RBC: The Top 30 Stock Picks For 2015

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RBC Capital Markets has published its global stock picks for 2015.  Investors looking to start positions for next year can find some interesting companies in this list below:

1.Company: Dollarama Inc (DLMAF)
Current Dividend Yield: 0.56%
Sector: Consumer Discretionary
Country: Canada

2.Company: Magna International Inc(MGA)
Current Dividend Yield: 1.43%
Sector: Auto Components
Country: Canada

3.Company: Amazon.com Inc (AMZN)
Current Dividend Yield: N/A
Sector: Consumer Discretionary
Country: USA

4.Company: H & M Hennes & Mauritz AB (HMRZF)
Current Dividend Yield: 3.58%
Sector: Consumer Discretionary
Country: Sweden

5.Company: Yum! Brands Inc (YUM)
Current Dividend Yield: 2.30%
Sector: Consumer Discretionary
Country: USA

6.Company: CBS Corp. (CBS)
Current Dividend Yield: 1.09%
Sector: Media
Country: USA

7.Company: Amphenol Corp (APH)
Current Dividend Yield: 0.91%
Sector: IT
Country: USA

8.Company: Marvell Technology Group Ltd (MRVL)
Current Dividend Yield: 1.69%
Sector: Semiconductors & Semiconductor Equipment
Country: USA

9.Company: Suncor Energy Inc (SU)
Current Dividend Yield: 3.10%
Sector: Oil, Gas & Consumable Fuels
Country: Canada

10.Company: Agrium Inc (AGU)
Current Dividend Yield: 3.25%
Sector: Chemicals
Country: Canada

11.Company: Marathon Petroleum Corp (MPC)
Current Dividend Yield: 2.29%
Sector: Oil, Gas & Consumable Fuels
Country: USA

12.Company: Bunge Ltd (BG)
Current Dividend Yield: 1.50%
Sector: Food Products
Country: USA

13.Company: Glencore PLC (GLNCY)
Current Dividend Yield: 3.66%
Sector: Metals & Mining
Country: Switzerland

14.Company: Toronto-Dominion Bank (TD)
Current Dividend Yield: 3.49%
Sector: Banking
Country: Canada

15.Company: PNC Financial (PNC)
Current Dividend Yield: 2.09%
Sector: Banking
Country: USA

16.Company: UBS AG(UBS)
Current Dividend Yield: 1.62%
Sector: Banking
Country: Switzerland

17.Company: Canadian National Railway Co (CNI)
Current Dividend Yield: 1.20%
Sector: Industrials
Country: Canada

18.Company: CGI Group Inc (GIB)
Current Dividend Yield: N/A
Sector: IT Services
Country: Canada

19.Company: Actavis PLC (ACT)
Current Dividend Yield: N/A
Sector: Pharmaceuticals
Country: USA

20.Company: Air Lease Corp (AL)
Current Dividend Yield: 0.47%
Sector: Trading Companies & Distributors
Country: USA

X.Company: Assicurazioni Generali SpA (ARZGY)
Current Dividend Yield: 2.97%
Sector: Insurance
Country:Italy

21.Company: Aurizon Holdings Ltd (AZKHY)
                          Ticker on the Australian Exchange:(AZJ)
Current Dividend Yield: N/A
Sector: Rail freight company
Country: Australia

22.Company: BG Group PLC (BRGYY)
Current Dividend Yield: 1.95%
Sector: Oil, Gas & Consumable Fuels
Country: UK

23.Company: Boston Properties Inc (BXP)
Current Dividend Yield: 1.94%
Sector: REIT
Country: USA

24.Company: Brookdale Senior Living Inc (BKD)
Current Dividend Yield: N/A
Sector: Health Care Providers & Services
Country: USA

25.Company: Reynolds American Inc (RAI)
Current Dividend Yield: 4.17%
Sector: Tobacco
Country: USA

26.Company: Ryder System Inc (R)
Current Dividend Yield: 1.62%
Sector: Road & Rail
Country: USA

27.Company: Safran SA (SAFRY)
Current Dividend Yield: 2.49%
Sector:Aerospace & Defense
Country: France

28.Company: ServiceNow Inc (NOW)
Current Dividend Yield: N/A
Sector: Software
Country: USA

29.Company: Telecom Italia SpA (TI)
Current Dividend Yield: N/A
Sector: Telecom
Country: Italy

30.Company: United Rentals Inc (URI)
Current Dividend Yield: N/A
Sector: Trading Companies & Distributors
Country: USA

Source: Here are 30 stocks to own in 2015, Dec 19, 2014, Financial Post

From the RBC report:

“In light of the broad resource equity weakness in the back half of 2014, we see opportunity in high quality energy and material companies,” RBC said, noting that its top picks look better positioned than their peers to withstand near-term commodity volatility.

I agree that there are plenty of excellent opportunities in the energy space now with the fall in stock prices. Investors with a 5-year outlook can definitely find bargains that are too good to pass up.

Disclosure: Long CNI,PNC,SAFRY,TD

See also: Goldman Sachs: 32 Best European Stocks For 2015

Are Australian Companies Missing Out On Growth Opportunities?

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On Monday we looked at some of the reasons for investing in Australian dividend stocks. High payout ratio is one of the main advantages of Australian stocks.However a report published by the Boston Consulting Group questioned if Australian firms are missing out on potential growth opportunities as they are focused too much on satisfying investors’ hunger for yields. According to the authors of the report, this issue is especially important since the earnings growth of Australian firms are falling behind the world average but they continue to maintain the high dividend payout ratios as the chart shows below:

Click to enlarge

Australia EPS growth vs Dividend Payout Ratio

Source: The 2014 Australian Value Creators Report, The Challenge of Growth, Boston Consulting Group

The payout ratio of Australian companies 20 to 30 percentage points higher than the world average.While the authors do not offer an answer to the title question of this post they do note however that “Growth has become increasingly challenging as the market lost some of its competitive prowess.”

Related ETF:

  • iShares MSCI Australia Index (EWA)

Disclosure: No Positions

Two Reasons On Why European Stocks Have Room To Grow

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European stocks have been laggards this years relative to the decent performance of U.S. stocks. However moving forward, European stocks have better growth potential compared to their American peers for a variety of reasons two of which are discussed in this post.

1. Currently U.S. stocks are expensive while European equities are relatively cheap based on the P/E ratio. For example, as of Dec 11, the P/E for the US market is 19.5. The P/E ratios of some of the major European markets are lower at 15.8, 9.8, 19.4, 15.5 for Germany, Norway, Spain and the UK respectively. French stocks have a P/E of 19.4.

2.  European equities as measured by the MSCI Europe Index have under-performed MSCI USA in US dollar terms since the sovereign debt crisis.MSCI Europe performed well in sync with MSCI USA from 2009 thru mud-2011. But since then European stocks have under-performed again.Though European equities have had an upward trend since mid-2012 they still have more room to grow in order to catch up with American stocks as shown in the below chart:

Click to enlarge

MSCI Europe vs USA

 

Source: MSCI

Ten stocks from the Euro STOXX 50 Index are listed below with their current dividend yields for further research:

1.Company: Sanofi (SNY)
Current Dividend Yield: 4.23%
Sector: Pharmaceuticals
Country: France

2.Company: Danone SA (DANOY)
Current Dividend Yield: 2.98%
Sector:Food Products
Country: France

3.Company: BASF SE (BASFY)
Current Dividend Yield: 4,38%
Sector: Chemicals
Country: Germany

4.Company: Siemens AG (SIEGY)
Current Dividend Yield: 3.62%
Sector:Industrial Conglomerates
Country: Germany

5.Company: Telefonica SA (TEF)
Current Dividend Yield: 3.58%
Sector: Telecom
Country: Spain

6.Company: Volkswagen AG (VLKAY)
Current Dividend Yield: 2.48%
Sector: Auto Manufacturing
Country: Germany

7.Company: AXA Group (AXAHY)
Current Dividend Yield: 4.94%
Sector: Insurance
Country: France

8.Company: Banco Santander SA (SAN)
Current Dividend Yield: 9.68%
Sector: Banking
Country: Spain

9.Company: Eni SpA (E)
Current Dividend : 8.53%
Sector:Oil, Gas & Consumable Fuels
Country: Italy

10.Company:Air Liquide (AIQUY)
Current Dividend Yield: 2.65%
Sector: Chemicals
Country: France

Note: Dividend yields noted above are as of Dec 12, 2014. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure:  Long AXAHY and SAN