Canadian Shares To Watch

01/06/16 03:39:23 PM

by Koos van der Merwe

There are many Canadian shares that offer attractive yields. Here are four of them.

Security: AW,UN-T. BPF.U EIT,U ,PZA
Position: Accumulate

With the US dollar strengthening, and the Canadian economy and currency being hit by falling energy prices, there are many Canadian stocks that look very attractive to US investors. Listed below are four stocks that one can keep an eye on.

Figure 1. Daily chart of A&W Revenue Royalties Fund.

Graphic provided by: Omnitrader.

The chart in Figure 1 is a daily chart of A&W Revenue Royalties Income Fund. With A&W Root Beer, The Burger Family and Chubby Chicken, the company provides a powerful lineup of great food and beverages. The company has over 830 restaurants in Canada. On December 16 the company declared a cash distribution of 12.5 cents per trust unit for the period December 1 to December 31, 2015, payable on January 29th 2016 to unit-holders of record at the close of business on December 31st, 2015. Looking at the chart in Figure 1, one can see how the share fell to the bottom external band giving a buy signal on August 25 at $23.38. The share then rose to a high of $29.86 by December 1st when it reached the upper external band. It then fell to the upper internal band at $27.82 by December 14, but gave a buy signal on December 17 based on the stochastic strategy listed in green below the Vote line. The Stochastic and RSI indicators on the chart are both positive. The TSI indicators is, however, negative.

Figure 2. Daily chart of Boston Pizza Royalties Income Fund.

Graphic provided by: Omnitrader.

Another fund to keep on eye on is Boston Pizza Royalties Income Fund. On December 22, the fund announced that it had received approval from the Toronto Stock Exchange to repurchase for cancellation up to 500,000 units (approx. 2.4% of the funds outstanding units.) The fund is also offering a 7.25% yield based on the share price as at December 31st. Looking at the chart in Figure 2, a buy signal was given on December 16 when the share price was $17.00. This signal was once again given by the Stochastic Strategy.

Figure 3. Daily chart of Canoe EIT Income Fund.

Graphic provided by: Omnitrader.

The third interesting Canadian Fund to keep an eye on is Canoe EIT Income Fund shown in Figure 3. On December 30, the fund announced that it had renewed its purchasing of units that will terminate January 3, 2017. The fund is one of Canada's largest diversified closed-end investment funds, investing in a diversified portfolio of income-generating and capital growth securities listed primarily on the TSX. The fund is currently offering 6.88% per annum, paid monthly comprised in whole or in part Return of Capital of the net asset value per unit. The company advises that one should not draw any conclusions about the fund's investment performance from the amount of this distribution. The chart in Figure 3 is showing that the fund is presently trading at $11.20 after hitting the bottom external band on August 25 at $9.16. The fund gave a buy on December 1 at $11.14, then dropped to $10.66 by December 14, but has recovered to its present price of $11.20.

Figure 4. Daily chart of Pizza Pizza Royalty Corp.

Graphic provided by: Omnitrader.

The final chart in Figure 4 is a chart of Pizza Pizza Royalty Corp. Pizza Pizza Royalty Corp., through its partnership, Pizza Pizza Royalty Limited Partnership, owns, operates, and franchises quick service restaurants under the Pizza Pizza and Pizza 73 brands in Canada. The company is presently offering a yield in the region of 6%. The chart shows how the share price has traded sideways since July, recovering from that major drop in August. That chart is not suggesting a buy at the moment but all three indicators are suggesting strength. The Stochastic Strategy below the Vote line is however suggesting a buy.

Yes, there are many more Canadian shares offering interesting yields, paid either monthly or quarterly, and with the Canadian dollar having weakened so much against the US dollar, buying Canadian dividend or interest-bearing stocks looks like a safe way to protect one's portfolio should the US market turn bearish.

Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

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Canadian Shares To Watch

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