The S&P/TSX Composite Index fell 48 points on June 27, which puts the TSX down over 210 points for the week so far. Investors may have received some good news, however, as there was a significant development in the ongoing trade spat between the United States and China.
It would appear that the moderate wing within the Trump administration, spearheaded by Treasury secretary and former Goldman Sachs Group Inc. executive Steven Mnuchin, has won out. President Donald Trump backed down from a policy that would seek to restrict Chinese investment south of the border. He has instead pledged to work with Congress to develop a solution going forward.
The Trump administration’s review of auto imports is still ongoing and is expected to conclude towards the end of the summer. NAFTA negotiations involving Canada, the U.S., and Mexico have stalled over the past few weeks, as Prime Minister Justin Trudeau prepares to attend a key NATO summit.
With all of this in mind, investors may want to build a more conservative portfolio this summer. Let’s take a look at three options that should secure income and reduce volatility going forward.
BCE services over 10 million residential and business customers in Canada. Shares of the communications company have dropped 10.6% in 2018 as of close on June 27. The stock is down 8.5% year over year.
BCE released its first-quarter results on May 3. Net earnings rose 3.1% from Q1 2017 to $709 million and cash flows from operating activities were up 13.9% to $1.49 billion. It reported 101,707 total broadband net customer additions in postpaid wireless, internet, and IPTV, which represented a 39% jump from the prior year.
The company declared a quarterly dividend of $0.755 per share, representing an attractive 5.4% dividend yield.
Hydro One Ltd. (TSX:H)
Hydro One stock has climbed 2.6% month over month as of close on June 27. Shares received a surprising bump following the Ontario election, which may indicate that investors are skeptical that the new premier will seek to dislodge the current Hydro One leadership.
Earnings per share rose to $0.37 in the first quarter, and the company hiked its quarterly dividend by 5% to $0.23 per share. This represents a 4.4% dividend yield. The wide moat at Hydro One and solid performance since its IPO has not resulted in a positive run for the share price. Investors will be hoping for stability on the political front going forward.
Stella-Jones Inc. (TSX:SJ)
Stella-Jones is a Quebec-based company that sells lumber and wood products. Its utility pole segment represents its largest source of revenue, and the United States is its biggest customer in this regard. The rising U.S. dollar is good news for Stella-Jones going forward.
In its first-quarter results, Stella-Jones posted organic sales growth of 3.8%, while EBITDA and operating income fell. The board of directors declared a quarterly dividend of $0.12 per share, representing a 0.9% dividend yield.