Investors who have these three TSX dividend stocks in their investment portfolios will probably be happy campers. They recently hit 52-week highs! Should you buy, hold, or sell them? Here are some analyst insights to help you with your decision-making.
Fairfax Financial Holdings
Fairfax Financial Holdings (TSX: FFH) is sometimes referred to as a smaller version of Berkshire Hathaway. Like Berkshire, it’s a holding company that has an insurance business. FFH also aims for a high rate of return on invested capital to build long-term shareholder value.
The stock’s beta roughly matches the beta of the market. Like most stocks on the market, it got battered during the pandemic market crash. However, it has roughly doubled from the bottom of the market crash in early 2020. In the last year, its returns were also comparable to those of Berkshire Hathaway. FFH stock currently pays a yield of about 1.9%.
FFH and BRK.B Total Return Level data by YCharts
John O’Connell’s comment on FFH in October 2021 wasn’t kind, though:
“Prem Watsa engages in market timing, unlike Warren Buffett. Fairfax is a black box as to what it owns. Challenging business. Stuck in the mud for a while. If you want to look at good capital allocators in the [property and casualty insurance] business, look at BRK.B, which he owns.”
John O’Connell, chairman and CEO at Davis Rea
Royal Bank stock
Quality businesses are destined to recover from market corrections. The big Canadian bank stocks have made a big comeback from the pandemic market crash. As a leading bank with leading positions in a range of financial services in Canada, Royal Bank of Canada (TSX: RY)(NYSE: RY) is no exception.
It appreciated about 120% from the bottom of the market crash and now has the largest market capitalization of the big Canadian banks. Its market cap is an astounding $208 billion.
In the last 52 weeks, the dividend stock has returned close to 43%! The bank stock has long been a core holding in dividend portfolios. Currently, it offers a respectable yield of 3.3%.
RY Total Return Level data by YCharts
Here are David Driscoll’s comments on RBC stock this month:
“Rising interest rates will improve net interest margins (spread between mortgages issued and deposits taken). Dividend increases have occurred across the industry. Well diversified business that has operations in U.S.A. and globally. Avoid buying too many banking stocks as it exposes investors to sector risk.”
David Driscoll, president and CEO of Liberty International
Brookfield Infrastructure
Whereas Royal Bank stock may be a core bank stock holding for many, Brookfield Infrastructure Partners (TSX: BIP.UN)(NYSE: BIP) could be a core utility holding. Since BIP was spun off from Brookfield Asset Management, it has increased its cash distribution every year for more than a decade.
From the way it runs its business, investors can expect more dividend increases for many decades. Its cash flow is sustainable — about 90% is regulated and contracted and 70% is indexed to inflation. Currently, it yields about 3.5%.
Here’s a comment on the utility from Varun Anand in November 2021:
“Large-cap, diversified infrastructure play, headed by one of the best asset managers [Brookfield Asset Management]. Excellent job building out globally. Better ways to play infrastructure by owning individual names vs. a conglomerate. Good candidate if you want to sleep at night and collect the dividend.”
Varun Anand, vice president and senior portfolio manager at Starlight Capital
