The CPP Investment Board (CPPIB) is a professional investment management organization that was formed to perform one objective. The organization’s task is to invest the assets of the Canada Pension Plan (CPP) on behalf of its 20 million Canadian contributors and beneficiaries.
The goal of the CPPIB is to maximize returns without undue risk of loss. With this investment strategy, the board is hoping more workers will support the growing number of Canadian retirees. As of March 31, 2019, the assets are over $400 billion. It would be interesting to find out CPPIB’s top five holdings.
CPPIB’s top five holdings
Based on the published data (as of Q1 2019) and arranged by market value, WSP Global (TSX:WSP) is number one on the list. CPPIB holds 20,696 shares of WSP with a market value of $1.5 billion.
WSP is a professional services consulting firm that operates in Canada, the United States, the U.K., Sweden, Australia, New Zealand, Asia, and internationally. This $7.32 billion company develops creative, comprehensive, and sustainable engineering solutions for modern societies to thrive.
The Montreal-based company is present in almost all industries and sectors, including energy, healthcare, rail and transit, and maritime, among others. This industrial stock is a dividend payer, although it rarely appears on investors’ radars.
Second on the list is Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ). CPPIB owns $1 billion worth of shares of CNQ. The energy stock is underperforming year to date, but there is potential upside when the sector improves.
CNQ is on a comeback after back-to-back losses in 2015 and 2016. In the last two years, this $35.8 billion oil and gas E&P surprised investors by posting an average net income of $2.5 billion. With gross estimates of 15.4% this year, analysts are forecasting a price appreciation of 82% in the next 12 months.
Keep in mind that the stock has grown dividends for 17 years. With the potential capital gain and 4.5% dividend yield, the return could be better-than-market average.
Entertainment One, or eOne, is third on the list. But the Canadian multinational mass media and entertainment company is listed on the London Stock Exchange but not on the TSX.
Royal Bank of Canada, Canada’s largest banking institution by market capitalization, is ranked fourth.
CCPIB owns $666 million and $555 million worth of shares of eOne and RBC, respectively.
Rounding out the top five is Seven Generations (TSX:VII). This $2.36 billion low-supply cost energy producer generates revenue from its liquids-rich Kakwa River Project in northwestern Alberta. In return, shareholders enjoy substantial gains.
The oil and gas company is evolving rapidly. Analysts who are covering the stock see Seven Generations turning into a sustainable free cash flow-generating entity and becoming of one of Canada’s highest-growth E&Ps.
Investors should have the confidence to invest in Seven Generations. CPPIB owns 56,399 shares ($544 million) of the promising energy stock. Based on projections, the current price of $6.78 could triple in the coming months.
CPPIB’s total holdings
CPPIB’s published list of publicly traded equity holdings contains 138 stocks whose net market values are more than $1 million. Of the top five, four of them are trade. Any of the four stocks could be valuable additions to your stock 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 Christopher Liew has no position in any of the stocks mentioned.