BNN - Monday, May 27, 2024 - 05:00 p.m. (ET) - Segment #1

Visit INFINITI.ca. ( ) (Dynamic instrumental music) >> Andrew: hello, there. Happy friday. Welcome to market call. Ryan bushell is on our show. He is president and portfolio manager at newhaven asset management and he is taking your questions on canadian dividend stocks. Great to see you, ryan. >> Thanks for having me, andy. >> Andrew: the toll free number 1-855-326-6266 or send an email to marketcall@bnnbloomberg.ca. So you are looking at just plain vanilla dividend stocks, not high income ETFs? You are more interested just regular equities? >> Yeah, we think it's an exciting time actually for our type of investing. We are seeing more mainstream coverage of the power demand need that is becoming evident in north america with we think the biggest part is re-shoring and manufacturing activity but there is also obviously a lot of buzz around A.I. and data centre demand which is incremental and helpful for our thesis but yeah, we can get still you know a 5% dividend yield on infrastructure focused investments primarily with now we think an accelerated growth trajectory ahead over the next decade in a market, the canadian market which is not overvalued relative to other markets because you know the s&p 500 has been sucking all the oxygen out of the building for the better part of a decade now but we think the next decade might look a little different. >> Andrew: my wife accuses me of sucking the air out of a room when I meet people. Sometimes I launch into political discussion immediately and she says I should ease up on that. >> So you're the nvidia at the party. (Laughter) >> Andrew: that's right. Commodities. Maybe we could put up a five-year chart for the bloomberg commodity index. What's your thesis there? I know it's hard to generalize. >> It is actually a general thing right now because I think what you have seen is you've seen 20% plus devaluation of currencies relative to inflation in the g7 over the last two or three years. And now that's changing the outlook for commodities. So very similar to the setup we had at the early part of this century, right, where you had big run in s&p 500, big run in technology stocks. Eventually gave way to some inflation created in the system and people starting to look for, you know, a commodity cycle and the last one was driven by, you know, china coming of age, the development of china. This one likely is driven by what we are talking about: power demand, electric vehicles, copper, lithium, you know, gold is catching a bid on the back of the central bank and government policies that are looking a little bit unsustainable. The setup for the tsx is looking pretty good we think in that direction. >> Andrew: ryan, great to have you on the show. Ryan bushell is our guest today. Ryan is president and portfolio manager at newhaven asset management. The topic: canadian dividend stocks. And there is number. 1-855-326-6266. Text on ScreenText on ScreenText on ScreenText on ScreenText on ScreenText o Discover amur capital. Amur capital's track record of consistent performance has delivered industry leading returns since inception. Why play games with your financial future? Choose amur capital - a Simpler Approach to Investing. ( ) You're just too good to be true Can't take my eyes Off of you ( ) Michelob Ultra. (Dynamic instrumental music) >> Andrew: we have an email from denis. The subject is stella jones. What do you think? >> Yeah, so it's partially participating in a thesis I talked about earlier of power death. They have a large utility pole business. Stock's done well as have a lot of components, manufacturers I'll call them. So hammmond power systems is another one. Companies that are making transformers and other electrical components that are feeding into this grid expansion that is coming. We prefer-- we don't know

how sustainable that is. You see these big runs up in the development cycle and then it might peter off. What we are looking for is that power demand that is going to be on and stay on. So the utilities and other infrastructure providers that are producing power that's going to be a need for the next few decades. We may not need the components in the quantities we are needing them now sustainably out for the future. So we are preferring to stick to the safer side but definitely part of that thesis as well. >> Andrew: so stella a provider of equipment for the power build-out not attracting you as much? >> Yeah, so it's a good company. For us, we are looking for clients to have a long-term sustainable return profile, right. And so especially when they are drawing from their investments, we need that return profile to be coming in every year consistently. We just can't have two good years. I am not saying that's what will happen at stella jones but you've seen a huge run-up and again that's where people get very excited about shorter term phenomenon that might be coming that might not last out five, 10, 15 years, which is what we are concerned with. >> Andrew: larry is calling from halifax. Go ahead, please. >> Caller:HI, ryan. How are you today? >> Great, thanks. How are you? >> What is your question, larry? >> Caller:I own algonquin power. I know you have liked it in the past. I haven't heard it on the bloomberg. I am hoping that somebody would answer the question that i-- I would like to add more. Would you-- >> Andrew: not sure if we lost larry. Algonquin power. >> And the question adding more. So the reason you don't hear a lot about it is when something is not performing well, people tend not talk about it. I am happy to talk about it. I think that the long-term for the company remains in tact. Obviously we have gone through a rough patch here where the strategic direction of the company got taken off course. I don't think that far. I think they were kind of a victim of, you know, the valuation for renewable assets went way up in 2021 and came way down. The company was proposing to do an acquisition in 2021 when interest rates were low and interest rates rose a lot. To me again, that's not necessarily-- those are shorter term phenomenon. When you look at the underlying assets of the business, it's utilities assets and power generation assets which we like and have a future for decades into the future. So for our clients, yeah, we have an averaging down at these levels. It keeps trying to poke its head up above nine and getting swatted back but eventually we think there will be a recovery. All they have to do is earn their regulated rate of return. Maybe restructure their portfolio a little bit. And you know, you will see the company re-rate. It will take some time. It's probably a five-year type of thing. Going back to altagas, another one of our favourite names we went through that on that company a few years ago. Bought a lot of stock down near the bottom and it's more than doubled from those levels. We think the playbook applies here. >> Andrew: okay. That's interesting. We will be talking more about altagas shortly. We have eldon, I believe, in powell river, bc. Go ahead, please. >> Caller:YEAH, good morning. Thank you for taking my call. >> Andrew: pleasure. >> Caller:MY question, I'd like to broaden out my portfolio. I would like to get into electricity. Capital power. And to pay for that, I made fairly good money on cibc which is almost at its peak for analysts. I am wondering if a guy should be selling out of the dividend when you're making 10 or 11 bucks a share and putting into something like capital power for the future. Thank you. >> Andrew: thank you. >> Yeah, so this is an interesting question, right. So not just a stock in isolation but a stock relative to another stock. For us, those decision are also driven by what else is in the portfolio. How-- if you own a lot of banks, then yeah, trimming some banks here we think to buy power producers makes sense. Capital power went on a similar ride. If we put up a longer term chart, you will see, you know, a big run up in 2020, 2021 and then a sell-off as they were part of the renewable greening of a power fleet thesis and the company's since lost that kind of premium multiple. We don't own capital power just because it's a little bit geographically constrained. We like a little bit more geographic diversification of regulators. There you see the big run-up in '22, and '23 and coming off there. Again it's at attractive level so it's definitely not a company we would ignore. In terms of switching out of cibc, yeah, we do think that makes sense if you have a lot of weight in banks. A lot of canadians do have a big weight in banks. We are underweight banks. We still think they're worth owning on a long-term basis. Maybe not a 25% weight. So if you are up in that vicinity, then this is a trade that we do think would make sense. We have some other ideas that I would like better than capital power that we can talk about later but certainly don't see any problem with that logic on a logical basis. >> Andrew: john is in london. Go ahead, please. >> Caller:THANKS, andrew, hello, ryan. Thanks for altagas by the way. I have another picks and shovels company. It's called ces energy solutions.

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