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During Volatility, Focus on Buying These Quality Stocks – The Motley Fool Canada

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If you went all-in on stocks a week ago, you are probably feeling pretty good right about now. The governments are bailing everyone out so no one feels any pain. Bad companies are being supported. Highly levered individuals are going to get money, so they can keep making irresponsible decisions. The perpetual motion machine of debt keeps going.

So, what is the end game in all this? Is this the new normal? Should we just expect this level of volatility going forward? After all, the volatility comes from our massive debt loads and the vulnerability that puts into the system. If it wasn’t the virus, it would have been something else that set off this volatility.

This is the exact reason why you want to take advantage of these times of chaos to buy shares in solid, dividend-paying companies. Solid companies, preferably with predictable earnings growth, let you ride out these storms with relative comfort. 

Two core companies

With the market shooting up as it is at the time of this writing, it is harder to recommend TD Bank (TSX:TD)(NYSE:TD) and Fortis (TSX:FTS)(NYSE:FTS). They were such compelling buys a few days ago and are much less so today. This is not a function of the companies themselves, but rather is a reflection of the higher valuations they are commanding after only a few volatile days of upward movement.

Nevertheless, even at these levels, both Fortis and TD are still definitely worth buying if you have not yet added them to your portfolios. Both have very attractive dividend yields, with Fortis’s yield at 3.85% and TD’s still at just over 5% at the time of this writing. If you can lock them in at these yields, you are still getting decent income from these stocks.

There is also the possibility of dividend growth ahead in the future. In the case of Fortis, the company has maintained a solid upper-single-digit growth rate in its payout for decades. The growth is supported by its regulated utility businesses. These give clear visibility for upcoming increases.

TD is slightly riskier in that it is more likely to be impacted by a global economic slowdown than Fortis, but it is still quite solid. The yield has grown at a steady clip for many years. Just a month ago, the bank raised its payout by 7%, adding to a long streak of dividend increases.

Although both the United States and Canada are both impacted by the fallout from the coronavirus, the fact that these companies are diversified across both regions is still beneficial. They both get a portion of their earnings in the form of U.S. dollars, so they are able to benefit from the strong currency when the earnings are converted back in Canadian dollars.

It is also possible that one country may be more heavily impacted by the virus. The geographic diversification may mean that their earnings from one area may be more accretive than earnings from another.

The bottom line

It can be nerve-wracking to watch your portfolio dip precipitously during times of stress. No one is immune to the ups and downs of the market. Even the solid dividend payers, as we have seen during this crisis, can get cut in half in a heartbeat. The key is to know why you own something and to be resolute to stick with it when times get tough.

Companies like Fortis and TD are stocks you should have as a key component of your Canadian dividend portfolio. These are steady businesses with long histories of quality operations, dividend payments, and growth. There are not many excellent times to buy stocks like these, so take advantage of them when the opportunity arises.

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Fool contributor Kris Knutson owns shares of FORTIS INC and TORONTO-DOMINION BANK.

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Canada halts Ukraine puppy imports; New rules against vaping ads: CBC's Marketplace Cheat Sheet – CBC.ca

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Miss something this week? Don’t panic. CBC’s Marketplace rounds up the consumer and health news you need.

Want this in your inbox? Get the Marketplace newsletter every Friday.

Canada puts temporary halt on puppies from Ukraine

Canadian officials are temporarily halting the importation of puppies from Ukraine after more than 500 dogs were found crammed on a plane last month, and dozens died. But animal welfare advocates say the change isn’t expected to put an end to the international puppy trade targeting Canadians.

Marketplace‘s David Common reports. 

Canadian officials are temporarily halting the importation of puppies from Ukraine after hundreds of dogs were found crammed on a plane last month and dozens died. But the change isn’t expected to put an end to the international puppy trade targeting Canadians. 1:47

Health Canada ban on vaping ads to take effect in August

In the wake of mounting research suggesting that vaping use is on the rise among teenagers, Health Canada is prohibiting advertisements for vapes in areas where youth may be exposed to them. The ban applies to all retail locations and online stores that sell e-cigarettes, except for adult-only establishments. Read more about the changes.

E-cigarette advertising hangs above candy at a convenience store in Toronto in August 2019. (Craig Chivers/CBC)

Fashion retailers scrambling during the pandemic. Here’s what they’re doing to survive

It’s no secret that malls and department stores have been struggling over the last few months, but some businesses may be more poised to weather the storm than others. Larry Rosen, the CEO of Harry Rosen, says his company is surviving by taking advantage of federal support programs and shoring up its liquidity, but that competitors who came into the crisis with a lot of debt are already at risk. Read more about how companies are trying to fight back.

Total retail apparel sales will decrease 28 to 32 per cent in 2020, while luxury apparel sales should drop 16.8 per cent, says Trendex, a marketing intelligence company specializing in the Canadian and Mexican apparel markets. (Nathan Denette/Canadian Press)

The pandemic isn’t over. But for Maple Leaf Foods workers, the extra pay is

Maple Leaf Foods is no longer paying employees an extra $2 an hour for working during COVID-19.

That’s drawing criticism from employees at the company’s plant in Hamilton who say if the risk of working hasn’t subsided, neither should the pay.

“At the start, they gave us T-shirts that said ‘Not all heroes wear capes’ and we really loved those shirts. When we got them we felt, ‘OK, they really appreciate us,'” says Chris Bernard, the chief union steward at the plant. 

“Now it just doesn’t feel like we’re heroes anymore. They’re saying we’re not worth [an extra] $2 an hour.” Read more about the Maple Leaf Foods workers speaking out.

Maple Leaf Foods ended its pandemic pay bonus this month. (CBC)

What else is going on?

Uber is getting into the grocery delivery business in Canada
The program will be piloted in Toronto and Montreal.

DavidsTea to ‘significantly reduce’ number of stores and shift to online selling
The company is restructuring under the Companies’ Creditors Arrangement Act, which covers insolvent companies.

Riveted Mesh Floor Lamp recalled due to risk of fire hazard
Certain models of this lamp, sold at Restoration Hardware may overheat, posing a fire risk.

Daiya brand Classic Vanilla Creme Non-Dairy Frozen Dessert recalled due to undeclared milk
People with an allergy or aversion to milk should not consume the product.

Marketplace needs your help 

Many of us are looking to get our driveways freshly paved this summer, but not all contractors are created equal. Have you ever had a negative experience with a paving contractor? Or have they taken your money without finishing the job? Email us at marketplace@cbc.ca

Has your computer conked out? Is your phone on the fritz? We want to hear from you! Technology is keeping us connected like never before, but what happens when these devices break? What did you do? Tell us about your broken tablets, computers and phones by emailing caitlin.taylor@cbc.ca

Catch up on past episodes of Marketplace any time on CBC Gem.

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Tesla Model Y Price Drops — New Cost of Ownership vs. Lexus RX – CleanTechnica

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July 11th, 2020 by  


Tesla has dropped the price of the Model Y by a few thousand dollars, with the starting price now at $49,990*. Meanwhile, the Performance trim is down to $59,990 and has more features included by default as well as 11 miles more range.

$50,000 is a lot of money for a vehicle (unless you’re rich enough that it’s not), but what’s most notable with the Model Y is how much better it is than anything else in its class with regards to performance (both its 0–60 mph time or 0–30 mph time and its handling), infotainment (Tesla’s infotainment system is second to none, and it’s not even close), driver-assist features (Tesla Autopilot is second to none, and it’s not even close), and cost of operation.

This Model Y price drop provides an opportunity to get to something I haven’t done yet — cost of ownership analyses for the Model Y compared to its closest competitors (even though, as I noted above, there really are no close competitors on the market right now).

To start with, here’s a look at 5-year cost of ownership forecasts for the Tesla Model Y versus the Lexus RX:

As always, assumptions are a big deal in a cost of ownership analysis. People have widely different lifestyles and prices of several inputs vary by region. Furthermore, you may have a different estimate of what you expect in the next 5 years with regards to gas prices, your personal electricity/charging prices, the resale values of these SUVs, and maintenance costs. As always, I encourage you to steal my sheet (copy it) and put in the numbers that fit best for your life and your expectations about the future.

According to my best guess on some averages, the Tesla Model Y Long Range is absurdly cheaper than the Lexus RX and even the Model Y Performance is cheaper — despite having more cargo capacity, better acceleration, a better passenger experience, better infotainment, and greater safety. Why would anyone buy a new Lexus RX in 2020? I have no clue. Actually, I take that back — people still buy this and other models because of inertia. Most people have never sat in a Tesla. Most people have never driven a Tesla. Most people have never compared the specs and costs of a Tesla Model Y and a Lexus RX. They go back to Lexus because they’re familiar with Lexus. They have a notion in their heads about Lexus being a great brand that they acquired years ago, without the taste of Tesla to put it in context. Now, as for anyone who goes and test drives a Tesla Model Y and a Lexus RX and chooses a Lexus RX — that person, if they exist, baffles me.

As a final note, keep in mind that Tesla still isn’t selling the lowest cost version of the Model Y, the Model Y Standard Range Plus, which may start around $40,000 once available. Ooo, baby!

Related stories:

*Interestingly, I think it’s worth noting finally that someone got a hold of CEO Elon Musk at some point and made him change his policy on pricing. He used to prefer rounding the price up or down to the closest thousand or at least even hundred, and noted at least once that he found pricing like this annoying. I agree — just make the price an even $50,000. Though, dropping $10 off the price somehow moves minds — everyone knows it, but it still works — and sometime back Tesla decided to play the game and do pricing like $49,990. Frankly, perhaps more than anything else, this makes me think that even Tesla gets concerned about demand to some degree. Dropping the price by $3,000 passes along the same implication.

Want to buy a Tesla Model 3, Y, S, or X? Feel free to use my referral code to get some free Supercharging miles with your purchase: https://ts.la/zachary63404. No pressure. You can also get a $250 discount on Tesla solar with that code. 


 

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About the Author

is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao.

Zach has long-term investments in Tesla [TSLA] — after years of covering solar and EVs, he simply has a lot of faith in this company and feels like it is a good cleantech company to invest in. But he does not offer (explicitly or implicitly) investment advice of any sort on Tesla or any other company.



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China Moly strikes $550m precious metal deal with Elliott-backed miner – Financial Times

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China Molybdenum Co has sold the rights to future gold and silver production from its Northparkes mine in Australia to a company backed by US hedge fund Elliott Management.

Under the deal announced on Sunday, CMOC, which is listed in Shanghai and Hong Kong, will receive $550m in cash upfront from Triple Flag Precious Metals Corp plus ongoing payments in return for gold and silver output from the mine.

The agreement between CMOC, which has a market value of $12bn, and Triple Flag is the first so-called streaming transaction involving a Chinese mining company.

Royalty and streaming transactions — acquiring long-term rights to buy metal from mines in return for an upfront payment — have become big business in recent years. Companies active in the space include Franco-Nevada, Wheaton Precious Metals, Royal Gold and Triple Flag.

Many big streaming and royalty deals were announced during the commodity prices crash of 2014 to 2016 as cash-strapped miners rushed to bolster their balance sheets and reduce debt. 

While the mining industry is in much better financial shape today, bankers still expect a steady flow of royalty and streaming deals this year as the relative value of gold to copper provides an opportunity to tap into a fresh form of financing.

“This transaction provides CMOC with a long-term financing arrangement at a compelling cost of capital and demonstrates significant value from the gold and silver byproduct production from Northparkes,” said CMOC executive Li Chaochun. “Additionally, CMOC maintains its core exposure to copper production in alignment with our future plans for the mine.”

Gold has been one of the best performing assets in 2020, rising almost 20 per cent to a nine-year high of more than $1,800 an ounce, while copper is up just 3.5 per cent.

In a recent interview with Bloomberg, David Harquail, the chief executive of Franco-Nevada said there was a large number of base-metal companies considering selling big precious-metal streams from their assets.

Located 380km west of Sydney, Northparkes is an underground copper mine that also produces gold and silver as a byproduct. Last year, it churned out 36,000 tonnes of copper, 25,000 ounces of gold and 308,000 ounce of silver.

Toronto-based Triple Flag is run by Shaun Usmar, the former chief financial officer of Barrick Gold. It was founded four years ago with financial backing from Elliott and now has 40 assets in its portfolio.

The deal with CMOC is its biggest to date and the ninth-largest in the history of the streaming industry. The support of Elliott has allowed the company to write large cheques for big streaming deals.

CMOC has been one of the most acquisitive Chinese mining companies. In 2016 it paid $2.65bn for Tenke Fungurume, the giant copper and cobalt mine in the Democratic Republic of Congo, and spent $1.5bn to purchase Anglo American’s niobium and phosphate mines in Brazil.

It purchased an 80 per cent stake in Northparkes, a fully mechanised, underground mine, from Rio Tinto in 2013 for $830m. The rest of the mine is owned by Sumitomo Metal Mining.

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