One popular investing strategy is to buy companies when they set new multi-year or all-time highs.
Here are the reasons why I think investors who have a bit of cash on the sidelines should consider BCE Inc. (TSX:BCE)(NYSE:BCE), Fortis Inc. (TSX:FTS), and Metro Inc. (TSX:MRU) right now.
BCE Inc.
BCE’s stock recently blew through the $55 mark as it continues to hit new post-Nortel highs. In the past five years alone, the dividend has increased by 40% and the stock price has doubled.
BCE has been on a buying binge as it continues to fortify its dominant position in the Canadian communications industry. In 2013, BCE bought Astral Media. The deal added a wide variety of advertising and media assets, including Astral’s lucrative pay TV operations in Quebec.
In 2014, BCE took its Bell Aliant subsidiary private. The $4 billion deal means all of Bell Aliant’s revenue now goes into BCE’s coffers. This is great news for dividend investors, because Bell Aliant had one of the highest distributions in Canada.
BCE is also acquiring wireless retailer Glentel Inc. in a 50% joint deal with Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI).
As cash flow continues to grow, BCE’s share price and big dividend should track higher.
Fortis Inc.
Fortis is trading within spitting distance of the all-time high it hit in late November. The boring old electricity utility has been up to some exciting stuff.
Last year, Fortis spent $4.5 billion to buy UNS Energy, an Arizona-based power company. The deal will add significant cash flow starting this year and investors should see growth in the annual dividend increases.
Fortis pays a dividend of $1.36 per share that yields about 3.4%. The stock has increased more than 30% in the past 12 months.
Metro Inc.
If you are a resident of Quebec or Ontario, you probably shop at one of Metro’s stores. The company operates 800 grocery outlets and 250 drug stores in the two provinces.
Despite heavy competition, the company’s earnings continue to grow at a solid clip. In the current environment, Metro is a great pick. The stock has low volatility and operates in an industry that is almost recession-proof. Metro’s stock just hit an all-time high of $94 and the shares are up more than 140% in the last five years. The company increased the dividend by 20% in 2014.
Sometimes investors also get a chance to pick up great companies at heavily discounted prices. The following free report analyzes one such company.
