Let the good times roll!
The S&P/TSX Composite Index (TSX:^OSPTX) continued its month-long winning streak last week with the equity gauge nearing a three-year high. However, there were a number of important corporate reports for investors to shift through as well. Here are the top five can’t-miss headlines from the past week.
1. BlackBerry signals shift to enterprise
Shares of BlackBerry (TSX:BB)(NYSE:BBRY) rallied this week, up almost 8%, after a series of interesting product announcements.
New Chief Executive John Chen unveiled several new initiatives at the Mobile World Congress in Barcelona including a new Q20 model that brings back its “classic” keyboard and a cheaper Z3 BlackBerry that will cost under US$200. The company is also releasing BBM for enterprise users and revamping its BlackBerry Enterprise Server. These new initiatives suggest that Mr. Chen’s focus is squarely on the corporate client.
Ford Motor also admitted that it will be looking at switching the operating system for its vehicle infotainment systems from Microsoft’s Sync to BlackBerry’s QNX. And while this is far from a done deal yet, the possibility of finding QNX in every new vehicle from America’s second largest automaker is an exciting prospect.
2. Is this company the next Johnson & Johnson?
Valeant Pharmaceuticals (TSX:VRX)(NYSE:VRX) has returned to profitability and more than doubled its revenues.
Thanks in large part to the acquisition of contact lens maker Bausch + Lomb Holdings, Canada’s largest publicly traded drug company reported fourth-quarter revenue reached $2.1 billion, up 109% year-over-year. Net income came in at $124 million or $0.36 per share, compared with a loss of $89.1 million or $0.29 during the same period last year.
Valeant has grown quickly over the past several years through acquisitions. Buying small drug makers and pushing new products through the company’s large distribution network has proven to be an incredibly profitable business model.
In January, executives even predicted that the firm would join the world’s top five pharmaceutical companies by market capitalization by the end of 2016. After these recent quarterly results, that goal seems attainable.
3. Obama sets deadline for Keystone decision
U.S. President Barack Obama has signalled he will make a decision on TransCanada’s (TSX:TRP)(NYSE:TRP) controversial Keystone XL pipeline before the summer.
During a meeting on Monday between the president and several governors at the White House, Mr. Obama indicated a decision would be made on the project once his aides have had an opportunity to review the State Department’s environmental assessment. The signal is dampening concerns the administration will delay the controversial decision until after mid-term congressional elections in the fall.
A resolution to this issue will be a relief, not just for TransCanada shareholders, but the entire oil sands industry.
4. Tim Hortons eyeing expansion
Tim Hortons (TSX:THI)(NYSE:THI) has its eyes set on expansion.
At the company’s annual investor conference, management said that it will focus on defending its turf in Canada from new rivals like McDonald’s and Starbucks and called the United States a ‘must-win battle’. During the presentation executives announced plans to open 800 restaurants in North America and 220 in the Middle East over the next five years.
Some investors may want to question the wisdom of this strategy. With a coffee shop on every corner of North American cities, how many more do we need? And with margins in the sector beginning to decline, it’s becoming apparent that the industry is saturated. Perhaps shareholders would be better off if that growth capital was simply returned to them in the form of dividends and share buybacks.
5. Banks deliver another round of dividend hikes
Canada’s banking industry continues to pile on the profits.
Amid signs of a cooling Canadian economy, the country’s largest lenders are reporting stellar results. And shareholders get to share in the industry’s success with another round of dividend hikes.
Royal Bank of Canada (TSX:RY)(NYSE:RY) says its first-quarter net income was $2.09 billion, up $45 million or 2% year-over-year. Excluding some items, RBC’s adjusted diluted earnings per share was $1.47, which was above the general analyst estimate. And as a parting gift to shareholders, exiting Chief Executive Gord Nixon also announced its quarterly dividend will increase by 6% to $0.71 cents per share.
Surprising investors, TD Bank (TSX:TD)(NYSE:TD) and CIBC (TSX:CM)(NYSE:CM) also raised their quarterly payouts by a hearty 8.5% and 2.1% respectively.
