Neha Chamaria: Barrick Gold Corp. (TSX:ABX)(NYSE:ABX)
I was eagerly awaiting Barrick Gold Corp.’s (TSX:ABX)(NYSE:ABX) first-quarter earnings release, and I certainly didn’t see a double-digit drop coming in the gold stock after the release. Sure, Barrick missed consensus earnings estimates by a wide margin on lower production and high costs. Barrick also downgraded its full-year gold production guidance by roughly 5% at the midpoint. That’s not the kind of report that would make investors enthusiastic.
But didn’t the market overlook the fact that a large chunk of the production decline is because Barrick is selling 50% of its Veladaro mine to China-based Shandong Gold for US$960 million? Or that Barrick still expects FY 2017 all-in sustaining costs to be US$720-770 per ounce, despite lower production, to remain one of the lowest-cost gold producers? Or that Barrick continues to deleverage and is on track to lower its debt by US$5 billion by 2018?
I can’t say for sure where Barrick will be by the time this goes out for publishing, but takeaway is this: when the markets overreact to one weak quarter, you know it’s an opportunity not to be missed.
Fool contributor Neha Chamaria has no position in this company.
Enbridge Inc. (TSX:ENB)(NYSE:ENB) is the largest energy distribution and transportation company on the continent. Enbridge is constantly working on new projects and has over $26 billion in pipeline projects coming online over the next two years and over $40 billion in projects in various states of construction and review.
Once those pipelines are constructed, Enbridge goes into toll-booth mode, charging companies a flat rate to transport oil and natural gas across the company’s massive network. That flat rate allows Enbridge to predict costs and realize a steady stream of revenue; it’s not weighed down by fluctuations in oil prices.
The recent acquisition of Spectra Energy not only positioned Enbridge as the market leader on the continent, but that deal will also provide at least 10% growth over the next seven years to shareholders, making the already appetizing 4.07% dividend yield look that much more attractive.
Disclosure: Fool contributor Demetris Afxentiou has no positions in this company.
However, it revealed its Q1 numbers, and they’re incredibly strong. In Q1 2016, the company had a net loss of $118 million. Fast forward to Q1 2017, and it had net earnings of $211 million — a significant change.
This is thanks, in part, to a 19% increase in total crude oil production and a 7% decrease in its per-unit crude oil operating costs.
It might take some time, but when the drama around Cenovus’s major acquisition dies down, this company could move in the right direction. It’s worth keeping an eye on.
Fool contributor Jacob Donnelly has no position in this company.
Gold’s recent surge, which sees it up by 10% for the year to date, has brought the spotlight firmly back on gold mining stocks. One that stands out is streamer Osisko Gold Royalties Ltd. (TSX:OR)(NYSE:OR).
Like larger peers Franco-Nevada Corp. and Silver Wheaton Corp., it is focused on developing a portfolio of royalty contracts and precious metals streams. Unlike them, Osisko is solely focused on the stable jurisdiction of Canada; since commencing operations in Canada in 2014, Osisko has built a portfolio comprised of over 50 royalty contracts and one stream.
For this reason, production has tripled since then to be 38,270 ounces in 2016, or 25% higher than a year earlier. The stunning rate of growth will continue because 2017 production is expected to rise by 20%.
Such strong growth allows Osisko to fully benefit from higher gold prices, meaning that its stock price will appreciate in coming months. While investors wait for this to occur, they will be rewarded by its regular dividend yielding just over 1%.
Fool contributor Matt Smith has no position in any of the companies mentioned.
Karen Thomas: Alaris Royalty Corp. (TSX:AD)
Alaris Royalty Corp. (TSX:AD) provides capital to private businesses and collects dividends from these investments as well as participates in the potential profit and growth of these companies. The relationship is such that Alaris participates in the businesses through non-control equity ownership. This is a very attractive financing arrangement for entrepreneurs who need financing, but would like to maintain control and decision making of their company.
The most obvious selling point of Alaris as an investment is its dividend yield, which is at 7.2%, and the fact that the dividend has increased 93% since 2010. Further to this is the fact that the shares are trading at a pretty attractive valuation — a price-to-book multiple of 1.2 times with a return on equity of 10%.
Fool contributor Karen Thomas has no position in this company.
Colin Beck: Pure Industrial REIT (TSX:AAR.UN)
Buying shares in Pure Industrial REIT (TSX:AAR.UN) is a great way for investors to benefit from the rise of e-commerce. As consumers are continuing to shop more online, the demand for industrial-type buildings will only increase. With the stock trading at a price-to-earnings ratio slightly below its five-year average of 10.5, investors can acquire a stock with growth potential at a discount.
In addition, the company offers a generous dividend of 4.84% while maintaining a dividend payout of 45%. Therefore, with an occupancy rate of roughly 98%, Pure Industrial has the cash flow needed to maintain its current yield and acquire other industrial buildings.
Fool contributor Colin Beck has no position in this company.
The company acquired Columbia Pipeline Group last year in a deal that added strategic natural gas assets in the growing Marcellus and Utica plays as well as significant pipeline infrastructure running from New York to the Gulf Coast.
The acquisition also increased the near-term capital program to $23 billion.
Management sees cash flow growing enough in the next three years to support annual dividend increases of at least 8%.
Keystone XL is back in play, and there is still a chance Energy East could get built. If the mega projects go through, investors should see some additional gains.
TransCanada’s current dividend yields 3.9%.
Fool contributor Andrew Walker has no position in this company.
Enbridge Inc. (TSX:ENB)(NYSE:ENB) was my top pick last month and remains my top pick this month. Since last month, the shares have appreciated about 5%, but they are still at a reasonable value. At about $57 per share, Enbridge trades at a multiple of about 14.5 based on its available cash flow from operations (ACFFO).
Enbridge’s merger with Spectra Energy strengthened its portfolio by giving it greater diversification across asset type and geography. Given that the leading energy infrastructure company believes it can increase its ACFFO by 12-14% per year and its dividend by 10-12% per year, it is a reasonable buy as a long-term investment today. It offers a 4% yield, which adds to returns as well.
Fool contributor Kay Ng has no position in this company.
Ryan Goldsman: Home Capital Group Inc. (TSX:HCG)
Going into April, my top pick for the month is Home Capital Group Inc. (TSX:HCG). During April, the company pre-reported diluted earnings per share in the amount of $0.90 for the period ending March 31, 2017. In addition, a number of other negative developments have taken shape.
First, the Ontario Securities Commission (OSC) investigation is proceeding. Second, a number of changes are being made at the board of director and management level. Lastly, the company announced the intent to enter a line of credit (financing agreement) in the amount of $2 billion. Shares plunged on the news, and existing investors felt the pain.
Although the news has been nothing but negative for the month of April, the tide may now be ready to turn as the biggest challenge faced by the company (continued funding) has now been put to rest for the next year.
Fool contributor Ryan Goldsman has no position in this company.
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Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool owns shares of Enbridge and Silver Wheaton. Enbridge and Silver Wheaton are recommendations of Stock Advisor Canada.