As you might have noticed most of the stocks I follow are higher dividend stocks, frankly because as a retired person I look for safe solid companies to pay out money regularly. This post will include one stock that is not a high payer, but should be on your radar if you are a younger investor. I will also use this post to concentrate on Canadian stocks, which I believe offer some excellent opportunities for long term safety and income. If you own a portfolio of stocks, having Canadian securities in that portfolio provides you with a safer currency than the US and frankly sounder overall banking practices.
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I would like to pass on what I believe to be the best stock long term investment opportunity you will find in the next ten years. The company is a spin off of EnCana, a large Canadian energy producer. The company is Cenovus, symbol CVE, and it sits on top of what some say is the largest oil pool in the entire world. Yes you read that right, bigger than Saudi Arabia. CVE also pays almost about a 2.3% dividend so needless to say this company is not a start up operation. Why do I like this stock, because I believe that in 10 years the $30 stock price could likely be $150. Not including dividends, which will likely increase with the stock appreciation, that is a 500% increase in ten years! CVE is mainly a oil producer that has assets in the bitumen, that is deep oil in the oil sands of Canada. ( if you have concerns with investing what some consider to be environmentally unacceptable areas stop reading now ). The reasons this stock has such a strong upside potential follow. First off the oil in this area is just now starting to be drilled, Second the company is headed by a CEO that knows his stuff and has a history of finding value and pushing his company's stock price up. Third, you can still buy this company at a decent price, current trading around $34-$35 level. I would prefer to buy it under $30, but unless the world economy stops expanding the oil basin CVE is drilling will not get less valuable. Now it may take a while for other investors to find this security and for CVE to begin getting the resource to market, but I believe eventually they will and push the price up. If you buy you must be very patient. Lastly, this company is drilling for oil on land in a very stable country Canada. Canada, unlike the United States, is open to oil discovery and is getting the oil out to market making money for both the government via royalties and investors who own shares. The US gets most of it's oil from Canada, and not the Middle East, in case you did not know. Risks to this stock, include if the world economy does collapse and the price of oil plummets this high cost oil producer will not be able to profitability market oil. Buy CVE, put it away, and forget it for ten years. Great gift for your grandchildren.
Canada offers many opportunities for Canadian oil stock investing. A couple more names are Enerplus, pays about a 6.6% dividend. Enerplus is a solid company that will not appreciate much, but will pay you a MONTHLY dividend year after year. Another one is BTE, Baytex Energy, paying right at 5.0% monthly dividend as well. Again a solid company which just drills for oil and pays it's shareholders. These last two companies just converted from Royalty Trusts since a change in Canadian law back several years ago, when they were paying even higher dividends. They now have converted to corporations that look for some growth with good dividends as well.
BCE, Bell Canada, is the Ma Bell stock for Canada. This company serves the largest telecom customer base in Canada with wireline, wireless, and increasingly television reception. BCE is the steady eddie of stocks up north, solid share price, 5% plus dividend that just got a big bump earlier this year and will not keep you awake at night. Frankly few people know about BCE, because it is just so normal a operation that most analysts skip over it. Now you know.
Lastly, I want to mention another long term holding. TRP, Trans Canada pipelines. This company owns about the largest pipeline network in North America. They transport lots and lot or natural gas from west Canada to the eastern US and eastern Canada. Their payout is solid and growing. Presently they are in process of getting permits to extend a pipeline from mid continent US to the Texas Gulf area to transport the growing oil resources of west Canada to markets in the US and beyond. This is not a given as the current US administration is getting lots of pressure from people who do not want this pipeline built, so it no guarantee it will happen. If it does get built it will create lots of US jobs and profits for people here and obviously grow TRP profits as well. You can buy this one with the confidence the share price is solid and the dividend safe. Then if the pipeline does get built the capital gains could be very nice. One other note , if the US pipeline does not get approved, there is discussion the Chinese are going to step up and build a pipeline for the company to the Canadian west coast and ship the oil to China. So maybe this could be a no lose situation as a shareholder.
Do note all four of the securities mentioned above are at the high end of their stock prices due to the run up in oil prices, so it might be best to wait and see if the price of oil comes back some to buy. Also note most Canadian dividends are taxed in Canada at 15% before you get your payment, but that can be got back when you file your return here in the states.
The Kennedy family relies on oil trusts for a large portion of their income, so why not you?
I either hold all of the securities, except TRP and CVE, above long or in options.
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