among the top twenty by dividend yield ranking in the TSX 60 with a growing dividend for income while XIU's distributions bounce around from year to year.

However, looking at XIU's impressive performance returns with 24.96% for the Year to Date (up to Nov 30th, 2024) ... It's a benchmark I would like to match but in most cases, I'll have to sacrifice some performance for the dividend yield.

                               

In the new year, I'll be adding to BNS, Bank of Nova Scotia with an ex-dividend date of January, 7th, 2025 with a current 5.47% yield. The drawback with BNS where I'm looking for dividend growth is that there hasn't been any since 2023. Perhaps in 2025 where the Bank has been making positive moves of late and expanding into the US.

Of the top banks in Canada, TD is the underdog bank going through a CEO transition and beefing up their compliance department. TD's stock will probably have slow growth for awhile but I'll take the 5.34% yield and a recent dividend increase while I wait for better times. The ex-dividend date for TD is on the 10th of January, 2025.

Reading up on the JP Morgan ETFs I got into. Both JEPI and JEPQ with US exposure, will have a varying distribution and yield from month to month going forward. JP Morgan Canada plans to add more ETFs with US and international holdings. TMX Money calculates the yearly yield for JEPI at 6.32% currently and for JEPQ, 14.66% being listed in their Top Dividend 50 list while I'm taking the risk factor into account.

Happy holidays and I look forward to the 2025 events that will rock the stock market world from time to time and I'll see how it all looks mid month January when Canadian Banks have ex-dividend dates plus interesting ETFs.

 

Building a Portfolio, Mid December 2024

 

I recently read an article on the Globe and Mail about having too many stocks in a Portfolio but it's a preference to whatever sector mix and ranking an investor prefers and works for him or her.

I currently have 20 dividend paying stocks and 6 ETFs/Funds and always looking at other stocks for dividend and hopefully, capital growth with some being "bond like" with a steady monthly dividend payment. This snippet from that article kind of fits the way I approach the Markets.

Just as with building a house, a portfolio is not built in a day. It must be attended to with shares carefully added and nurtured. It is wise to look it over quarterly and see what variations should be made, if any. Avoid haste. This is indeed a long-term exercise where the best results are relatively slow and sure.

My most concentrated sectors are Financial, followed by Energy where I further bought Canadian Natural Resources, CNQ with a 7.4% dividend increase and Pembina Pipeline, PPL this month. The oil and growing natural gas buildup are behind these stocks, making their money here in Canada, by international export, shipping and providing resources for the growing electricity demand. Data centres, with some in the planning stages to build huge complexes will need an enormous amount of power ... probably a lot of alternative energy sources involved as well.

                                        From Forbes article about AI, Data Centers and Cooling

SOBO, South Bow is on my radar for more buying with about a 8% yield and an ex-dividend date of New Year's Eve. SOBO has gained nearly 23% since it's spinoff from TRP, TC Energy but slowed up over the last month.

A utility I got into last quarter is Capital Power, CPX with a current 4.27% yield and increased it's dividend by 6% for September, 2024. A popular stock with it's price climbing by 60% this year. Caution here where CPX is currently over-valued. The ex-dividend date is on the 31st of December.  

Concluding for today and wishing you a Merry Christmas, I like this comparison from a retired lady living in Ontario and author of the Our Life Financial newsletter I receive monthly ... keeping in mind the "boring companies" also pay dividends.

A lot of people get caught up in the hype and the media does a very good job at promoting stocks that are flashy, encouraging young (and old) investors to invest in the high flyers. I mean look at the S&P 500 this year thanks to the Magnificent 7 (namely Nvidia). They have had a terrific run and perhaps will for the foreseeable future. What people don’t take time to consider, however, is the regular, every day companies that can do just as well.

Let’s look at a few below, and I’ll start with the U.S. tech that has received a lot of coverage this year:

YTD Total Return (Jan 1 - Nov 29th):

Nvidia 187.07%

META 66.28%

Tesla 38.94%

Amazon 38.66%

Apple 28.38%

Google 22.45%

Microsoft 15.01%

Not bad at all, with Nvidia clearly having a fantastic year.

But how do those compare with some of the boring companies up here in the North? Take a look:

CES Solutions 183.43%

Aecon 121.84%

Manulife 60.38%

Extendicare 54.04%

Peyto Exploration 48.17%

Royal Bank 35.69%

Arc Resources 34.35%

Enbridge 32.82%

Bank of Nova Scotia 32.78%

There are countless others that could be added to both the U.S. and Canadian lists, the point is, many people focus only on the stocks that are continually being pumped by the media but there are so many others that if purchased at the right time can do remarkably well for you. It’s finding the stocks that are downtrodden, that is the key.