We asked our Foolish writers for their top ideas for September. Here are their picks:
Chris MacDonald: Manulife
My top stock for September is Manulife (TSX:MFC)(NYSE:MFC). This top insurance player is among the biggest players in Canada, with a growing market share in key growth markets abroad, particularly China.
Given a resurgence in higher bond yields, the longer-term earnings prospects of Manulife have improved. This insurance player currently trades at a significant discount to peers in the financials space, providing great value for long-term investors.
As far as top value stocks with excellent leverage to the pandemic recovery, Manulife remains a top pick of mine. This is a stock I think has tremendous value in September and beyond.
Fool contributor Chris MacDonald has no position in any of the stocks mentioned.
The economic recovery may be slow, but it’s there. NorthWest Healthcare Properties REIT (TSX:NWH.UN) continues to run strong. The company saw revenue skyrocket during the pandemic, as one of the very few real estate investment trusts (REITs) that provided essential services. NorthWest then used the low interest rate environment to renew lease agreements and bring in new properties — even an Australian healthcare REIT!
Yet despite this and its dividend yield of 6.16%, shares are only up 7% year to date, and it continues trade at a P/E ratio of 9.28. Given that healthcare REITS are immune to global inflation, that makes them in high demand moving forward. And NorthWest currently boasts a global 97% occupancy rate with a 14.3 year average lease agreement! So, while investors may have to be patient for share growth, it won’t be for long. Meanwhile, you can bring in this solid dividend yield for guaranteed passive income.
My top stock for September is Suncor Energy(TSX:SU)(NYSE:SU). Shares of this Canadian energy heavyweight had dropped 7.6% month over month as of close on August 26. However, it has delivered much-improved earnings in 2021. The rise of the Delta variant remains a concern when it comes to demand, but I’m bullish on the energy sector going forward.
Suncor posted a profit of $868 million in Q2 2021. Meanwhile, its production enjoyed a significant uptick, even in the face of planned maintenance. This stock last had a price-to-earnings ratio of 23, putting it in solid value territory relative to its industry peers. It offers a quarterly dividend of $0.21 per share, representing a 3.5% yield. I’m looking to snatch up this super energy stock on the dip before the summer ends.
Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned.
Nicholas Dobroruka: goeasy
My top stock for the month of September is goeasy(TSX:GSY).
This $3 billion company might be one of the best-kept secrets on the TSX. Shares are up close to 100% year to date and more than 800% over the past five years.
Some investors may be hesitant to buy during such a strong bull run, but I’m as bullish as ever on goeasy. The reopening of the country could send the growth stock surging even higher over the next couple of months.
goeasy is a consumer-facing financial services company. It provides Canadians with all types of home, auto, and personal loans. So, if consumer spending begins to rise as the country slowly reopens, I think it’s a safe bet to say that goeasy revenue will be rising too.
The best part is, goeasy stock is trading at a discount compared to many other Canadian growth stocks right now. Shares are trading at a bargain price of a forward price-to-earnings ratio of just 15.
Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned.
Jed Lloren: Nuvei
My top stock for September is Nuvei(TSX:NVEI). This is a stock that has intrigued me since its IPO. Of all the industries to invest in, I am most fascinated by the potential growth of the e-commerce industry. While Nuvei doesn’t operate in that industry per se, it is highly exposed to it due to its business as a payment processor. As more retail spending continues to flow into these online streams, Nuvei is poised to benefit.
In its latest earnings presentation, the company reported that its total volume processed in Q2 2021 was 146% greater than its processed volume in Q2 2020. This translated into a 114% year-over-year increase in Nuvei’s quarterly revenue. Already present in 200 global markets, Nuvei is well positioned for continued growth in the future.
Fool contributor Jed Lloren has no position in any of the stocks mentioned.
Robin Brown: Sangoma Technologies
Sangoma Technologies(TSXV:STC) is a one-stop shop for unified communications-as-a-service solutions across the world. This stock has pulled back 38% from highs set earlier this year.
Yet this company is in excellent shape. It just acquired a similar-sized peer in the United States. This should significantly broaden its cloud services platform. Likewise, Sangoma expects to see higher gross margins and expanded recurring revenues (over 70%).
The company expects to grow revenues and EBITDA in fiscal 2021 by 26% and 40%, respectively. Despite strong growth and profitability, this stock trades at fraction of larger, unprofitable peers. Hence, this stock could enjoy the double-edged combination of rising earnings and higher valuation multiples in years to come.
Fool contributor Robin Brown owns shares of Sangoma Technologies.
Kay Ng: Canadian Net REIT
Nothing beats having the reassurance of earning safe passive income every month. Canadian Net REIT (TSXV:NET.UN) is a Canadian Dividend Aristocrat with a track record of cash distribution increases.
Recently, it had shown signs of accelerated dividend growth. Its five-year dividend-growth rate is 13%, including this year’s cash distribution hike of 17%.
Canadian Net REIT maintains a high occupancy rate of 99%. It has benefited from a low interest rate environment. Last quarter, its weighted average interest rate on fixed loans and mortgages was 3.4% versus 3.7% a year ago.
It’s still a small REIT with $232 million of assets and lots of room to grow. With a safe yield of about 3.9%, the undervalued monthly dividend stock is a great buy for passive income in a TFSA.
Fool contributor Kay Ng owns shares of Canadian Net REIT.
Stephanie Bedard-Chateauneuf: Spin Master
Spin Master (TSX:TOY) is my top TSX stock for September.
The toymaker posted higher earnings for its most recent quarter, as revenue climbed 39% on better-selling products from Paw Patrol, Gabby’s Dollhouse, and Present Pets as well as strong revenues for its digital games.
The Toronto-based company reported a net profit of US$33.5 million (US$0.32 per share) for the quarter ended June 30 compared with a net loss of US$14.9 million (US$0.15 per share) in the prior-year quarter.
According to Spin Master’s president and CEO Max Rangel, the company is well positioned for the second half of 2021, with a strong toy lineup, growth in its digital game franchises, and the release of the movie Paw Patrol: The Movie. Spin Master’s first foray into the film business is expected to boost toy sales as well as licensing and merchandising revenue.
Fool contributor Stephanie Bedard-Chateauneuf has no position in any of the stocks mentioned.
Puja Tayal: Suncor Energy
My top TSX stock pick for September is Suncor Energy (TSX:SU)(NYSE:SU). This stock has dipped 22% since July 5, as rising Delta variant cases created hiccups in the global recovery. Moreover, a decline in oil price and production issues at Suncor’s Fort Hills oil sands mine put downward pressure on the stock.
But these are temporary issues. There is pent-up demand for travel, and it is reflected in Suncor’s second-quarter earnings. As the fourth wave eases, the recovery could return. Suncor stock could recoup the two-month loss and surge more than 20% back to the July level of over $30.
Fool contributor Puja Tayal has no position in any of the stocks mentioned.
Vineet Kulkarni: Canadian Natural Resources
Shares of Canadian Natural Resources(TSX:CNQ)(NYSE:CNQ), Canada’s biggest energy company by market cap, have been on a downtrend for the last few months. Fears of reopening delays weighed on energy commodities and on CNQ stock as well. However, this could be a valuable opportunity for discerning investors.
Canadian Natural will likely see stellar earnings growth in the second half of 2021, driven by higher production and higher oil prices as against last year. Moreover, its lower breakeven costs allows huge free cash flow growth even at current oil prices. So, once the Delta variant fears subside, CNQ stock should resume its upward climb.
Apart from its superior capital gain prospects, CNQ offers a juicy yield of nearly 5%. Investors can expect consistent dividend growth from the energy giant driven by its robust balance sheet and strong financial growth.
Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned.
Demetris Afxentiou: Fortis
The growing need to diversify your portfolio to counter volatility has never been greater. That’s just one reason why my pick for this month is Fortis(TSX:FTS)(NYSE:FTS).
Fortis is one of the most defensive picks on the market. In terms of size, the utility behemoth is one of the largest on the continent, with operations across 10 different operating regions. Fortis also boasts over 3.4 million utility customers across both electric and gas segments. If that weren’t enough, keep in mind that utilities generate a stable revenue stream backed by long-term regulated contracts.
Fortis’s immense size coupled with a very reliable and stable business model make it a great defensive pick in an increasingly volatile market.
Adding to that appeal is Fortis’s dividend. The current yield works out to a juicy 3.52%. Even better, Fortis has provided investors with annual bumps to that dividend for over 47 consecutive years. The company is also extending that guidance through 2025, making Fortis a perfect defensive option (and a future Dividend King) for your portfolio.
Fool contributor Demetris Afxentiou owns shares of Fortis.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
