Hey there, Fools. We’re back again to highlight some stocks that have recently set new 52-week highs. As a reminder, we do this because
- it’s better to own businesses that boast improving fundamentals, as opposed to worsening fundamentals; and
- a bit of positive price momentum can carry a stock to even greater heights.
As a value investor, paying up for a stock isn’t my ideal approach. But sometimes it can make a whole lot of sense.
Fully fueled rise
Our first high flyer is Parkland Fuel (TSX:PKI), whose shares hit a new 52-week high of $43.91 on Monday. Over the past year, the energy storage and transportation company is up an impressive 68% versus just 5% for S&P/TSX Composite Index.
A good chunk of that return came in August after Parkland posted market-thumping Q2 results. During the quarter, sales spiked 109% to $3.8 billion, while adjusted EBITDA more than quadrupled over the year-ago period. The results were driven by strong fuel and petroleum product volume, which jumped 62%.
Even after the recent rally, Parkland shares offer a decent yield of 2.7%. That might not seem like much, but given the solid cash flow and operating momentum backing it up, the risk/reward trade-off seems enticing. Moreover, with a beta of just 0.3 — about a third of the volatility of the overall market — the stock should be somewhat easy on the stomach.
Living the Dream
The next play on our list is Dream Office REIT (TSX:D.UN), which hit a 52-week high of $26 on Friday. Dream Office is now up about 17% over the past year, besting the S&P/TSX Capped REIT Index’s return of 13%.
For those unfamiliar with Dream, it’s one of the largest REITs in Canada, with 38 properties comprising about 7.4 million square feet of gross leasable area. Management recently initiated a restructuring program to focus on its properties in downtown Toronto, and investors seem to be applauding the progress. The company has sold $3.3 billion of assets, repaid $1.8 billion of debt, and repurchased $1.1 billion of units since the start of the program.
For income-hungry investors, Dream doles out a monthly dividend, which currently yields a healthy 4%. And just like Parkland, conservative investors won’t have to deal with intense volatility to earn it — Dream stock has a beta of 0.8.
Our final flyer this week is Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), whose shares hit a 52-week high of $125.21 late last week. Over the past year, the banking behemoth is up 12% versus 7% for the S&P/TSX Capped Financial Index.
Like most of its Big Five counterparts, CIBC is benefiting from strong business on both sides of the border. In Q3, the company posted a profit of $1.37 billion, driven largely by a 14% increase in personal and small business banking. Meanwhile, U.S. commercial banking and wealth management earnings jumped 34% to $162 million, fueled by its purchase of PrivateBancorp.
The strong results are leading to bigger dividends for shareholders. Along with the Q3 release, management increased the quarterly dividend from $1.33 to $1.36, representing its second raise of the year. With the stock sporting a still-healthy 4.4%, I wouldn’t bet against it in October.
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 Brian Pacampara owns no position in any of the companies mentioned.