We asked our contributors to pick their favorite Canadian stocks to buy this month. Here are their top ideas.
Telus is one of the leading Canadian telecommunications companies, operating in a virtual oligopoly with its two main competitors. The company has more than 13 million customers across its mobile, landline, high-speed internet and television services.
Telus managed to grow the mobile customer base faster than any of its main competitors over past few years and consistently maintains the highest average revenue per user among the main mobile service providers. The company has an excellent track record in terms of profit growth and cash flow generation which has supported a consistent and growing dividend payment over time.
Over the past few years Telus invested heavily in new spectrum licenses and technology infrastructure placing it in an ideal position to compete profitably for the foreseeable future. The business has a strong Canadian franchise, a well-regarded management team, and is reasonably valued when the above-average growth prospects are taken into account.
Fool contributor Deon Vernooy holds a position in Telus
Nelson Smith: BlackBerry (TSX:BB)(NASDAQ:BBRY)
It’s been a good year for BlackBerry so far in 2014, as the stock has gone up more than 40%. I think it still has room to run, since it got so beat up after the Fairfax Financial buyout failed.
BlackBerry is coming out with a new phone, the Q20, that is going back to the QWERTY keyboard. Hardcore BlackBerry addicts seem pleased with the decision. The company also announced a new phone for sale in Indonesia, the Z3, at a price point of under $200 without subsidies. The company knows emerging markets are key growth areas going forward, since most consumers in those markets can’t afford a high-end smartphone.
Add in the company usurping Microsoft and getting the contract to supply sync features in Ford vehicles going forward, and investors have the potential for a stock that could easily surpass low expectations.
Fool contributor Nelson Smith owns shares in Blackberry.
Karen Thomas: Ballard Power (TSX:BLD)(NASDAQ:BLDP)
Most of us remember Ballard Power from the early 2000s. There was plenty of optimism for the company and its fuel cell technology and the stock more than reflected that. The stock soared to highs in the $150 range and subsequently was beaten down to single-digit levels.
While the company’s markets are still in the early stages, I am becoming more and more optimistic about its prospects. The company’s balance sheet is strong, revenues are increasing in the 30-40% range, and we are seeing an increasing acceptance of its products and technologies.
In 2014, management expects to achieve break-even EBITDA, which is a significant improvement from prior years. Momentum is strong and if this momentum continues, the company could be on the road to positive earnings sooner than the market is anticipating. I believe that the company’s risk reward profile is increasingly attractive.
Fool contributor Karen Thomas owns shares of Ballard Power.
Like fellow writer Deon Vernooy, I believe Telus has room to move higher. In addition, Telus is appealing to income investors. It is targeting two dividend increases annually, which will amount to a 10% increase annually to 2016.
Even with dividend increases, Telus is spending to grow. It spent $1.14 billion at the 700Mhz spectrum auction (Rogers spent $3.29 billion). The added spectrum will help Telus improve LTE coverage for its customers. It also plans to buy back 5.33 million shares. With the firm committed to maximizing shareholder value, Telus should perform well for investors over the long term.
Fool contributor Chris Lau does not own shares in any of the companies mentioned.
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