Is there something magical about the Tax-Free Savings Account (TFSA)? The framers of this investment vehicle believe so, but only account users can weave the magic. The TFSA magic stems from its tax-free money growth feature, which, when compounded over time, makes the account balance substantial.
TFSA users can make sleek moves with $7,000, the new and increased annual limit in 2024. The magic works in a user’s favour with the right type of stocks. However, you must pick safer dividend stocks to achieve financial success and avoid permanent losses.
Iconic name
Manulife Financial (TSX:MFC) is an insurance icon and a household name in Canada, the U.S., Asia, and other markets where it operates. The $43.83 billion financial services company has rewarded investors with nine consecutive years of dividend hikes.
At $32.98 per share, current investors are up 14.03% year-to-date and feast on the 4.87% dividend yield. According to its president and chief executive officer (CEO), Roy Gori, 2023 was a milestone year for Manulife as its transformation journey continues. The evidence is the core earnings growth across all segments, not to mention the double-digit increases in all new business metrics.
In the 12 months ending December 31, 2023, core earnings rose 13% to $6.68 billion versus 2022. Notably, net income reached $5.1 billion compared to the $1.93 billion net loss a year ago. In the fourth quarter (Q4) of 2023, core earnings and net income climbed 15% and 81% to $1.77 billion and $1.66 billion, respectively.
Gori added that the fourth-quarter and full-year results indicate that Manulife delivered despite uncertain market conditions and has positive momentum to start 2024. Manulife’s chief financial officer, Colin Simpson, said the insurer complemented the $1.6 billion share buyback with a 9.6% increase in the common share dividend.
The latest good news is the opportunity to offload some of its less-profitable assets. On March 26, 2024, Manulife announced agreeing and signing a US$4.3 billion reinsurance deal with RGA Life Reinsurance Company. This transaction should improve overall profitability and generate $800 million in capital that Manulife can use for its share buyback program. It is expected to be completed in Q2 2024.
Cutting risk in its insurance portfolio and focusing on profitable growth areas is an ongoing concern. Gori said Manulife is exploring additional organic and inorganic actions to deliver shareholder value.
Robust growth and profitability
Bird Construction (TSX:BDT) continues to outperform and impress investors. At $18.49 per share, the market-beating year-to-date return is 28.97%. If you invest today, the dividend offer is a decent 3.03% dividend. The $996.5 million construction and maintenance company’s strong financial performance is reflected in the stock’s performance.
In 2023, construction revenue and net income rose 18.1% and 43.5% year over year to $2.79 billion and $71.54 million. In Q4 2023, net income soared nearly 85% to $23.88 million versus Q4 2022. Bird Construction’s president and CEO, Teri McKibbon, said the quarterly and full-year results showed robust growth and profitability.
McKibbon is confident that Bird Construction is well-positioned for the future owing to a strong balance sheet. Moreover, generating positive cash flows will enable investments in profitable organic growth and pursue accretive acquisitions.
More powerful
TFSA users shouldn’t underestimate the new $7,000 contribution room. The tax-advantaged investment account is more potent in 2024 because of the $500 enhancement from last year.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
