3 Top Stocks in Manitoba

These three companies show that Manitoba has a lot to offer investors.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Everyone likes to support a hometown hero and Canada’s provinces boast many success stories. Today, we take a look at a few exciting opportunities based in Manitoba, because there’s more to the province than snow, pot holes, and mosquitoes.

Exchange Income Corporation

Don’t let the name fool you — Exchange Income (TSX: EIF) has nothing to do with the stock exchange, but does reap income. The company is divided into three segments. First off is its aviation division, comprised of Perimeter Aviation, Keewatin Air, Calm Air International, Bearskin Lake Air Service, Custom Helicopters, and Regional One.

Second is its specialty manufacturing division, which is made up of Jasper Tank, Overlanders Manufacturing, Water Blast Manufacturing, Stainless Fabrication, and WesTower Communications. Its final division is its infrastructure company WesTower, which installs and maintains telecommunication towers in Canada and the U.S.

This 10-year-old company run by former premier Gary Filmon, has seen its stock slip a bit due to the underperformance of its WesTower division. Yet Q1 revenue climbed to $257 million from $219 million in Q1 2013. EBITDA came in at $19 million, up from $17 million last year, while net income was a little sparse due to lower margins and higher costs in its WesTower division.

Despite hiccups in the past couple of quarters, the company offers a $1.68 annual dividend. The stock closed Wednesday at $21.93, well below its $26.00 average target price. The stock carries an “outperform” rating.

Manitoba Telecom Services

The once all-powerful Manitoba Telecom Services (TSX: MBT) still maintains a sizable market share in the province, though now its primary competitor is Shaw Communications (TSX: SJR.B)(NYSE: SJR), with the other telecoms claiming minor parts of the TV, internet, home phone, and (to a lesser degree) wireless market share.

Revenue in the previous quarter dropped by $7 million to $401 million during the same period last year. While revenue was down, EBITDA went the other way, earning $147 million ($0.54 per share), up from $128 million ($0.23 per share) during the same time last year. There is also an annual dividend of $1.70.

MTS has been quietly searching for a buyer for its business communications division Allstream. It had a previous bid of $520 million by an Egyptian company, but that was blocked by the government over “security concerns”. If or when Allstream is sold, analysts at RBC Dominion Securities believed last year that it could be the first step towards selling the entire company. If the federal government would allow such an amalgamation, potential buyers could be Telus (TSX: T)(NYSE: TU) or more likely, BCE (TSX: BCE)(NYSE: BCE).

New Flyer Industries

Our final company is Winnipeg-based bus manufacturer New Flyer Industries (TSX: NFI). As cities continue to attempt to be more “green,” investment in transit is usually a key part of the plan. New Flyer has been able to capitalize on this market by offering natural gas-powered and electric vehicles along with its conventional diesel platform. Case in point: New Flyer has recently received an order for 180 CNG buses from BC’s Translink, to be deployed in Metro Vancouver.

During the past quarter, New Flyer delivered 554 buses, up from 490 last year, translating into revenue of $323 million, up from $245 million in the previous year’s quarter. Despite increased income tax payments, net income came in at $5.5 million ($0.10 per share) up from $3.5 million ($0.08 per share) in Q1 2013. The annual dividend on this bus manufacturer is currently paying out $0.59, and carries a yield of 4.7%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any shares in the companies mentioned.

More on Investing

Profit dial turned up to maximum
Tech Stocks

$1,000 Invested in Constellation Software Stock Would Be Worth This Much Today

Constellation Software (TSX:CSU) is trading above $2,000 today. Why this stock is so expensive, and is it worth buying?

Read more »

Dividend Stocks

Passive Income: 3 Top Canadian Stocks to Buy for Monthly Dividends

Companies such as Pembina Pipeline and Killam Apartment REIT pay investors monthly dividends, making them top bets for income-seeking investors.

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Stocks for Beginners

TFSA Investors: Top TSX Stocks to Buy With $6,000

Here are two safe, dividend-paying TSX stocks for your long-term portfolio.

Read more »

Gold medal

3 Growth Stocks That Could Be Huge Winners in the Next Decade and Beyond

Are you looking for growth stocks that could be huge winners in the next decade? Here are three top picks!

Read more »

Retirees sip their morning coffee outside.

Retirees: How to Make Over $95/Week in Passive Income TAX FREE!

Canadian retirees who are hungry for passive income should look to snag stocks like Sienna Senior Living Inc. (TSX:SIA) in…

Read more »

Man holding magnifying glass over a document

Where to Invest $500 in the TSX Right Now

Given the massive correction, long-term investors can start buying stocks like Shopify and goeasy to outpace the broader markets by…

Read more »

Aircraft wing plane

Air Canada Stock Is a Fantastic Deal Right Now

Air Canada (TSX:AC) is a great stock to own, as market fear turns into hope amid falling recession fears.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern

Beginner Investors: Get Passive Income by Investing in REITs!

You can get passive income by investing in REITs like Northwest Healthcare Properties REIT (TSX:NWH.UN).

Read more »