Changing consumption and recreation trends will drive this stock higher

Canopy Growth (TSX:WEED)(NYSE:CGC) should benefit from the changed food and beverage consumption trends that have emerged since March. Sales of cannabis soared in March as stay-at-home orders went into effect across Canada. Furthermore, while dried flower sales remained steady, sales of higher-margin Cannabis 2.0 products, such as edibles and extracts, saw a significant increase in demand in March. These sales trends remained intact through May.

Canopy is heavily invested in cannabis-infused beverages. Sales of cannabis-infused beverages are not broken out by Statistics Canada in the monthly cannabis market stats. However, cannabis-infused beverages would fall within the edibles or extracts categories, both of which saw sharp increases in demand in March.

Additionally, Canopy recently reported that the company shipped 1.2 million cannabis-infused beverages since March. Both of these figures indicate that cannabis-infused beverages are likely gaining in popularity.

As work-from-home policies continue, there may not be as many workers getting together for drinks at the bar after work. Some of these individuals may switch to cannabis-infused beverages. Cannabis-infused beverages are currently only sold in retail and e-commerce channels, and not via traditional restaurants.

Therefore, Canopy should benefit as the company’s products get increasing visibility and exposure as people stay home and away from bars and restaurants.

It is unclear whether banks will significantly benefit from continued work-from-home policies

Major Canadian banks, including Royal Bank of Canada (TSX:RY)(NYSE:RY) (“RBC”), have already announced that most employees will continue to work from home until 2021. This move was not entirely unexpected. However, for the banks, it is unclear whether there will be any significant savings achieved through work-from-home initiatives.

RBC has over 1,000 branches in Canada. These are locations that RBC must still pay rent on, despite the fall in traffic. Additionally, RBC has corporate offices in Toronto and across the country. Similarly, RBC must still pay for the office space that it has contractually leased, even if the space is being underutilized. Ultimately, RBC has many fixed expenses that will not disappear just because employees are working from home.

Furthermore, the work-from-home trend does not necessarily boost RBC’s revenue or profits. There is no inherent increase in demand for loans as a result of people staying home. That said, RBC still earned over $1 billion in Q2 2020.

RBC should therefore continue to be profitable in 2020 and 2021 during the continuation of work-from-home policies. However, major banks, like RBC, are unlikely to enjoy any significant tailwind as a result of these policies continuing.

Connectivity will continue to play a vital role

In July, Telus (TSX:T)(NYSE:TU) reported a 3.6% revenue increase for Q2 2020, compared to Q2 2019, although profit was down on higher expenses. This revenue stability is largely attributable to Telus’s lack of investments in professional sports assets.

Telus is the only member of the Big Three that doesn’t have significant investments in professional sports assets. Additionally, Telus owns Telus Health, a healthcare IT solutions business. The lack of sports assets, combined with the ownership of a healthcare IT business, is a major tailwind for Telus going into 2021.

Companies that are invested in sports assets will benefit if demand for sports content returns. However, of the sports that have returned, the format of the schedules has changed. It is unclear whether the new schedule formats will attract viewers in the same way that original and time-tested schedule formats did. Telus does not have to worry about this.

Telus is primarily a company that provides connectivity, which has been in incredibly high demand since March.

Takeaway

It is all but certain that a number of organizations will have employees work from home for much, if not all, of the next year.

As this trend continues, Canopy and Telus will likely benefit. RBC will remain profitable, but is unlikely to see any significant boost as a result of work-from-home policies being extended into 2021.

The post Got an Extra $2,000? 3 Stocks to Consider for Work From Home appeared first on The Motley Fool Canada.

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BCE

BCE (TSX:BCE)(NYSE:BCE) is Canada’s largest telecommunications company by market capitalization. The company has a very stable mobility, internet, and television business. BCE also has the Bell Media division, which has struggled in 2020.

However, a strong rebound in demand for sports and sports content in the second half of 2020 and in 2021 should bode well for BCE. As owners of both sports teams and sports media, BCE stands to benefit significantly from the return of sports.

BCE pays a quarterly dividend that equates to $3.33 annually. If you wanted to generate $500 in annual income exclusively from BCE shares, you would need approximately 150 shares.

BCE also raises the dividend by approximately 5% annually. Thus, a $500 income stream today will likely grow at a faster rate than inflation, maintaining purchasing power if the prices of goods and services begin to rise.

TD

The Toronto-Dominion Bank (TSX:TD)(NYSE:TD) (“TD”) is Canada’s second-largest bank. TD has a very large retail presence in the United States, with more locations south of border than in Canada. However, TD’s loan portfolio is mostly allocated towards Canadian borrowers.

The U.S. dollar has taken a bit of a tumble since March. From TD’s perspective, this could prove to be advantageous, especially if the Canadian dollar continues to gain against the U.S. dollar. As TD derives the bulk of total profit from Canadian borrowers, a rising Canadian dollar would make it cheaper to lend to U.S. clients, which could allow the bank to grow U.S. loan volumes at a low cost.

TD pays a quarterly dividend of $0.79, which equates to $3.16 annually. You would need about 160 shares of TD to generate $500 in annual income. TD has grown the dividend at 10% annually over the past decade. Thus, your income stream will likely increase in purchasing power going forward. However, it is too soon to tell whether TD’s dividend-growth rate will be impacted by the pandemic.

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) owns vital midstream oil and natural gas infrastructure across North America. Importantly, it owns one of the few pipelines connecting the Canadian western provinces with vital U.S. markets. This means that Enbridge benefits from an extremely wide moat, especially given the difficulty in building pipelines in Canada over the past decade. This results in recurring and predictable cash flows that Enbridge is able to pass on to shareholders.

Enbridge pays a quarterly dividend of $0.81, or $3.24 annually. Enbridge offers the highest starting yield of the three companies discussed. This means that Enbridge requires the smallest initial investment to generate $500 in annual income.

Investors would need to purchase approximately 155 Enbridge shares to generate $500 in annual income. Like BCE and TD, Enbridge has a long history of dividend growth.

Enbridge has maintained a double-digit dividend-growth rate for the past 25 years. Thus, Enbridge’s dividend payments will likely withstand inflationary pressures very well, even if inflation rates increase sharply from current levels.

Takeaway

Compared to some other dividend stocks, these three stocks can help you generate $500 in annual income with relatively little upfront capital. However, as always, don’t put all of your eggs in one basket. Make sure to diversify your portfolio and ensure that you are not exposed too heavily to any single stock.

Furthermore, don’t focus on dividends to the exclusion of all else. Make sure to identify companies with strong, high-moat, and resilient business models — generous dividends will often follow.

The post Want to Generate $500 in Annual Income? Start With These 3 Dividend Stocks appeared first on The Motley Fool Canada.

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As economic activity slowly returns to normal, some of these businesses will thrive. Unfortunately, some of these businesses may continue to struggle if COVID-19 infection rates begin to increase again or if social distancing restrictions remain in effect for longer than expected.

To understand how two hard-hit Canadian companies in the retail and entertainment spaces might fare, let’s compare Canada Goose (TSX:GOOS)(NYSE:GOOS) and Cineplex (TSX:CGX).

Canada Goose

Canada Goose is the famous Canadian parka maker that has become a global brand. The company has made a name for itself selling premium, and high-priced, winter jackets. Canada Goose has slowly branched out into other lines of apparel. However, jackets are still what the company is primarily known for.

Canada Goose stock was on fire in 2018. The TSX-listed shares reached an all-time high above $90 in November 2018 before beginning a gradual descent. This descent continued through March 2020, when the stock briefly traded below $20.

Retailers around the world closed in March and this was difficult for Canada Goose. Over the past few years, Canada Goose has been pursuing a vertical integration strategy and has opened over 20 brick-and-mortar stores around the world. Unfortunately, 2020 was not a great year for brick-and-mortar retailers.

However, Canada Goose’s overall gross margins were over 60% during the last fiscal year. These are impressive margins that should allow the company to drive significant profitability on increasing volumes as luxury consumer spending and in-person shopping picks up again.

The brand recognition and ability to sell products via e-commerce channels should help the company remain relevant if social distancing guidelines remain in place, and in-person shopping remains muted, over the next year.

Cineplex

Cineplex is the largest movie theatre chain in Canada. The company also owns some digital commerce assets like CineplexStore and amusement facilities such as The Rec Room and Playdium. Cineplex is in the business of providing entertainment experiences in a physical environment. This business model completely collapsed during the pandemic.

Cineplex is also suffering from the effects of the failed $2.8 billion takeover by Cineworld. Cineplex announced that it will be suing Cineworld after Cineworld terminated the deal — a necessary move. However, it will be a distraction at a time where Cineplex would prefer to focus on successfully re-opening theatres across the country.

Cineplex owns and operates over 160 movie theatres under various brands. The theatre business is an asset-heavy business. Cineplex paid over $150 million in rent payments in 2019. While theatres have reopened in many parts of the country, social distancing requirements significantly limit audience sizes.

Unless social distancing measures ease, this strain will continue to put downward pressure on Cineplex’s share price. Unlike Canada Goose, Cineplex can’t easily pivot to e-commerce.

Takeaway

Canada Goose and Cineplex can both potentially outperform going forward. Both companies will significantly benefit when social distancing guidelines are eased. However, if social distancing guidelines remain in place longer than expected, Cineplex is likely to suffer more, given the company’s larger and more expensive asset base.

The post Canada Goose (TSX:GOOS) vs. Cineplex (TSX:CGX): Which Is the Better Turnaround Stock? appeared first on The Motley Fool Canada.

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Warren Buffett is one of the most successful investors of all time. His long-term and value-oriented approach has delivered astronomical returns over time. Investors in his company, Berkshire Hathaway, have witnessed the stock price of A-class shares increase by a factor of over 1,000 during his tenure.

The Oracle of Omaha, as he is affectionately known, has dabbled in TSX stocks during his career. Currently, he (or more accurately, Berkshire Hathaway) only owns two. However, this does not necessarily mean that these two stocks are good investments at this point in time. Let’s take a deeper dive into Berkshire Hathaway’s two Canadian holdings.

Suncor Energy

Suncor Energy (TSX:SU)(NYSE:SU) is one of the largest operators in Canada’s oil sands. The company is an integrated energy company as well, meaning that it has refining and retail assets in addition to production assets inside and outside of Canada. This makes Suncor far less dependent on the price of oil than pure-play upstream oil companies.

Suncor has struggled since 2019, when the current oil bear market effectively began. Investors may forget, but there were already a number of problems facing the energy industry before the pandemic. Oversupply plagued the energy sector in 2019 and West Texas Intermediate (WTI) prices remained between $50 and $60 per barrel for most of that year.

On the back of these issues, the pandemic has wreaked havoc on the global energy industry, and the Canadian market was not spared.

Suncor recently cut the dividend 55% as a result of collapsing oil prices. The company still pays an annual dividend that yields almost 4%. However, it is unclear if the company will be forced to cut the dividend again if oil prices fall toward the $30 per-barrel range and remain there in 2021 and beyond.

Many, including myself, were hopeful that the sharp rise of oil from approximately -$40 per barrel in April to $40 per barrel in August would have resulted in a sharp bounce in the share prices of energy companies. That has not happened.

While Suncor is a well-run company, the sector as a whole may take years before it is in favour with investors again. However, at current prices, Suncor appears quite cheap.

Restaurant Brands International

Restaurant Brands International (TSX:QSR)(NYSE:QSR) (“RBI”) is the Canadian-headquartered parent company of Burger King, Tim Hortons, and Popeyes. Buffett’s journey with RBI began in 2014 when Berkshire Hathaway teamed up with 3G Capital to merge Burger King and Tim Hortons to form what is now RBI. Popeyes was added to the roster in 2017, after being acquired by RBI.

Popeyes has been the shining star of RBI’s portfolio lately. The chain’s new chicken sandwich has taken the world by storm. RBI has seen explosive same-store sales growth from Popeyes, which has been primarily attributed to the success of the new chicken sandwich. The chicken sandwich has yet to enter all markets, and thus there is still significant potential for this all-star product.

However, there are several challenges that RBI still faces because of changing consumer trends related to the pandemic. For example, with many people still working from home, breakfast-focussed fast-food chains have suffered. This trend has hurt Tim Hortons and will continue to be a headwind going forward.

RBI is still trading below pre-pandemic levels. Additionally, the dividend yield on the stock is almost 4%. This could make it a good buy for long-term value investors or dividend investors at these levels.

A continued re-opening of the economy and return to physical offices in the second half of 2020 could also provide a boost. However, it will likely take some time before RBI is able to put current challenges behind it.

Takeaway

Both stocks currently present attractive entry points for long-term and value-oriented investors. Perhaps unsurprisingly, this is essentially Buffett’s investing style. However, Buffett’s investing style may not be suitable for everyone.

If you, like Buffett, are willing to take a long-term view, these stocks are interesting at current prices. However, there are numerous uncertainties facing both companies that short-term and medium-term investors may be uncomfortable with.

The post Warren Buffett Owns These 2 Stocks: Should You? appeared first on The Motley Fool Canada.

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Cargo-focussed transportation stocks have also surpassed their pre-pandemic prices in many cases. This has many investors likely asking whether it is too late to capitalize on the trend of rising cargo volumes. This requires answering a few basic questions first.

What type of cargo volumes are you trying to gain exposure to?

Canadian National Railway (TSX:CNR)(NYSE:CNI), for example, benefits from an increase in low-value cargo volumes. When dealing with high-volume, low-value cargo, trains are the most cost-effective option. It doesn’t make sense to load tonnes of wheat, which only costs a few hundred dollars per tonne, into airplanes to fly it across the country. There is simply too much wheat that needs to be moved for this method of transportation to be economical.

Therefore, CN significantly benefits from increases in the movement of commodities across the country. CN’s stock price has recovered to pre-pandemic levels, as the volume of commodities being moved by rail has remained relatively high, except for oil. However, CN has not enjoyed the sharp share price spike that Shopify or cargo-focussed airlines have.

CN also has a very high-moat business model and pays a modest, but growing, dividend. Therefore, the stock is a great pick for long-term investors. However, don’t expect it to benefit as much as some other companies will, or have, from the rise in e-commerce.

Do you want a pure-play cargo company?

We will explore the concept of a pure-play cargo transportation company from the perspective of airlines. In this case, Cargojet (TSX:CJT) is a pure-play cargo airline stock. The company’s shares have more than doubled in price since March. This is directly attributable to the rising cargo volumes that have come with increased e-commerce.

Cargo-focussed airlines benefit significantly from e-commerce cargo volumes, because these are often low-volume and high-value items. The additional cost of transporting these goods by air, instead of by train or truck, is worth it. The additional cost of shipping is worth it, because it is easier to absorb the higher shipping costs when the prices and profit margins of the goods are higher.

A large part of Cargojet’s recent success is due to the complete lack of a passenger division. This has been a lifesaver for Cargojet in 2020. However, if transportation trends revert to their pre-pandemic ways, there will be a sharp increase in passenger volumes and a decrease, or at least levelling off, of cargo volumes. This could prove to be a difficult environment for Cargojet and the company’s shareholders.

Diversified exposure provides a hedge

Air Canada (TSX:AC) has struggled because of the pandemic. The airline’s Q2 revenue was down approximately 90% compared to Q2 2019. Unfortunately, being a passenger airline in 2020 has been difficult. However, Air Canada’s cargo division reported a 51% increase in revenue compared to Q2 2019. Surprisingly, Air Canada generated more revenue from the cargo division than it did from the passenger division in Q2 2020.

Air Canada provides some exposure to the cargo market, without leaving investors too exposed if cargo volumes drop, as passenger volumes pick back up. The company’s share price has been punished in 2020 and has come nowhere close to pre-pandemic levels yet. This may make it a good buy at current levels.

However, Air Canada will continue to struggle unless passenger demand eventually picks back up. Therefore, Air Canada is not necessarily the best pick if you are trying to invest based on the thesis that we are in a new normal of consistently higher cargo and e-commerce volumes.

Takeaway

It may not be too late to buy cargo-focussed stocks. If you think the rise in e-commerce volumes will be permanent, stocks like Cargojet should still have a lot of room to run. If you think that shopping and consumption trends will revert to the pre-2020 “normal”, then CN or Air Canada are probably the better buys currently.

The post The Cargo Segment of the Transportation Sector Has Been Soaring Since March: Is it Too Late to Buy? appeared first on The Motley Fool Canada.

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Inflation levels of the 1970s and 1980s are not likely to reappear anytime soon. However, inflation exceeding 2% to 3% would pose a significant challenge to savers across the country. Those with traditional savings accounts and even those with high-interest savings accounts would likely begin to lose purchasing power as the cost of goods and services increased faster than money could safely grow in savings accounts. On the other hand, these three stocks will provide a much better defence against inflation.

Equitable Group

Equitable Group (TSX:EQB) is probably best known as the owner of EQ Bank, one of the largest branch-less banks in Canada. EQ Bank routinely offers one of the highest interest rates on savings accounts in the country. However, EQ Bank’s current interest rate for savings accounts is 1.7%. This compares to inflation near 2% before the pandemic hit in March. Owning Equitable Group shares is therefore a better defence against long-term inflation.

Equitable Group reported Q2 2020 results last month. The company reported an 8% increase in deposit balances at EQ Bank, along with a 52% increase in customers. Equitable Group also declared a $0.37 per share quarterly dividend.

Equitable Group has increased the dividend from $0.20 per share in 2016 to $0.37 per share in 2020. That equates to an 85% increase to the dividend in four years. That will handily help preserve, and even increase, the purchasing power of the dividend over time.

Intact Financial

Intact Financial (TSX:IFC) is the largest property and casualty (P&C) insurer in Canada. This segment of the insurance market lends itself well to dividend growth. Car and home insurance are mandatory for many individuals. These are not optional expenses. One can forego life insurance despite the risks of doing so. However, you can’t legally drive in Canada without auto insurance.

Intact’s products and services therefore enjoy continued and predictable demand. Intact has slowly and quietly built a reputation for itself as one of the best Canadian large-cap dividend growth stocks.

Intact currently pays a dividend of $0.83 per share. This results in a dividend yield of just over 2%. Over the past 10 years, Intact has grown the dividend at an average annual rate of approximately 9%.

This means that you can expect the dividend to maintain the purchasing power that it currently has, even if inflation begins to pick up. If inflation remains low, expect the purchasing power of the dividend to significantly increase over time.

goeasy

goeasy (TSX:GSY) is involved in the alternative lending and merchandise financing business through the easyfinancial and easyhome brands. These two businesses will do well in a rising-rate environment because of the ability to pass on any increase in interest rates to customers. Similar to banks and other lenders, goeasy profits based on the spread between what it can borrow for and what it can lend to customers for.

goeasy has grown the dividend at an eye-popping average annual rate of 18% since 2010. Recently, goeasy increased the per-share dividend by $0.14, or 45%, from $0.31 to $0.45. goeasy is clearly trying to signal to the market that the company is serious about dividend growth.

However, goeasy announced this monstrous dividend raise back in February, before the economic shutdown began in March. Therefore, dividend raises of that magnitude may not be forthcoming in 2021. With that said, despite the pandemic and economic shutdown, expect goeasy to continue increasing the dividend regularly. Even if inflation significantly spiked, goeasy’s dividend will still likely increase in purchasing power over time.

Takeaway

Higher inflation may or may not be around the corner. If you’re concerned about the possibility of higher inflation eating into your savings and income streams, consider these great dividend-growth stocks.

Given that dividend growth stocks tend to be successful due to the profitable underlying business models, investors can also expect an appreciation in the share price of these companies over time.

The post Worried About Inflation? 3 Dividend-Growth Stocks To Protect You From Rising Prices appeared first on The Motley Fool Canada.

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Telus

Telus (TSX:T)(NYSE:TU) is one of the Big Three telecom companies in Canada. Telus also owns Koodo Mobile, a discount mobile carrier that is marketed quite heavily to students. Telus is unique among Canadian telecom companies in that Telus doesn’t have a media division or major investments in Toronto’s professional sports teams. This has proven to be a blessing during 2020, when media production and professional sports were halted.

Telus tends to be a favourite among dividend investors. Telus currently pays a quarterly dividend of $0.29125 per share. This results in a dividend yield of almost 5%. Furthermore, Telus has been consistently raising the dividend for over 20 years.

Telus had been raising the dividend twice annually every Q2 and Q4, for the past 10 years. However, Q2 2020 did not come with a dividend raise. Telus will likely continue raising the dividend, although maybe not at the pace of the past 10 years.

Apart from being a very stable company with both income and capital appreciation potential, Telus has exposure to the fast-growing healthcare IT sector, via Telus Health. Telus Health does not comprise a significant portion of Telus’s overall business. However, Telus Health can certainly grow into a much bigger piece over time. Telus therefore offers investors a good mix of income and growth.

Air Canada

Air travel is an essential component of the start of a school year for many university and college students. Students from across the country, and the world, come to various schools in Canada to begin their studies. Many of those trips are made with Air Canada (TSX:AC).

The school year in 2020 looks a lot different than school years of the past. Many schools have transitioned to an online model, at least for the fall semester. Air Canada will undoubtedly see a drop in demand for the months of August and September, compared to last year, as less students travel to schools. Unfortunately, Air Canada has struggled with low demand in general this year.

Air Canada’s revenue in Q2 2020 plunged approximately 90% compared to the same quarter last year. However, the airline has also trimmed operating expenses by over 50% compared to Q2 2019. Air Canada slashed approximately 50% of jobs and suspended 30 routes while closing 8 regional airport stations.

These moves should help Air Canada slow the cash hemorrhaging. However, Air Canada will eventually need demand to significantly pick back up for the company’s share price to be able to soar back to pre-pandemic levels. Unfortunately, nobody can predict when that will happen.

Takeaway

Make sure to keep an eye out for the CCB this week. If you do end up in the enviable position of having extra cash this month, consider adding Telus or Air Canada to your portfolio. The two have very different risk profiles currently, but both offer significant long-term return potential for patient investors.

The post Parents: The Canada Revenue Agency Is Sending Money Your Way This Week appeared first on The Motley Fool Canada.

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Great-West Lifeco

Great-West Lifeco (TSX:GWO) is one of the largest life insurance companies in Canada and has been around for over 125 years. The company is a relatively typical life insurance company. Great-West offers life and health insurance as well as asset management and investment services. Great-West does have some operations in the United States and Europe. However, most Great-West’s earnings come from Canada.

Great-West recently reported Q2 2020 earnings. Net earnings almost doubled from $0.49 per share in Q2 2019 to $0.93 per share in Q2 2020. These results were for the months of April-June. Therefore, Great-West appears to be doing a good job navigating the challenging environment in 2020.

Great-West currently pays a quarterly dividend of $0.438 per share. This equates to a starting dividend yield of just under 7%. Great-West raised the dividend $0.025 per share, or 6%, for the March dividend payment. However, this dividend increase was announced in February, before the economic shutdown began.

Therefore, investors will need to keep an eye on future announcements from the company to get an idea of whether there are plans for a 2021 dividend increase.

CIBC

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) (“CIBC”) is the smallest of the Big Five Canadian banks by market capitalization. However, CIBC has a long and storied history just like the bank’s larger peers. CIBC began operations in 1867 as the Canadian Bank of Commerce.

CIBC has relatively modest exposure to the retail and energy sectors. Retail companies account for just 3% of CIBC’s total loan portfolio. Additionally, energy companies only account for approximately 5% of the loan portfolio. This is going to provide some cushion for CIBC going forward, as the bank does not have significant exposure to these two struggling sectors.

CIBC pays a quarterly dividend of $1.46 per share. This results in a starting yield of just over 6%. CIBC increased the dividend for the Q1 dividend payment. The dividend was increased by $0.02 per share, or 1.4%. This raise was announced in February, before the full-scale economic shutdown occurred in North America. Therefore, it is unclear whether CIBC intends to raise the dividend again in Q1 2021.

Manulife Financial

Manulife Financial (TSX:MFC)(NYSE:MFC) is the largest insurance company in Canada by market capitalization and revenue. Manulife primarily operates in the insurance and wealth management spaces. Manulife’s roots go back to 1887, when the company was founded as The Manufacturers Life Insurance Company.

Manulife has a large presence outside Canada. Manulife owns the John Hancock brand in the United States and has a sizeable presence in Asia. Not even Canadian banks have significant Asian presence. Therefore, Manulife is geographically diversified far more than most other Canadian financial institutions are.

Manulife pays a quarterly dividend of $0.28 per share. This equates to a starting yield of around 5.5%. Manulife increased the quarterly dividend by $0.03 per share, or 12%, in February. This indicates that Manulife is committed to maintaining the generous dividend as well as increasing it.

However, the recent dividend increase came just before the March market crash. Therefore, investors should not expect such a large dividend increase in 2021.

Takeaway

GWO Dividend Yield data by YCharts

The market turbulence in 2020 has kept the share prices of Canadian financial stocks down. However, these low share prices present opportunity in the form of high dividend yields. Dividend investors looking for blue-chip financial stocks with high dividend yields should seriously consider Great-West, CIBC, and Manulife.

The post Bargain Alert: 3 High-Yield Financial Stocks on Sale Right Now appeared first on The Motley Fool Canada.

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One of these incentives is for zero-emission vehicles (ZEVs) and is called the iZEV Program. The iZEV Program offers purchasers or leasers up to $5,000 off the price of certain eligible ZEVs. The incentives are applied directly at the point of sale. This means that buyers will receive an immediate reduction in the price of certain ZEVs.

ZEV makers, such as Tesla, have seen a lot of success over the past year. However, this little-known Canadian company also stands to benefit significantly from the adoption of ZEVs. You may even consider using that $5,000 you save on a new ZEV to buy some shares of this company.

A global automotive leader

Magna International (TSX:MG)(NYSE:MGA) is a global automotive powerhouse. The company is a tier one automotive supplier and counts the largest names in the global auto industry as clients. Magna has a large presence in North America and Europe as well as a growing presence in Asia. Magna is poised to benefit from the adoption of ZEVs in several ways.

First, Magna supplies components for several ZEVs. For example, Magna produces the BMW i3 liftgate. The BMW i3 is one of the ZEVs that the iZEV Program covers. Ultimately, Magna stands to benefit as more customers release ZEVs, and Magna supplies components for those ZEVs.

Second, Magna owns Magna Steyr, a contract manufacturer of vehicles. If vehicle manufacturers don’t want to undergo the capital and operational complexity of producing a new vehicle, they can contract with Magna Steyr to build the vehicle for them. Magna Steyr does this in Graz, Austria. As some vehicle manufacturers enter the ZEV space, they may turn to Magna Steyr to build their initial ZEV models. This occurred with Jaguar and the Jaguar I-PACE.

Third, Magna has a diversified customer base. Magna supplies many different automakers in multiple regions around the world. Thus, if ZEV adoption begins to accelerate in one region of the world while taking longer to develop in others, Magna is still in a good position to capitalize on the overall ZEV trend.

Takeaway

The Government of Canada is ready to give you (or more accurately, your car dealer) up to $5,000 towards the purchase or lease of a ZEV. While this isn’t a direct payment that you can take to the bank, it may be a significant factor in your next vehicle purchasing decision.

An extra $5,000 that you don’t have to spend on a car is an extra $5,000 that you can invest for your future. If you invest that $5,000 and can obtain a 10% annual return on it, you can turn that $5,000 into $10,000 in just over seven years. There are several stocks on the TSX that can easily help you reach this goal. Magna certainly appears to be one of them.

The post The Government Wants to Give You an Extra $5,000 — But There’s a Catch! appeared first on The Motley Fool Canada.

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As borrowing costs dropped to stimulate the economy, the yields on safe investments, such as government bonds, also dropped dramatically. It is still difficult to come across safe, predictable, and stable income investments that will allow you to grow savings at a respectable rate. However, these two bank stocks might be a good place to start.

XGB Dividend Yield data by YCharts

Royal Bank of Canada

Royal Bank of Canada (TSX:RY)(NYSE:RY) (“RBC”) is Canada’s largest bank and currently pays a quarterly dividend of $1.08 per share. RBC has not missed a quarterly dividend payment since the bank started paying dividends. However, RBC has frozen the dividend in the past. Most recently, RBC froze the dividend between 2008 and 2010 following the financial crisis.

While this may be troubling for pure dividend-growth investors, this is not necessarily problematic from an income perspective. The bank continued to pay shareholders and those who purchased shares in 2008 were rewarded with one of the highest starting yields that RBC shares have offered since 2000. After this brief hiatus, RBC raised the dividend again in 2011.

This makes RBC suitable for retirees, or soon to be retirees, because RBC has been through turbulent times in the past and has continued to send dividends to shareholders. Those who require bond-like income that will hold up well against inflation are likely to find that RBC stock is a good fit because of the high starting yield and the high-single-digit dividend growth rate that the stock offers.

Toronto-Dominion Bank

The Toronto-Dominion Bank (TSX:TD)(NYSE:TD) (“TD”) is the Canadian bank with the largest presence south of the border. The bank actually has more retail locations in the United States than in Canada. However, the bulk of TD’s loan exposure is still to Canadian clients.

TD has a large exposure to Canadian real estate. Just over 25% of TD’s loan portfolio is to borrowers in the real estate sector. This segment of the economy has held up surprisingly well in 2020. Residential real estate prices in major cities have recovered to pre-pandemic levels, and sales volumes are increasing as well.

TD pays a quarterly dividend of $0.79 per share. TD has traditionally been the Big Five bank that has had the highest dividend growth rate over the past decade. The dividend growth rate has averaged around 10% per year since 2010.

While it is too soon to quantify how the pandemic may impact TD’s dividend trajectory, the bank is well positioned to continue paying and increasing the dividend.

Takeaway

XGB Dividend Yield data by YCharts

The falling yields on safer investments have forced income investors into riskier assets. Common stocks are, by definition, riskier than bonds. However, investors should be confident in the ability of RBC and TD to pay and grow dividends given the stellar history of the two banks.

In a world desperate for safe high-yield investments, it may not get much better than RBC and TD.

The post Retirees: 2 Bank Stocks to Buy As Bond Yields Continue to Fall appeared first on The Motley Fool Canada.

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