Canadians are searching for quality stocks to add to their self-directed RRSP portfolios.
Everyone is familiar with the popular go-to names in the Canadian market, but the TSX Index is full of other great companies that might not get the attention they deserve.
Intact Financial is Canada’s largest provider of home and auto insurance in Canada and has a growing specialty insurance business in the United States. The company’s 13,000 employees look after more than five million personal, business, public sector, and institutional customers. In Canada, the company sells insurance under the Intact and belairdirect brands, both through partner brokers and via its BrokerLink subsidiary.
In the U.S., Intact operates through OneBeacon Insurance Group, which it acquired last year for $2.3 billion.
The company reported solid Q2 2018 results. Net operating income rose 4% to $201 million compared to Q2 last year. Premiums grew 16% in the quarter and 18% in the first half of 2018, supported by the One Beacon acquisition.
Intact raised the quarterly dividend by more than 9% to $0.70 per share for 2018. That’s good for an annualized yield of 2.6%.
Keyera is a midstream energy solutions company with assets that include natural gas gathering and processing, natural gas liquids (NGL) processing, transportation, storage, and marketing. The name might not be familiar to you, but Keyera is a major player in its segment, with a market capitalization of $7.7 billion.
The company reported Q2 adjusted EBITDA of $210 million compared to $133 million in the same period last year. Net earnings came in at $107 million, or $0.52 per share, compared to $67 million, or $0.36 per share, in Q2 2017.
The diversified asset base provides a balanced revenue stream, and the company’s strong capital program should support ongoing revenue and cash flow growth.
Keyera just raised the monthly dividend by 7% to $0.15 per share. That’s good for a yield of 4.5%.
The stock has enjoyed a steady run from $32 in March to the current price near $37, but that’s still off the 2014 high of $49, so there could be some nice upside in the next couple of years as the energy sector continues to recover.
The bottom line
Intact and Keyera are growing companies with leadership positions in their respective markets. Both stocks should be solid picks for a buy-and-hold RRSP portfolio.
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 Andrew Walker has no position in any stock mentioned. Intact is a recommendation of Stock Advisor Canada.