Three top stocks from Baskin Wealth’s Barry Schwartz

Barry Schwartz is chief investment officer at Baskin Wealth Management. His focus is North American large caps.

Top Picks:

Telus (T.TO)

After years of outperformance vs. Bell and Rogers, Telus’s stock has pulled back materially. We assume that investors are concerned about Telus’ exposure to energy-intensive provinces. It raised its dividend by 10 per cent in 2015, and we expect further increases in 2016.

Brookfield Infrastructure Partners (BIP_U.TO)

We expect 2016 to be a busy year for Brookfield Infrastructure. The volatility in the stock market, along with the drop in resource prices, should allow Brookfield to entertain many acquisition opportunities. Brookfield raised its distribution to its partners by 10 per cent in 2015, and we expect another 10-per-cent increase in 2016.

Cineplex (CGX.TO)

After a record-breaking year at the box office in 2015, pundits are predicting slightly weaker results in 2016. Cineplex can’t control the success of the movie releases, but it is working hard to diversify its revenue base. Recent investments in gaming should start to bear fruit by year-end. Cineplex raised its dividend by 4 per cent in 2015 and we expect another dividend increase in 2016.

Past Picks: January 12, 2015

Home Capital Group (HCG.TO)

Then: $41.64 Now: $27.77 -33.31% Total return: -31.69%

General Motors (GM.N)

Then: $35.84 Now: $29.02 -19.03% Total return: -15.70%

Brookfield Asset Management (BAMa.TO)

Stock Split – May 13, 2015 – 3 for 2

Then: $61.31 Now: $41.70 +2.02% Total return: +3.43%

Total Return Average: -14.65%

Market outlook:

We are also business analysts. We believe that successful investing requires us to understand what we buy for our clients on a fundamental level. We strive to find profitable companies with plenty of reinvestment opportunities, trading at reasonable valuations.We don’t find these companies by looking at charts, or by listening to what other brokers recommend. We do it the old-fashioned way – by reading financial statements, working with the numbers, and figuring out what a company is genuinely worth.

Too often, we are judged by the price changes of our clients’ holdings.We strive to guide our clients and others to base their judgments on the actual performance of those companies. As we have said, time and time again, increasing dividends is one of the best indicators of performance. When a company raises its dividend, it signals to investors that it has confidence in its business and in its ability to increase profits. Higher profits generally lead to higher stock prices. So buying and owning companies that raise dividends regularly is the best way to grow your portfolio over time.

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Friday, January 29th, 2016 EN

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