Top Stocks for January

Our top stocks for January include: Telus Corporation (TSX:T)(NYSE:TU), TransCanada Corporation (TSX:TRP) (NYSE:TRP), Dominion Diamond Corp. (TSX:DDC)(NYSE:DDC), and Uni-Select Inc. (TSX:UNS).

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Happy New Year! We asked our top investors for their favourite stocks for January. Here are their selections.

Demetris Afxentiou: Uni-Select Inc. (TSX:UNS)

Uni-Select Inc. (TSX:UNS) is the largest distributor of automotive parts, equipment and tools to the aftermarket. The company operates 13 distribution centers and over 200 stores, employing 2,400 people.

In the most recent quarter, Uni-Select reported earnings of US$276.2 million. The company is also one of the best performing stocks on the market for 2015, with the stock up an incredible 128.59% year-to-date.

As the loonie continues its well documented slide, manufacturing products from Canada become more attractive and affordable to markets abroad, and those exported goods become more affordable to consumers in the U.S. Uni-Select directly benefits from the weak loonie, and with no end in sight to the currency’s decline, Uni-Select will continue to reap the benefits well into 2016.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

Andrew Walker: TransCanada Corporation (TSX:TRP) (NYSE:TRP)

TransCanada Corporation (TSX:TRP)(NYSE:TRP) is growing its business despite challenges in the oil and gas markets.

President Obama’s rejection of Keystone XL is a setback for the company, but management still has $11 billion in other projects under development that will be completed and in service by 2018.

TransCanada is also winning new contracts in Mexico and recently purchased a gas-fired power plant in Pennsylvania that will immediately add cash flow to the business.

The 4.6% dividend looks safe and investors could see a nice rebound in the stock when energy prices recover.

Fool contributor Andrew Walker has no position in TransCanada Corporation.

Joseph Solitro: Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM)

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) is the fifth-largest bank in Canada, with approximately $463.3 billion in total assets, and it is my top stock pick for January for two reasons.

First, it is undervalued. It trades at just 9.8 times fiscal 2015’s adjusted earnings per share of $9.45, only 9.6 times 2016’s estimated earnings per share of $9.67, and a mere 9.3 times fiscal 2017’s estimated earnings per share of $10, all of which are inexpensive compared to its five-year average price-to-earnings multiple of 11.3.

Second, it is home to one of the market’s best dividends. It pays a dividend of $1.15 per share quarterly, or $4.60 per share annually, giving its stock a 5% yield. It has also increased its quarterly rate for five consecutive quarters and its annual rate for five consecutive years.

I think CIBC will outperform the overall market in 2016, and Foolish investors should strongly consider initiating positions today.

Fool contributor Joseph Solitro has no position in any of the stocks mentioned.

Jacob Donnelly: RioCan Real Estate Investment Trust (TSX:REI.UN)

RioCan Real Estate Investment Trust (TSX:REI.UN) is my top stock of the month due to the sale of its U.S. portfolio. According to reports, the company paid $1.2 billion to buy the properties and has agreed to sell the portfolio to Blackstone Real Estate Partners VIII for $2.7 billion.

This move will enable the company to pay down some of its debt and acquire new properties across Canada. Both of these moves will help improve cash flow, thus allowing the company to increase its dividend from the present $0.1175 per share per month.

A series of other smart deals and acquisitions are making this stock one to watch both in January as well as throughout 2016.

Fool contributor Jacob Donnelly does not own shares in any of the companies mentioned.

Kay Ng: Telus Corporation (TSX:T)(NYSE:TU)

The news that Shaw Communications Inc. is buying Wind Mobile brought Telus Corporation (TSX:T)(NYSE:TU) shares down to about $39 for a 4.5% yield.

Shaw needs to upgrade Wind’s 3G network to LTE and to expand its geographic coverage before it becomes competitive against Telus in the wireless space in western Canada. Because of these reasons, the dip in Telus is a good opportunity to scoop up some shares.

Telus’ payout ratio is about 70% and within its target range of 65-75%. It’s committed to hiking dividends, and intends to increase the dividend by about 10% in 2016, which would be its 12th consecutive year increase.

Fool contributor Kay Ng owns shares of Telus Corporation.

Ryan Vanzo: Dominion Diamond Corp. (TSX:DDC)(NYSE:DDC) 

Dominion Diamond Corp. (TSX:DDC)(NYSE:DDC) stock has been on a tear recently after a Canadian-based hedge fund bought up shares and called for strategic changes. Investors should take note. While the company had planned to plow money back into growth projects amidst crumbling diamond prices, company directors are now considering alternative options. With a net cash pile of over $280 million (roughly 30% of its market cap), Dominion should have plenty of choices.

Possible alternatives include buying struggling competitors at a bargain price, or returning cash to shareholders through stock buybacks. Not only would these options help support the company’s stock price, but they could also help return investor confidence in one of the diamond industry’s best positioned operators.

Fool contributor Ryan Vanzo does not own shares of Diamond Dominion Corp.

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.

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