Ryan Bushell, Chief Executive Officer & Portfolio Manager, Newhaven Asset Management
Focus: Canadian dividend stocks
Top Picks: Premium Brands, Canadian Natural Resources, Telus
MARKET OUTLOOK:
We remain confident in the collection of quality dividend paying companies we hold while being very cautious on broader equity markets and alternative assets.
There are acute signs of stress in certain real estate, credit, and equity markets alongside global supply chain problems, and inflationary impacts stemming from the ongoing conflicts in the Middle East and Ukraine.
Even if one or both of these conflicts comes to an immediate ceasefire, it is unlikely to bring lasting peace to either region, while the supply chain disruption will be felt for years into the future.
Canada is well positioned to securely supply the world with a plethora of essential commodities. It is our sincere hope that our collective political will is now more aligned with building the critical infrastructure needed to realize our potential.
When we developed our thesis to concentrate on North American energy infrastructure companies domiciled in Canada many years ago, the companies we were buying were out of favour and undervalued, leading to the outsized returns experienced in Newhaven portfolios over the last 24 months.
As we look ahead, our thesis remains intact and likely enhanced by current events. We look forward to ongoing growth ahead for our portfolio companies that will flow into our accounts each quarter in the form of steadily increasing dividends.
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TOP PICKS:
Premium Brands (PBH TSX)
Premium Brands recently completed an acquisition and capacity expansion that will better allow them to supply Costco in the U.S. on an ongoing basis.
For a smaller Canadian company the capital expenditure involved in adding this capacity was significant but not dissimilar to building a pipeline that can now deliver a steady flow of product to a reliable customer for years to come.
The shares have come off recently on concerns about inflation and consumer spending; we see this as an opportunity to add.
Canadian Natural Resources (CNQ TSX)
It’s our view that oil prices are structurally higher following the conflict in the Middle East.
Consumers of oil and especially gas will be looking for secure supply options going forward and CNQ has some of the most stable supply anywhere in the world.
The natural gas opportunity in CNQ is underrated and will likely come into focus over the next decade.
In the meantime you have a company that will soon be returning 100 per cent of free cash to shareholders in the form of dividends and share buybacks.
The oil price may very well falter in the months ahead but CNQ is a company worth owning for decades into the future.
Telus (T TSX)
I know I am screaming into the wind on this one but I think Telus is extremely oversold.
Victor Dodig is a great leader and the company has been cut in half from the highs.
Long term, the data pipes they own have value that will be realized indefinitely as there is no better technology than fiberoptic cable to transmit data.
This may not turn around in the next 12 months even, and they may cut the dividend, but I have very little doubt that it will be higher in five years’ time and you will have collected a nice dividend payment along the way.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PBH TSX | Y | Y | Y |
| CNQ TSX | Y | Y | Y |
| T TSX | Y | Y | Y |
PAST PICKS: MAY 6, 2025
Brookfield Infrastructure (BIP.UN TSX)
Then: $42.91
Now: $50.70
Return: 18%
Total Return: 24%
Arc Resources (ARX TSX)
Then: $25.95
Now: $25.65
Return: -1%
Total Return: 2%
NFI Group (NFI TSX)
Then: $12.16
Now: $19.77
Return: 63%
Total Return: 63%
Total Return Average: 30%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BIP.UN TSX | Y | Y | Y |
| ARX TSX | Y | Y | Y |
| NFI TSX | Y | Y | Y |
