Motley Fool Canada Chief Investment Officer Iain Butler calls SmartCentres REIT (TSX: SRU.UN) a “perfect” stock to buy and hold in a TFSA for years to come. Hear him explain why in less than five minutes.

Prefer to read? There’s a transcript below.

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The Five-Minute Major, here to make you a smarter investor in about five minutes. Today, we’re discussing what could be one of the best TFSA stock options for your monthly passive income. The company is SmartCentres REIT, Walmart’s landlord throughout Canada. My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Always a pleasure to be here.

Nick: If you were looking to add reliable monthly income to your TFSA right now, and lots of people are, why does SmartCentres REIT stand out to you as a strong contender to have on your radar?

SmartCentres REIT is a ‘perfect, perfect, perfect’ idea for TFSA investors

Iain: That’s right, and rightfully so. It’s a tremendous tool that we Canadian investors have, the TFSA, and this is a perfect, perfect, perfect idea to just stick in there and leave it alone for years. So SmartCentres is anchored by necessity-based retail operations, and these operations provide tremendous stability in most, in almost all, economic environments outside a pandemic, which hopefully we don’t see again. Even then, this is a company that’s skated by relatively unscathed. So, strong results have been posted recently. They’ve got an industry-leading 98.6% occupancy rate.

And the dividend yield is currently about 6.7%, and that is a dividend that is paid monthly.

The tenant base, as indicated, is super resilient, anchored by big-name brands that perform well, regardless of the economic backdrop. These are brands that people go to every day, day in and day out.

The big name behind this company is Walmart. SmartCentres was actually born to be Walmart’s landlord, essentially, when Walmart came to Canada so many years ago. Walmart continues to be the anchor tenant for this company, and to SmartCentre’s benefit. They’ve got a very unique relationship there.

Growth potential for SRU.UN and its dividend

Beyond retail, this is a REIT that has been expanding elsewhere. They’ve recently opened three new self-storage facilities, bringing their total up to 14, and they’ve got some residential development going on. They own a big swath of land at the north end of Toronto, the city Vaughan. They’ve got a condo tower, which is already 93% pre-sold. This property is right adjacent to a newly constructed public transit hub. There’s a new subway stop there. This is sort of the next leg in SmartCentre’s evolution, this development of sort of mixed-use property.

Nick: You talked about SmartCentre’s strong history of dividend payments, really great numbers when you look at what you’re looking for from a REIT, great tenants. If you look to the future of those tenants looking to spend more in Canada, Walmart recently announced a $6.5 billion expansion. What does that mean for SmartCentre’s unit holders?

Iain: This is a story anchored by Walmart. Walmart accounts for about 23% of rental revenue for SmartCentre. And Walmart is building dozens of new stores, starting with five supercenters by 2027.

This is just gonna drive major anchor tenant demand and foot traffic to these properties.

The Walmart strategy builds on a previous $3.5 billion modernization investment, and it just shows that Walmart’s gonna keep growing, and they’re gonna bring SmartCentre right along with it. So, this is a great combination of excellent current dividend yield, 6.7%, and a significant opportunity for ongoing growth to those dividends, but just from a company basis as well, which is perfectly suited to sticking in one’s TFSA and just leaving it alone.

Nick: That’s right, so if you’re looking for monthly income, this may not be the biggest performer in your portfolio in terms of percentage return, but reliable income checks each month, with really a growth story that’s still intact.

Iain, thanks so much for joining us for this edition of The Five-Minute Major. Reminder to our viewers, if you want more stock ideas from us, click on the icon in the upper right of your screen. Thanks for joining us for this episode of The Five-Minute Major. Hope to see you next time.

The post The Top TFSA Stock for Monthly Income in 2026 appeared first on The Motley Fool Canada.

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• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market

Fool contributor Iain Butler has positions in SmartCentres Real Estate Investment Trust. Fool contributor Nicholas Sciple has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

Using a TFSA as a mere savings account is a terrible idea. Proper use of the account can create a comfortable retirement for Canadians — but you have to invest money in the account to unlock its full potential. (How does $4.7 million sound?)

Here’s how to get started investing in a TFSA for 2026.

Prefer to read? There’s a transcript below.

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The Five-Minute Major, here to make you a smarter investor in about five minutes. Today, we’re discussing the new 2026 TFSA contribution limits and how to invest that new room. My guest today is Hidden Gems Canada Lead Advisor, Jim Gillies. Jim, thanks for joining me.

Jim Gillies: Thank you for the invite, Nick. I love the TFSA, and I’m thrilled to be talking about it today.

Nick: Happy New Year, everybody! It is officially January, which means the CRA has handed Canadian adults the new TFSA contribution room. What do investors need to know about these new numbers, and more importantly, what is the biggest mistake you see people making when they invest in their TFSA?

Jim: Oh, boy, do I have some thoughts, Nick. The TFSA, of course, stands for Tax-Free Savings Account, and there are two important things to take away from the name there. First of all, the tax-free’s the good part.

What is the TFSA contribution limit for 2026?

But we’re gonna talk about the problem in a minute. But, okay, so you’re getting $7,000 of contribution room. You’re not getting free money here, but it’s money that you can contribute and save for the future for your retirement years, or for your future just in general, if you don’t particularly want to retire, or whatever.

This started back in, I think, 2009, 2010, with I think it was $5,000 of contribution room, and it was indexed to inflation, moving in $500 increments.

So if inflation was 2% a year, 3% a year, you know, about after four or five years, it went to $5,500, then it was $6,000, it was briefly $10,000; that’s a whole political thing.

Last year was $7,000, this year’s gonna be $7,000. Probably, if inflation follows its current path, it’s gonna be about $7,500 next year. So you’ve got all of this contribution, and it’s cumulative.

If you’ve not filled your prior contribution room, get on that, okay?

Biggest mistake Canadians make with TFSA accounts

The second thing is a disturbing number of Canadians do not use the TFSA.

And the TFSA is the most powerful wealth-building tool that you have in your Canadian savings arsenal, yes? Above the RRSP, okay?

Especially if you’re a younger Canadian, TFSA should be absolute your top priority. Now, the problem with the name: I hate the name “Tax-Free Savings Account.” This is not a savings account. This is a wealth-building tool, and I hate when I see [that] roughly, just over half of Canadians have TFSAs. And the ones that have it, about half of them use it as a savings account, so they throw it in money, they make it in cash, might earn 2 or 3%, they throw it in GICs. It’s terrible! No! No! This is a wealth creation tool, okay?

How much money can you make in a TFSA over time?

So, steady contributions. And for example, if you were 20 years old today, and you started today, and let’s assume inflation for the next four decades, 40 years, is 2%. And let’s assume you can earn roughly 10%, which is roughly the stock market’s return since the modern-day annualized return. If you start at age 20, go to age 60, maximize your contribution every year. Figure out what you need to do, or figure out what you need to contribute every pay period. Again, the contribution room goes up in $500 increments following CPI. So let’s assume CPI is 2%, you fill out your contribution total, you make 10% returns. Over a 40-year period, you will have contributed about $450,500.

The value of that account in 40 years will be just shy of $4.7 million. Okay? Tax-free. You will owe nothing to the government.

That is why I hate the term “savings account.” This is not a savings account.

Maximize your contribution, invest it, never touch it.

You will have a wonderful retirement.

Where to invest in a TFSA in 2026

Nick: Okay, Jim, so maximize your contribution. This is a wealth-building vehicle. You shouldn’t be holding cash in your TFSA, so that leads us to another question. What should you be holding? What would you be investing this new TFSA room, this new capital, into your TFSA portfolio in 2026? What investments would you be looking at?

Jim: I mean, obviously, it’s personal, everyone’s gonna be different, okay? But I’m gonna say two things. One, first, No. 1, the biggest risk with a TFSA is not contributing, not making use of the incredible tool. The second-biggest risk is not taking enough risk. This is not a savings account, don’t put it in GICs, don’t keep it in cash.

I’m just gonna take this approach for a new investor, or my son. My son is 21 years old, we’ve been contributing since he was 18. Okay, it’s his money, not mine.

If you do nothing else — and I would encourage you to do nothing else before you have $100,000 in this account — but if you do nothing else, contribute to index-hugging ETFs. So, get one that tracks the Canadian market, so that’s the TSX60. (TSX: XIU), I believe, is the one that tracks it. That’s XIU on the Toronto Stock Exchange.

As well, you want to track the S&P 500. There’s a host of S&P 500 tracking tools. And then maybe if you even want to add in a little Pan-Asian, Pan-European, index as well, I believe XEF (TSX: XEF) is the one on the TSX that iShares offers. And if you did a 25%, 50%, 25% allocation across those three, and then never touch it, keep on adding every year when a new contribution room comes up, DRIP all your dividends — that means reinvest your dividends automatically, you can get your broker to do that for you — you will have an obscene amount of tax-free money, tax-free capital, by the time you hit 60, [if you’re] using this as a wealth creation, retirement tool, and not a savings account.

Nick: Yeah, it’s great advice. This is a wealth creation tool. Participate, and try to participate in the stock market if you can. That’s all our time for this edition of the Five-Minute Major. If you want more stock and investing ideas from us, click on the info icon in the upper right-hand corner. Until then, thanks for joining us, and Fool on!

The post TFSA 2026: The $109,000 Opportunity and How Canadians Should Invest It appeared first on The Motley Fool Canada.

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Fool contributor Jim Gillies has positions in iShares Core Msci Eafe Imi Index ETF and iShares S&p/tsx 60 Index ETF. Fool contributor Nicholas Sciple has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Think you can’t make money investing in stocks everyone’s heard of? Think again. Here are three (admittedly boring) Canadian blue chips everyone should consider owning in 2026.

Prefer to read? There’s a transcript below.

Canadian Stocks to Own in 2026

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The 5-Minute Major, here to make you a smarter investor in about five minutes. Today, we’re discussing “The Unsexy Portfolio for 2026.” My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Great to be here, as always, Nick.

Nick: Everyone has been chasing the next big AI stock in 2025, but today we’re looking in the opposite direction. What is this “unsexy portfolio” strategy, and what are some of the names you’re looking at for 2026?

Iain: There’s a line that flies around the investing industry that “you don’t get points for difficulty,” and I think that’s what we’re kind of offering here. So while the market chases hype (I mean, we love hype as much as anybody), but for our purposes here, we’re thinking about companies that are dominant in their industry.

They pay us “rent” through dividend payments to own them. So our goal is to create a stress-free collection.

It’s gonna provide a market-topping dividend yield that will go a long way to help alleviate any economic stability that we come upon in the year and years ahead.

So, two companies that we’ve followed for years nicely meet this criteria. The first one we’ll classify this one as a cash cow.

2 Stable Dividend Stocks for Canadian Investors to Buy Now

It’s Canadian Natural Resources (TSX: CNQ). This is not just one of North America’s largest oil producers.

It’s essentially a factory that prints money as long as the price of oil remains above $40 a barrel. CNQ is a dividend aristocrat: 25 years of consecutive increases, currently yields more than 5%.

Second stock: CN Rail (TSX: CNR). And if we’re gonna call CNQ a cash cow, let’s call CN Rail the backbone. That’s exactly the role that railroads in general play in the North American economy. CN Rail’s stock has been under pressure during 2025.

It currently trades at a multiple about as cheap as it gets, historically, and that just means that not only are we set to benefit from the ongoing sort of mid-single-digit growth that this company books year in and year out, but multiple expansion is likely going to play a role in our long-term returns as well.

In addition, CN’s 2.6% current dividend yield is money in the bank, and while the yield doesn’t necessarily jump off the page, like CNQ, CN Rail has religiously increased that dividend on an annual basis, meaning, in the years ahead, our effective yield is very likely to grow from that point.

Nick: Two strong, defensive, stalwart companies in Canada. But for an investor who, you know, likes things to get a little bit spicy — wants to juice their passive income opportunity — are there any picks that offer higher yields, perhaps with a bit more risk, that are on your radar as we enter 2026?

1 Riskier Dividend Stock to Consider for High Yield

Iain: Sure, and I mean, just like hype, who doesn’t like a bit of spice? Our controversial pick, let’s call it, has a massive 9.5% current yield, and the market has really punished this company as questions have arisen around the sustainability of its current dividend.

We’re talking about Telus (TSX: T), the big Canadian telecom company.

Telus has addressed the market’s concerns head-on, in my opinion, by pausing its planned dividend growth.

And we’re comfortable that the company’s forecasted free cash flows will indeed be enough to cover the dividend that exists. We’re of the mind that the current stock price bakes in a worst-case scenario, and we just don’t foresee that playing out. On its own, the current dividend yield of more than 9% could well be enough

to provide a market-beating return in the years ahead. So that’s, that’s three

pretty well-known companies. A lot of people don’t think you can make money with well-known companies. We disagree strongly with that. So we combine the three, we’ve got Telus, CNQ, and CNR with a blended yield of roughly 5.9%. It’s a tax-efficient and a diversified collection.

Nick: Yeah, may not be the sexiest group of stocks, kind of fits the description of the list, but certainly companies that will let you sleep at night and provide passive income as you move into 2026, where there are some concerns around economic weakness that could weigh on some of the high flyers we saw this past year.

Iain, thanks so much for joining us for this edition of The Five-Minute Major. A reminder to our viewers, if you want more stock ideas from us, click the icon in the upper right-hand corner.

Thanks for joining us, and we’ll see you next time. Fool on.

The post The Least Sexy Stocks for 2026 (Don’t Even Think About Buying These Unless You Want to Make Money) appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has positions in Canadian Natural Resources and TELUS. Fool contributor Nicholas Sciple has positions in Canadian Natural Resources and has the following options: short January 2026 $27.50 puts on Canadian Natural Resources. The Motley Fool recommends Canadian National Railway, Canadian Natural Resources, and TELUS. The Motley Fool has a disclosure policy.

Telus announced a major change in its dividend strategy: It is stopping regular increases in its dividend while maintaining the current rate. What does the news mean for Telus investors? Motley Fool Canada breaks it down in this short video.

Prefer to read? There’s a transcript below.

Nick Sciple: I’m Motley Fool Canada Senior Analyst Nick Sciple, and this is The Five-Minute Major, here to make you a smarter investor in about five minutes. Today, we’re discussing Canadian telecom giant Telus’s recent strategy update, including management’s decision to pause their dividend growth strategy.

My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Great to be here, Nick.

What’s going on with Telus’s dividend?

Nick: So as I teed off with in the intro, Telus dropped big news this week around its plans for its dividend and future growth outlook for its business. What does all this news mean for shareholders?

Iain: Yes, indeed. So, eyebrows have sort of been raised over Telus’s dividend, as illustrated by the more than 9% yield at which the stock has been trading in recent weeks. And this week, the company attempted to calm the market down with some announced alterations.

So, the dividend remains as is, which is great news. However, the company’s pledge to continually increase that dividend is now off the table. They’ve just deemed it sort of ridiculous to need to continue upping the dividend when the stock already yields 9%. In addition, the Dividend Reinvestment Plan, or DRIP, short term, is going to change as well. For those that don’t know, a DRIP is when shareholders elect to receive shares at a discount to the market price in lieu of a cash dividend payment.

But with shares of Telus trading as they are, this discount is going to be stepped down to nothing over the next 6 to 12 months.

Telus’s free cash flow targets

Management also released free cash flow targets (helping to calm the market down) for the next three years to provide further confidence that the company is indeed able to support the current dividend. Free cash flow is expected to grow at a 10% annualized rate between 2026 and 2028, with $2.4 billion, or $1.56 per share, in free cash flow and an annual dividend commitment of $1.67 in 2026. The payout ratio will drop below 100% by 2027,and should continue to decline from there. And I think for 2026, when there’s a bit of a shortfall, the company has the financial flexibility to cover that temporary gap.

Those are the details.

Nick: The big headline news there being Telus, a company that had increased its dividend payout on a semi-annual basis, going back for over a decade now, back to the early 2010s. Now, those dividend increases are going away. Maybe some increases to come in the future, but certainly not going to be on a regularly scheduled program that investors have gotten used to. So with this change in the dividend policy, do you view this as a red flag for the business, or if you’re a long-term shareholder, could there be a silver lining here?

What the dividend changes mean for Telus investors

Iain: I think what we’ve actually been left with is somewhat of a conundrum, and this is causing my brain to hurt, frankly. Historically, Canada’s big three telco companies, that’s Telus, Rogers, and BCE, have traded pretty closely together in terms of valuation. Today, though, Telus’s dividend yield of about 9% looks absolutely enormous relative to the 3.8% yield offered by Rogers and BCE’s 5.4% yield.

And if indeed Telus’s dividend is sustainable, which management is telling us that it is, that 9% yield should look a lot more like the yields offered by BCE and Rogers. For that to happen, though, the stock would have to appreciate to more than $32 per share from the current $18.73 as we record this, for Telus to offer that 5%ish yield with the current dividend payment.

That’s well and good, and what a great stock move that would be. Problem is, if Telus were to be priced at $32, its enterprise value to EBITDA ratio would be about 16.4 times, and that is up from the current 11.4 times. 11.4 times is already a 40% premium to what BCE and Rogers trade at.

And 16.4 times would represent more like a 100% premium. Historically, over the past 10 years, Telus has traded for an average premium of about 18%.

So something’s gotta give here. Telus should not offer the yield that it does, over its telecom peers.

However, if it were to trade in line on the yield front, the stock is going to look ridiculously overvalued, again, relative to its peers. So, the most obvious solution for me is for that EV to EBITDA multiple to come down. To do so, Telus could reduce its debt. That would bring the enterprise value lower. This will not happen overnight. The debt is sizable, and again, they’re gonna have a gap on free cash flow in 2026 relative to the dividend. So, good chance this yield spread isn’t going to disappear anytime soon, but when that ratio declines below 100, it means there will be cash to pay down the debt. Telus also has a bunch of assets within it that it can sell, and they’ve made mention that they are trying to offload some assets, and the chunk of cash that would come from an asset sale would also help to reduce the debt.

Bottom line, though, I don’t know that you’re going to get a lot in terms of company growth out of Telus over the next three years.

Maybe that means not much in terms of share price appreciation, but for yield-hungry investors, to me, I think this week’s announcement makes it a really attractive situation. I mean, a 9% pretty near guaranteed dividend payout is what income investors sort of dream of. So I think dividend investors should be very interested in this week’s development out of Telus.

Nick: Yeah, there were some questions around sustainability of that dividend. Now, shareholders can, if they believe what management has told them, believe that that dividend should remain in place. 9% dividend yield, certainly attractive in this environment where the risk-free rate is in that low 4% range.

That’s all the time we’ve got for this edition of The Five-Minute Major. A reminder, if you want more stock ideas from us, please click on the info icon in the upper right-hand corner. Hope to see you next time. Until then, thanks for joining us, and Fool on!

The post 9% Yield: Is Telus’s Dividend Safe? appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has positions in TELUS. Fool contributor Nicholas Sciple has positions in Rogers Communications. The Motley Fool recommends Rogers Communications and TELUS. The Motley Fool has a disclosure policy.

Premium content from Motley Fool Canada

Fellow Fools,

There’s a groundswell of change happening across our nation, as Canadians unite in response to challenges posed by our southern neighbors.

Our government is taking decisive steps to protect and assert our economic interests, from imposing counter-tariffs to exploring alternative energy alliances. And Ottawa’s strategic actions are echoed by the everyday decisions of Canadians like you.

Recent surveys reveal that 85% of Canadians are ready to swap U.S. consumer goods for homegrown alternatives. And even though Canadians spent more than US$20 billion traveling to the U.S. last year, a recent survey revealed that nearly half of Canadians would rather alter their travel plans than visit the United States.

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Billionaire Prem Watsa is often described as “the Warren Buffett of Canada,” and his company, Fairfax Financial (TSX:FFH), is indeed a lot like Buffett’s Berkshire Hathaway. Fairfax is a holding company that owns a number of companies — mostly insurance businesses.

Fairfax has two main ways of making money:

1. Insurance. The company had record underwriting profits of $1.8 billion on record gross premiums of $33 billion in 2024.
2. Investments. Fairfax’s investment portfolio has grown from $39.3 billion in 2017 to $67.4 billion in 2024. Fairfax generated record interest and dividend income of $2.5 billion in 2024. (That’s an increase in interest and dividend income of 316% since 2017.)

The best part for long-term shareholders is that those increased earnings have been spread out over fewer shares. Fairfax has reduced the number of shares available by almost 22% over seven years, from 27.8 million in 2017 to 21.7 million in 2024, which has returned capital to investors. Watsa currently owns more than 9% of the outstanding stock.

Despite Fairfax’s stock gaining 48% in 2024 (excluding the $15 per share dividend), it remains reasonably priced today at 1.2 times its book value per share. And when you combine insurance profits and timely investments, the business should be able safely earn around $4 billion per year. That means the company is trading below 10 times earnings. As a bonus, Fairfax’s global insurance operation and investment shop face little impact from the escalating tariff wars.

The post Made in Canada: 5 Homegrown Stocks Ready for the ‘Buy Local’ Revolution [PREMIUM PICKS] appeared first on The Motley Fool Canada.

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Fool contributor Buck Hartzell has positions in Berkshire Hathaway, Fairfax Financial, and Nike. Fool contributor Nick Sciple has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fairfax Financial. The Motley Fool recommends Berkshire Hathaway, Nike, and Walmart. The Motley Fool has a disclosure policy.

The Canadian stock market has been wary of a on-again, off-again trade war with the United States ever since Donald Trump recently won reelection.

Motley Fool Canada analysts Iain Butler and Nick Sciple see opportunity amid the volatility and share two stock ideas that look undervalued among all the confusion.

Prefer to read? There’s a transcript below.

Transcript

Nick Sciple: I’m Motley Fool Canada senior analyst, Nick Sciple, and this is “The Five-Minute Major,” here to make you a smarter investor in about five minutes. Today we’re discussing tariffs and how investors can respond to them. My guest today is Motley Fool Canada Chief Investment Officer Iain Butler. Iain, thanks for joining me.

Iain Butler: Always awesome to be here, Nick.

Canadian tariff situation as of March 4

Nick: As I’m sure many of our viewers have seen, at midnight on March 4, the United States enacted 25% tariffs against both Canada and Mexico, along with additional tariffs on China. In response, Canadian Prime Minister Justin Trudeau announced a 25% tariff levy on CAD$30 billion worth of U.S. imports effective immediately, with tariffs on another CAD$125 billion in U.S. goods set to take effect in 21 days. Iain, tariffs have been a topic of debate ever since Donald Trump was elected United States’s president. Now they’re here.

How are you responding to this escalating trade war as an investor in Canada?

How Canadian investors can respond to the tariffs and the trade war chaos

Iain: Well, part of what I’m doing is shaking my head out of confusion because it’s really not clear what the end goal here is, but we do as we always do: We look for opportunities when these situations hit, and I mean uncertainty is the name of the game here, Nick.

As you say, March 4, the tariffs came through just before we were about to record this.

Headlines are hitting that they’ve paused auto tariffs for the next 30 days. Now I don’t know what the magic behind 30 days is, but it just goes to show that I don’t know that anybody really has a clear game plan in mind for where we’re headed. It reminds me of a number of situations over the course of my career. I can think of an accounting change that happened to Canadian companies, where it seemed like a very, very big deal at the time.

But [the situations] just kind of tend to melt away into nothing. These companies are adaptable. They do need to know the rules of the game. So there’s some confusion over that right now, but I think once the once the rules get sorted, companies will adapt, and they’ll carry on. These are living, breathing entities with smart people behind them, and they can adjust to whatever comes their way. So we look for opportunities. If there are market wiggles in this situation, fantastic, because again, companies will adapt. And all this tends to mean is that we’re able to buy them at cheaper prices than we otherwise would be able to do.

How investors can cope with market uncertainty

Nick: Hey, Iain, you mentioned uncertainty. The market hates uncertainty. It makes the market fearful. Warren Buffett, a famous investor, always says investors should be greedy when others are fearful. I don’t know about you; seems like the fear meter is a lot higher than it’s been in a long time. What opportunities are you seeing to buy amid this chaos and fear in the market?

Iain: The go-to strategy for me whenever the fear meter jumps like this (and I might just also add to that, that uncertainty is another name of the game we’re dealing with. The future, after all, is entirely uncertain), but when these schisms occur, high-quality companies can go on sale. High-quality companies rarely ever go on sale just based on their own fundamentals, just because they’re consistently strong. But when the entire market goes through a wiggle, you can get some really great companies for better than you otherwise would be able to get.

2 stocks to buy when everyone’s talking about a trade war and tariffs

Iain: One that I’ve got my eye on is CN Rail (TSX:CNR), one of the dominant rail companies in North America. Obviously they are impacted by North American trade.

Nobody’s sure how they might be impacted. But right now you’re able to buy that stock for about 17 times forward earnings. That’s lower than the 10-year average, and during that 10-year period there was a pandemic, if you recall. So 17 times forward earnings. 10-year average is 19 times.

This is a company that pays a 2% to 2.5% yield right now, which again, is better than usual. It’s a dividend grower, stock buyer-backer, a great company. I know that you’ve got another along those lines as well, Nick, to put forward.

Nick: Yeah, again, just attractive assets in the Canadian market that for a decade-plus has been able to invest and return capital to shareholders, and I think those assets are going to be valuable 10 and 20 years down the line. The company that’s on my radar is Canadian Natural Resources (TSX:CNQ), ticker CNQ in both the U.S. and on the Canadian exchange. It’s the No. 1 oil producer in Canada and the second-largest natural gas producer in Canada.

Obviously, with these tariffs in place, and Canadian oil and gas being a significant part of Canadian exports to the U.S., there’s some concerns around how tariffs are going to affect the business. However, you look at the stock today in response to some of that uncertainty, it has traded down to the point where you’re looking at a double-digit free-cash-flow yield. The dividend is up close to 6%. This is about as cheap as you’re going to get this company in a kind of a normal operating environment. Obviously, the pandemic a few years ago was a not normal operating environment.

If I look out long term, I don’t think these tariffs on Canadian oil and gas are going to be in place for a significantly long time, because of how important they are to the U.S. refinery system and how unpopular it will be to impose additional higher gas prices to American consumers. So I think Canadian Natural Resources is kind of getting thrown out with the bathwater because of some of this concern around tariffs. I think now is an opportunity to buy a really high-quality Canadian company at a cheaper price.

Iain, I’m getting played off here — getting the Oscars music. This is all the time we have for this edition of “The Five-Minute Major.” Thank you for joining me, and we hope everybody will see us next time.

The post Trump Tariffs: 2 Canadian Stocks That Could Profit From the Chaos appeared first on The Motley Fool Canada.

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Fool contributor Iain Butler has positions in Canadian Natural Resources. Fool contributor Nick Sciple has positions in Canadian Natural Resources and has the following options: short January 2026 $27.50 puts on Canadian Natural Resources. The Motley Fool recommends Canadian National Railway and Canadian Natural Resources. The Motley Fool has a disclosure policy.

This show originally aired April 3.

Transcript

I think we got to start off with the WWE (NYSE:WWE) deal last night, announced that Endeavor Group Holdings (NYSE:EDR) and WWE have agreed to a merger whereby Endeavor is going to spin off its 100 percent interest in the UFC Ultimate Fighting Championship into a new company which will have the ticker TKO and that company is going to be owned 51 percent by UFC Endeavor shareholders, with the other remaining 49 percent being held by WWE.

Those are some magic numbers because to make this Reverse Morris Trust structure or work legally Endeavor had to keep 51 percent of the company at the end of the day. But the transaction is expected to close in the second half of the year, then the CEO of the new company is going to be Endeavor’s current CEO Ari Emmanuel. He’s going to remain as the CEO at Endeavor as well, You’re going to retain the current WWE management and it will be the president of the wrestling division of this new company, Vince McMahon will be the executive chairman of the company just as he is of WWE. And you’re going to retain Dana White as the president of the UFC side of the business, so essentially you’re smashing together two unique, valuable sports media properties.

If you think about what UFC has done for ESPN Plus, they are really the anchor property that’s driven a large amount of subscriptions to that platform. If you look at what WWE with the WWE network has done for Peacock has really been a content vector for bringing a lot of new eyeballs onto that platform.

Another thing that’s interesting, for both of these companies, the driver of the business is media rights deals. In the case of UFC, it’s the rights deals with ESPN. In the case of WWE it’s with Peacock and Comcast on USA Network and Fox.

If you remember what Jim [Gillies] and I have talked about the [investing] thesis for WWE for quite a while. Either A, they’re going to go get acquired — well that happened! Or B, the driver of the stock will be this next round of video rights negotiations.

It looks like we got both of those things because we’re going to retain WWE as a public company and to the extent these new rights deals move up, then maybe the stock will come along except now, it’s not just WWE negotiating for these deals. You’ve combined it together with another extremely valuable property. Now, WWE’s rights deal, I think the current rates deal that will actually end where it could transition to a new group in ’24 for the UFC. They had signed a five-year deal with ESPN in 2018, if my understanding is, they signed an additional two-year extension. That agreement is going to be up in ’25. You could tell a story where in ’24, you’ve got Nick Khan, who was one of the best agents in Hollywood before he was the ahead of WWE, was the head of the CAA. That sports media rights segment of that business represented a lot of significant sports media folks — you might be familiar with Al Michaels, folks like that.

Do you think about the leadership at Endeavor? These are also really high-powered sports agents. Ari Emmanuel, if you’ve ever seen Endeavor, have you seen Ari on Entourage, that’s Ari Emmanuel. You’ve got two extremely valuable properties that have proven. I guess at ESPN and Peacock in the past and you have the people negotiating these deals. They’re probably the highest-powered sports agents in the world. If there’s anybody who can maximize the rights of those deals it’s probably going to be these folks.

I think that’s the story going forward with the stock. Now, it’s interesting to see the stock moving down a little bit this morning. Jim, your thoughts seeing that and thoughts seeing the deal. I probably talked for too long already.

The rest of this video is available to Motley Fool Canada premium members. Want to join? Learn more about our flagship investing service, Stock Advisor Canada.

The post What’s Next for WWE Stock? appeared first on The Motley Fool Canada.

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Fool contributor Nick Sciple has positions in World Wrestling Entertainment. The Motley Fool recommends World Wrestling Entertainment. The Motley Fool has a disclosure policy.

Premium content from Motley Fool Stock Advisor Canada

It’s not often that a company becomes a more compelling investment after its founder, Chairman, CEO, and controlling shareholder resigns in the wake of a scandal. Nevertheless, that’s the situation we find ourselves in today with World Wrestling Entertainment (NYSE:WWE).

On July 22, Vince McMahon “retired” as chairman and CEO of WWE (though he remains controlling shareholder). After announcing an internal investigation in June, the WWE board of directors uncovered $19.6 million in payments that were not appropriately recorded as expenses in the period from 2006 to 2022, including $14.6 million paid by Mr. McMahon to women to settle sexual misconduct allegations. Mr. McMahon has agreed to personally pay all reasonable expenses arising from the investigation as well as the payments that are the subject of the investigation. This scandal is a stain on Vince McMahon’s reputation and harmful to WWE’s public image, but, ultimately, the payments are not of a material amount for a business that today generates over $1 billion in annual revenue.

Vince McMahon had been instrumental to WWE’s storytelling for decades, but there are signs that his departure may have been a case of addition by subtraction. With McMahon in retirement, Paul Levesque (better known as TripleH) has been promoted to Chief Content Officer, taking creative control of the brand. Since then, interest and ratings have soared.

In August, Monday Night Raw ratings hit a two-year high, while Wrestlemania 39 broke ticket sales records, selling 90,000 tickets within 24 hours — a 42% increase year over year. According to reports, network partners have been “thrilled” with the results since TripleH became head of creative. In short, the value of WWE’s intellectual property arguably has grown in the last few months.

Meanwhile, we remain confident in management’s ability to capture that value. Newly promoted co-CEO Nick Khan continues to negotiate new rights deals with media partners. In September, WWE extended its Caribbean broadcast partnership with C&W Communications and signed a deal with Foxtel to make it the exclusive home for WWE in Australia. In addition, WWE’s second-day rights deal with Hulu has expired, positioning the company to include those rights as part of the bidding for its next extension of Raw and Smackdown coming up next year.

On the consumer products side, WWE relaunched WWE Shop in partnership with Fanatics, positioning the company to offer more products while bearing less of the overhead expenses. In addition, partnerships with Panini in trading cards and Fox’s Blockchain Creative Labs in NFTs continue to expand the ways WWE can monetize its content.

WWE reported record second-quarter revenue and adjusted OIBDA in August, reflecting the strength of the business. With the brand continuing to gain momentum post-Vince McMahon’s departure, we think the company is poised to become even stronger. And, with the largest shareholder now “retired,” the chances that WWE gets acquired are likely higher today than they were a few months ago. Against all odds, the founder resigning in scandal arguably has made our thesis even stronger. Consider adding to or starting a new position in WWE today.

Nick Sciple owns shares of World Wrestling Entertainment. The Motley Fool recommends WWE.

The post Just Released: The 5 Best Stocks to Buy in October 2022 [PREMIUM PICKS] appeared first on The Motley Fool Canada.

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Premium content from Motley Fool Stock Advisor Canada

Women’s fashion boutique Aritzia (TSX:ATZ) is becoming one of the world’s premier brands.

Founder and Executive Chairman Brian Hill remains engaged in building out Aritzia’s real estate footprint, positioning the company for continued growth in the United States. Historically, the business has grown revenue at a roughly 20% compound annual growth rate (CAGR), which it is likely to continue in 2022: full-year guidance calls for 25-27% revenue growth.

With no debt (excluding leases) on the balance sheet and robust free cash flow, the company is deploying cash toward share repurchases for the first time in three years. In fact, on its July 7th earnings call, CFO Todd Ingledew said that Aritzia was increasing its pace of share repurchases “given market conditions.”

More than the financial results, though, it’s clear that the brand is resonating with customers — the company is making the rounds on TikTok videos.

As Aritzia continues to get “more famous” across North America (and likely across the world), we think customer enthusiasm will translate to robust business results for years to come. Consider buying shares and joining the ride!

The Motley Fool recommends Aritzia.

The post Just Released: The 5 Best Stocks to Buy in September 2022 [PREMIUM PICKS] appeared first on The Motley Fool Canada.

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