Optimism #45

Hello clients and friends,

There is a good article this morning’s Globe and Mail about our Canadian banks being undervalued and likely to increase dividends again during this calendar year. See attached.

These undervalued Canadian bank stocks are most likely to raise dividends - The Globe and Mail

BMO’s top analyst Brian Belski is Optimistic about stocks

Why I'm still bullish on stocks: BMO's Brian Belski (msn.com)

I just paid my beloved Fortis $152.23 for $43.41 of natural gas.  I suspect that ‘business as usual’ is good and we will continue to see dividend increases.  Remarkably we are still getting the better end of the deal.  I should not complain. Since October of 2018 the stock is up 71.4% including dividends.

If you spend more than a few months in the US each year, you may be required to complete and submit an 8840 form, to confirm that you are not deemed a Resident of the US for income tax purposes.  Form deadline is June 15th.  There is a complicated formula, but you should be on this if you spend more than about 120 days per year, including quick trips across the border for gas and beer.  Here is a link to the fillable form:

2021 Form 8840 (irs.gov)

If this stock market correction is average it will bottom on October 19th 

For those of you that have seen portfolios dip due to bond holdings, things seem to be getting better and that may continue.

GRAPHIC-Four reasons why the bond market rout may be over | Nasdaq


Ed called wanting to chat, but understanding that given the meltdown in growth stocks, that my phone must be ringing off the hook and I was too busy.  I told him that actually, none of you called.  That’s wonderful. I don’t think he believes me.

Some friends of mine were just in Tahiti.  The cost of fuel at the pump was 6,490 SPX (South Pacific Francs) or nearly 8$ Canadian a litre. 

Insiders are buying at Whitecap resources, Cenovus Energy, PrairieSky Royalties, Shopify, Richelieu Hardware, Westshore Terminals, Northwest Company, CN Rail.  There is only one reason.

Dividend increases continue:  Crescent Point Energy (+40%), Suncor (12+) Barrick Gold (performance dividend – temporary increase of 100%), Telus (+7%), Sun Life 4.5%, Algonquin Power +6%, Loblaw (+11%), Western Forest Products (+25%), Canadian Tire (+25%) (which owns Mark’s Work Warehouse, Sport Chek and a number of other brands)

CIBC shares split today, 2 for 1.  It’s fun to have more shares but we are no richer.  Its like having a pizza and cutting into 16 pieces instead of eight.  Dividends are split as well.  The price fell in half so your accounts will temporarily be lower, until they add the shares, which they promise will be by May 18th.

In an effort to reduce emissions, Facebook, now called Meta, has entered into a long-term agreement to buy clean electricity from Algonquin Power and TransAlta (from their Oklahoma based wind farm), both Canadian Utilities. Further, Amazon is building a cloud computing hub in Calgary, including an agreement to source power from a solar farm in Alberta.  Good for the environment and for our utility stocks.

If you are planning buy anything in a larger amount of US dollars, consider waiting a bit if you can. Our dollar is expected to rise soon and considerably.

David Rosenberg: The Canadian dollar is seriously undervalued and poised to surge to this level - The Globe and Mail

I follow someone on Twitter called Dividend Growth Investor.  He/ she said …

“I boarded a plane and the Pilot announced that this would be his last flight.  Since learning to invest in dividend growth stocks, he has completely replaced his income and is retiring once we land in Hawaii.  Everyone clapped.”

If you have any questions on this stuff, I am always here to discuss. Have a super week.