Joey Frenette: Canadian Imperial Bank of Commerce
Macro headwinds have shown signs of subsiding in recent months, and with some Canadian banks hitting new all-time highs, CIBC’s discount relative to its peers has since widened despite encouraging results from its U.S. business and provisions that are no longer surging uncontrollably.
With earnings slated to land on December 5th, I think the window of opportunity to buy CIBC stock at a massive discount to its peer group could be drawing to a close. CIBC stock has a 5.1% dividend yield and trades at just 9.3 times forward earnings, offering terrific value for income investors at today’s levels.
Fool contributor Joey Frenette owns shares of Canadian Imperial Bank of Commerce.
Ryan Vanzo: Fairfax Financial Holdings Ltd.
My top stock for December is Fairfax Financial Holdings Ltd (TSX:FFH)). It’s not often that you can buy a long-term winner at a discount. This looks like your chance.
Since 1985, Fairfax stock has produced annual returns of roughly 17%. The firm runs a strategy similar to Berkshire Hathaway, owning a litany of insurance businesses that generate regular cash that is then invested into private and public businesses.
This year, the company’s investment portfolio lagged the market, causing its share price to fall below book value. Long-term performance is the only thing that really matters, however. Expect the company to return to its proven history of beating the market.
Fool contributor Ryan Vanzo has no position in Fairfax Financial Holdings Ltd.
David Jagielski: Boston Pizza Royalties Income Fund
Boston Pizza Royalties Income Fund (TSX:BPF.UN) is my stock pick for December. Hovering near its 52-week low, the fund could become a bargain buy for investors. In just three months, the stock has fallen more than 17% and that has pushed its dividend up to an incredible 9.6%. And with monthly payouts, this could be an excellent option for investors who are looking to add some recurring income to their portfolios.
Although the fund’s most recent quarterly results disappointed investors as same-store sales were down for Boston Pizza, the fund still posted a profit and free cash flow continued to be strong.
There are some short-term concerns around how Boston Pizza restaurants will recover, but it’s too early to panic just yet. Boston Pizza is still a very popular brand across the country and I wouldn’t be surprised to see restaurant sales improve in future quarters as the popular chain takes measures to try and stimulate more growth.
Fool contributor David Jagielski has no position in Boston Pizza Royalties Income Fund.
Christopher Liew: Choice Properties
Choice Properties (TSX:CHP.UN) is a $4.21 billion real estate investment trust (REIT). This REIT stock pays a dividend of 5.45%, making it ideal for TFSA investors.
Choice owns industrial, office, and residential assets whose strategic locations are in high-demand markets. The company is diversifying and slowly shifting focus onto residential areas as well as transit hubs.
You will also have the opportunity to become a landlord to the largest food retailer in Canada. Choice Properties has 756 high-quality real estate properties that are for lease to necessity-based tenants. Because of its strategic alliance with Loblaw, stores of the top grocer are the tenants of Choice Properties.
With a prominent food retailer as an anchor tenant plus an impressive real estate development pipeline, I believe Choice Properties is a welcome addition to your portfolio.
Fool contributor Christopher Liew has no position in any stock mentioned.
Chen Liu: Painted Pony Energy Ltd.
Painted Pony (TSX:PONY) is a pure-play natural gas development and production company based in Western Canada. The slump in natural gas prices has had a material effect on the company’s revenues, which dropped from $210 million in 2018 to $174 million in 2019.
Despite this, the company reports negative retained earnings of $39 million (down from $15 million the prior year). This is not ideal, but in the oil and gas industry this is considered acceptable.
Painted Pony has access to a $375 million credit facility of which $156 million was drawn down as at September 30. This means the company has 58% of its credit facility that is unutilized. I believe this will be beneficial to investors as it gives it easy access to funds to grow the business.
When natural gas prices recover, investors will be generously rewarded.
Fool contributor Chen Liu owns shares of Painted Pony Energy Ltd
Rahim Bhayani: Alaris Royalty Corp
My top stock pick for December is Alaris Royalty Corp (TSX:AD), a Canadian Dividend Aristocrats Index member and one of the shrewdest private investors in Canada.
The company has given its shareholders a total return of 343% or an annualized return of 15% since its inception in 2008.
Alaris is cash flow positive, with $72 million net cash from operations, of which the company pays out $61 million in dividends.
This cash translates to an annualized dividend of $1.65 per share, which is paid monthly.
At a current share price of about $22, the dividend translates to a juicy yield of 7.5%.
Fool contributor Rahim Bhayani has no position in any of the stocks mentioned.
Cindy Dye: TC Energy Corporation
TC Energy (TSX:TRP) offers the rare combination of steady growth and a hefty dividend.
For the past 20 years, the dividend has increased at a compound annual growth rate of 6.83%. With a current yield of 4.42%, management is forecasting the dividend will increase 8% to 10% through 2021 and 5% to 7% thereafter.
As one of North America’s leading energy infrastructure companies, most of TC Energy’s revenue comes from long-term contracts. The stock price has soared this year, returning over 25%, and the company is forecasting significant earnings growth in the next few years. TC Energy recently announced comparable EBITDA is expected to exceed $10 billion by 2022, representing an increase of more than 16% from 2018.
Fool contributor Cindy Dye owns shares of TC Energy Corporation.
Kay Ng: Enbridge Inc.
Enbridge (TSX:ENB)(NYSE:ENB) is a defensive name to own in today’s late economic cycle. For just holding the stock, investors get a safe and juicy yield of about 5.8%, which is historically high for the company and more than double the one-year GIC rate of 2.4%.
Enbridge is the largest North American energy infrastructure company with largely regulated cash flows and a stable growth profile. It’s a Dividend Aristocrat with more than two decades of dividend growth.
The key near-term growth driver will be the Canadian portion of its Line 3 Replacement project that will be put on stream this month. Shareholders are anticipating another dividend hike of about 10% coming up real soon in the first quarter.
Fool contributor Kay Ng owns shares of Enbridge.
Matt Smith: Innergex Renewable Energy Inc.
The fight against climate change is a powerful tailwind for renewable energy stocks. One which stands out is Innergex Renewable Energy (TSX:INE) which has gained 31% since the start of 2019, with signs of further growth ahead. Innergex reported solid third quarter 2019 results including a healthy 35% year over year increase in electricity produced, giving EBITDA a solid 28% lift causing net income to rise by 3%.
Impressively, the clean energy utility generated free cash flow of $100 million for the period, 2% greater than a year earlier. This was driven by increased production from existing plants and acquired or commissioned assets, including the 250-megawatt (MW) Phoebe solar facility in Texas. Innergex has five projects, 2 in Chile and 3 in the U.S., with combined capacity of 370 MW under development which are expected to enter service by 2022. Patient investors will be rewarded by Innergex’s sustainable dividend yielding a tasty 4%.
Fool contributor Matt Smith has no position in any stocks mentioned.
Demetris Afxentiou: TransAlta Renewables
My pick for this month is TransAlta Renewables (TSX:RNW), an iconic investment option that should be on the radar of nearly every type of investor in my opinion. Apart from benefiting from the same lucrative PPA model that its fossil-fuel peers adhere to, TransAlta offers growth and income prospects in a diversified package.
TransAlta boasts a portfolio of 34 different renewable energy facilities that are scattered across 10 operating regions on two continents. Those facilities also include a variety of renewable energy sources such as wind, hydro and solar. As traditional utilities scramble to adapt to renewable energy generation, TransAlta is already there, providing years of steady growth and income-earning potential.
Speaking of income-earning potential, TransAlta provides a tasty high-yield dividend that currently works out to an attractive 6.36% with a monthly payout.
Fool contributor Demetris Afxentiou has no position in TransAlta Renewables.
Ambrose O’Callaghan: H&R Real Estate Investment Trust
H&R Real Estate Investment Trust (TSX:HR.UN) is my top stock for December. REITs have performed well in 2019 as income-generating equities have surged back into favour. This is partly due to the collapse in bond yields, but Canada’s real estate sector has also enjoyed a healthy rebound.
Shares of H&R REIT had dropped 3.7% month-over-month as of close on November 25. The stock had an RSI of 34 at the time of this writing, putting it just outside of technically oversold territory. H&R REIT offers a monthly dividend of $0.115 per share, which represents a beefy 6.4% yield. Investors can scoop up a dividend beast at a discount right before the holidays.
Fool contributor Ambrose O’Callaghan has no position in any stocks mentioned.
Stephanie Bedard-Chateauneuf: AutoCanada
AutoCanada (TSX:ACQ), a multi-location North American automobile dealership group, is my top stock for December.
AutoCanada operates 64 franchised dealerships in eight provinces and a group in Illinois.
The automobile dealership group posted strong results for a second consecutive quarter. Revenue was $981.9 million in the third quarter, an increase of 13.3% over the prior year. AutoCanada has managed to reduce its net debt by $69.4 million in the quarter. Revenue for the full year is expected to grow by 10.5% to $3.5 billion, while earnings are estimated to soar 875% to $0.39 per share.
AutoCanada’s stock is cheap with a P/E of only 5.4. The stock has risen more than 20% year to date and has a dividend yield near 3%.
Fool contributor Stephanie Bedard-Chateauneuf has no position in AutoCanada.
Daniel Da Costa: Aritzia Inc
My top stock for December has to be Aritzia (TSX:ATZ). Aritzia has posted some incredible growth numbers since its IPO and the company only continues to strengthen its operations.
In the last two years its return on equity has exceeded 20% and the company still has huge room to grow in the United States.
The reason its numbers are so strong are a result of it becoming one of the most popular fashion retailers, thanks to its strong brands and celebrity endorsements.
The stock has come down off its highs since it last reported earnings and now looks like the perfect time to gain some exposure, to one of the fastest growing stocks on the TSX.
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned.
Nikhil Kumar: E-L Financial Corporation Limited
E-L Financial Corporation Limited (TSX:ELF) is a Canadian investment holding company with an after-tax liquidation value of approximately $1,550 a share. The stock trades at $740 a share and liquidity is low.
Over the last 50 years, the company grown book value a phenomenal 12.4% a year.
E-L Financial owns 99.4% of Empire Life Insurance Company which it carries on the balance sheet at book value. Empire Life is the company’s crown jewel and likely worth a multiple of book value. The company’s other assets are diversified value stocks that have compounded at a 10-15% rate of return over several decades.
Fool contributor Nikhil Kumar owns shares of E-L Financial Corporation Limited.
Debra Ray: BlackBerry Ltd
BlackBerry Ltd (TSX:BB)(NYSE:BB) is officially bouncing back from its failure to lead the smartphone market after the first iPhone release in 2007. The company has since rebranded as an artificial intelligence and cybersecurity firm. This stock is a buy because the company has announced some significant sales contracts.
Last month, BlackBerry announced that Canadian Pacific Railway would deploy a BlackBerry powered monitoring system across 2,000 domestic intermodal chassis. If this relationship works out, Canadian National Railway may be next to upgrade its security to include BlackBerry’s machine learning technology.
Canadian investors should keep an eye on the sales contracts BlackBerry wins, and begin picking up shares in this stock because it is a real turnaround story.
Fool contributor Debra Ray has no position in any stock mentioned.
Andrew Walker: TC Energy
In addition, TC Energy says it is well positioned to fund its $30 billion capital program without issuing more shares. This is important as it suggests existing shareholders don’t have to worry about their part of the profit pie being heavily diluted.
Management is targeting average annual dividend growth of 8-10% through 2021. Afterwards, investors should still see dividends increase in a 5-7% range over the medium term. The current quarterly payout provides an annualized yield of 4.5%.
If you are searching for a steady buy-and-hold dividend stock, TC Energy deserves to be on your radar.
Fool contributor Andrew Walker has no position in TC Energy.
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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.
The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), BlackBerry, and Enbridge. The Motley Fool recommends ALARIS ROYALTY CORP., BlackBerry, Canadian National Railway, and FAIRFAX FINANCIAL HOLDINGS LTD and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short January 2020 $220 calls on Berkshire Hathaway (B shares).