Posts Tagged: ‘accounts’

Canadian Income Stocks!

November 7, 2011 Posted by admin

18 High-Dividend Canadian Stocks

 

 

The 2008 financial crisis uncannily echoes what happened in Japan more than a decade ago. In the 1990s, the Japanese banking systems had become overloaded with bad loans after a property bubble collapse, according to Gillian Tett, author of Fool’s Gold. The investor psychology seemed dangerously similar too.  If this is the case, investors who buy high yield stocks now could collect big dividends while the economy fights to get back on its feet.

 

The Associated Press (AP) reported on Friday that the U.S. federal budget deficit has surged to an all-time high of $1.42 trillion. The Obama administration projects deficits will total $9.1 trillion over the next decade. For weeks the US dollar’s decline sent gold to all-time highs and helped oil to over $78. Canada happens to have plenty of these commodities. 

 

The following are 18 Canadian companies listed on U.S. exchanges with market caps greater than $1 billion, reasonable P/E ratios, and dividend yields greater than 3.5% (sorted by yield):

 

 

Name

Symbol

P/E

Yield

Market Cap

PROVIDENT ENERGY TR

(PVX)

9.0

11.1%

1.66B

PENGROWTH EGY UTS

(PGH)

5.0

10.6%

2.61B

PENN WEST ENERGY TRU

(PWE)

5.1

10.1%

6.90B

ENERPLUS RES FD

(ERF)

5.8

8.4%

3.97B

HARVEST ENERGY TRUST

(HTE)

4.2

8.1%

1.14B

B C E INC

(BCE)

21.7

6.1%

18.82B

TELUS CORP

(TU)

8.6

5.8%

9.41B

PRECISION DRILL TRST

(PDS)

4.3

5.7%

1.91B

BANK OF MONTREAL

(BMO)

17.3

5.1%

27.68B

TRANSALTA CORP

(TAC)

21.9

5.1%

4.07B

BAYTEX ENERGY TR UTS

(BTE)

12.8

5.0%

2.77B

CANADIAN IMP BK COMM

(CM)

3.7

5.0%

2.98B

BROOKFIELD PTYS CP

(BPO)

6.2

4.6%

4.47B

TRANSCANADA CORP

(TRP)

15.1

4.3%

21.71B

SHAW COMM CL B NV

(SJR)

15.6

4.2%

8.24B

ROGERS COMMUN CL B

(RCI)

16.8

4.0%

16.57B

BANK OF NOVA SCOTIA

(BNS)

16.7

3.9%

45.86B

TORONTO DOMINION

(TD)

17.4

3.5%

53.70B

 

These 18 high-dividend companies are in 4 sectors: Energy, Financial, Telecom and Utilities.

 

Energy Income Trust

High demand from China and a weak US dollar make the energy sector attractive.  7 companies belong to energy income trust category:

 

Symbol

Operating Margin

Debt/Operating CF

52-wk Range

(BTE)

36%

1.0

7.84 – 26.44

(ERF)

51%

0.7

12.85 – 28.58

(HTE)

10%

3.2

3.00 – 11.55

(PDS)

28%

2.0

2.00 – 12.21

(PGH)

22%

2.5

4.51 – 11.90

(PVX)

23%

1.5

2.23 – 6.84

(PWE)

58%

2.3

6.77 – 19.01

 

 

For sophisticated traders, trading commodities directly might provide a higher reward. For income investors, commodity companies might be a better choice because they provide some buffer, in addition to regular dividends.

 

There is a small ETF called Claymore Canadian Energy Income (ENY) which includes most of these companies. Its yield is 5.45%.

 

 

Financials

The Following are comparisons between Canadian banks, U.S. major banks averages, as well as JPMorgan Chase (JPM), one of the most conservative banks in the US. Clearly Canadian banks are much more profitable.

 

Description

P/E

ROE %

Div. Yield %

Net Profit Margin %

U.S. Money Center Banks

n/a

1.1%

1.1%

1.3%

JPMorgan Chase & Co. (JPM)

52.6

2.9%

0.4%

15.5%

Toronto-Dominion Bank (TD)

17.6

9.4%

3.5%

22.2%

The Bank Of Nova Scotia (BNS)

16.8

13.2%

3.9%

28.9%

CIBC (CM)

3.8

7.0%

5.0%

18.8%

Bank of Montreal (BMO)

17.4

9.2%

5.1%

21.8%

 

 

Telecom

Competition in the telecom sector is heating up in Canada. When BCE (BCE) and Telus (TU) announced they will start carrying the iPhone next month which puts an end to the exclusivity that Rogers (RCI) has enjoyed, it sent RCI’s short ratio to a stunning high of 33. Unlike those 3, Shaw Communications (SJR) primarily focuses on cable services.

 

Utilities

TransAlta (TAC) is an electric utility company while TransCanada (TRP) operates through two segments: pipelines and energy. TAC’s short ratio of 5.8 makes me nervous.

 

 Conclusion

After boldly buying when others were selling, Warren Buffet is pulling back, buying fewer stocks while investing in debt.  He is warning that the economy, though on the mend, remains deeply troubled.

 

In addition, the Canadian dollar is a strong threat to the Canadian economy. CurrencyShares Canadian Dollar Trust (FXC) appreciated over 13% this year. Mark Carney, the governor of the Bank of Canada, has warned that the Canadian dollar appears to be moving away from the fundamentals. 

 

The iShares MSCI Canada Index (EWC) year-to-date’s return is an astonishing 46%. A great stock can be easily turned into a bad investment, if you buy it at a higher than reasonable price.  It all depends on the starting price.

 

Nonetheless, high-dividend, fundamentally-strong companies are more likely to survive in this stormy market. One of the greatest ways to protect your portfolio is through asset allocation: to make sure not a single sector accounts for more than 20% of your portfolio. Be sure to re-balance as it will automatically enroll you into the “buy low, sell high” camp.

 

Disclosure: I have long positions on BMO, BNS, CM, PWE, TD, and TRE. All data is from Yahoo Finance (http://finance.yahoo.com/) as of Oct 16, 2009. 

 

Stocks: BCE, BMO, BNS, BPO, BTE, CM, ENY, ERF, EWC, FXC, THE, JPM, PDS,

PGH, PVX, PWE, RCI, SJR, TAC, TD, TRP, TU

 

Hao Jin, CFA
Contributing Writer

Article Source:http://www.articlesbase.com/investing-articles/canadian-income-stocks-1360481.html

What It Entails To Close Business Officially

November 3, 2011 Posted by admin

Even though one does not start a business with the intention of closing in mind, it is helpful to have a strategy on how to officially close it, if and when need arise. There are many issues that may push an entrepreneur to close down a business, some are social, others are legal, while others are finance related. Whatever the reason for the closedown, there are steps that one must carefully consider before declaring the business officially closed.

Much of what needs to be done may depend on the type of business ownership. This is because, when there are more stakeholders, decision making may be biased and may bring up a lot of protocol. One of the most important things to do is to vote for the close of the business. If the enterprise involves more than one overseer or director, minutes of the meeting in which it was decided that the business would be closed should be taken and filed as well as presented to the major stakeholders.

This will show that it was decided without controversy that the venture would head down that road. If your business is registered with the Small Business Development agency, you have to inform them that you are officially closed. The next thing is to cancel or to go back to your books of accounts and see which creditors need to be paid, the pending bills as well as all other dues that need to be taken care of. These will include taxes and all outstanding debts.

Once this is done, surrender all operational documents like trading licenses, operational permits and all other certificates acquired from the government or elsewhere. Once you are done with the above step, notify your creditors, employees, clients as well as other stakeholders that you are now officially closed.

Peter Gitundu Creates Interesting And Thought Provoking Content on Small Business. For More Information, Read More Of His Articles Here CLOSE BUSINESS OFFICIALLY If You Enjoyed This Article, Make Sure You Read My Most Recent Posts Here SMALL BUSINESS

Article Source:http://www.articlesbase.com/investing-articles/what-it-entails-to-close-business-officially-1337697.html

The pros and cons of bank money market deposit accounts

January 3, 2010 Posted by admin

A money market deposit account (MMA) is a high interest-earning account offered by a financial institution that operates under the Federal Deposit Insurance Corporation (FDIC) with limited transaction privileges mostly related to writing checks. Formally known as a money market deposit account, a MMDA functions as any regular savings account, but has higher minimum balance requirements that range between $1,000 to $2,500 and minimum number of withdrawals. Besides, it offers a higher rate of return because it is subject to the current interest rates that vary.

Advantages

(a) Liquidity

Funds in money market accounts are highly liquid and can be withdrawn as cash or transferred to other accounts.

The beneficiary may withdraw the money at any time without any fees or penalties and has easy access through checks, transfers, or ATMs. However, the withdrawals can be between three and six per month and are subject to varying withdrawals requirements. For instance, credit unions typically require a minimum deposit of $250 to open a money market deposit account and do not carry any service charge fees. On the contrary, larger banks typically charge fees and penalties when the balance falls below the minimum deposit of $5,000.

The money deposited in a money market account is invested through the bank or credit union, which collects the return. The interest paid to the account beneficiary remains in the account, but the bank lends that money to other accounts by charging a slightly higher interest for the loan than the interest paid to the account beneficiary. Therefore, the bank makes money by selling money, but it offers the flexibility to the account beneficiary to get the money instantly, without having to pay any penalties.

(b) Safety

Money market accounts are a safe investment, although their interest rates are low, because they are insured by the FDIC up to $250,000 or even a higher amount if they are linked to certain property investments. This means that, in case of liquidation of the bank, the insured deposits will be made by the FDIC as soon as possible either by cash or by offering to the depositor a transferred deposit of equal amount to a new insured institution.

FDIC is being kept solvent by the US Congress to ensure it can cover cases of emergency. However, there are certain scenarios that could possibly undermine the FDIC’s solvency. Such scenarios could be a credit crisis that occurs simultaneously with a general funding emergency; a war that deteriorates financial situation at home; an economic war with China.

(c) Interest

Money market deposit accounts earn higher interest than savings accounts. Nevertheless, they fall below the market average of interest on growth investment vehicles, such as stocks, mutual funds and long-term certificates of deposit (CDs). A money market deposit account offers investors returns as high as a short-term CD and it does not provide substantial enough interest payments to provide for long-term gains.

The interest rate is subject only to the amount of money that has been deposited and is not associated to the maturity date as it happens with the certificates of deposit (CDs). This enables investors to collect their cash any time, depending upon their investment plan. Besides, although interest rates in money market deposit accounts are lower than those of certificates of deposit, they enable investors to stay ahead of inflation.

Disadvantages

Money market deposit accounts have their disadvantages as well.

(a)    Minimum withdrawals

Money market deposit accounts allow few withdrawals per month, when dealing with third parties. In general, banks try to discourage investors from exceeding their minimum or maximum limits because there are fees involved. If the money market account falls below the minimum required balance, or it exceeds the limited number of transactions, the beneficiary pays high fees. In some cases, banks are closing the accounts in an effort to convince customers to limit their transactions. However, ATM transactions are not included.

(b) Higher balance requirements

For investors who anticipate needing a healthy portion of their savings at any time, money market deposit accounts may not be the best option. A MMDA typically requires a higher balance than a savings account, and penalizes the beneficiaries if it drops below the minimum.

Overall, money market deposit accounts are a good option for retirees or investors who prefer to earn a high interest on their money with the least possible risk, while maintaining direct access to their funds and being insured against loss. For a long-term horizon, other accounts may offer even higher interest, but they may be more risky. Generally, investors prefer money market deposit accounts because they are flexible and safe.

Christina Pomoni has acquired her MBA Finance from the American College of Greece. Her advanced familiarity with financial statement analysis, capital budgeting and market research has been acquired through her professional career at high-esteemed organizations. As part of her long journey, Christina has served as an Equity Research Associate at Telesis Securities (EFG Eurobank) and a Financial & Investment Advisor at ING Group. Besides, having lived at Chicago, IL, Boca Raton, FL and Paris, France has helped her, not only to be a successful professional, but mostly to see life under a more creative and innovative perspective.

Since 2005, Christina provides high quality writing services to numerous websites and research companies contributing her knowledge and expertise. Her areas of specialization are Business, Finance & Investment, Society, Politics & Culture. She also has a very good knowledge of Entertainment, Health & Fitness and Computers & Technology.

Christina currently designs the website of her own writing company. Believing that knowledge is the road to opportunity and development, her mission is to promote her already established knowledge to a growing number of visitors and to provide high quality writing services to meet the most demanding customer requirements.

Article Source:http://www.articlesbase.com/investing-articles/the-pros-and-cons-of-bank-money-market-deposit-accounts-1658310.html

Brokers and trading accounts

December 28, 2009 Posted by admin

Stock brokers and share brokers, both connote the same meaning. They play an important role in helping you open a trading account, particularly a demat account. Different services mark the uniqueness of different brokers, but the key objective is to facilitate investors in trading in the stock market. Finding informed share brokers will help you meet your trading needs, which prove profitable. Stock brokers charge certain rates, more often based on the number of units of shares you buy. The more the number of units, the less is the charges; however brokerage charges are negotiable for big buys. When you contact share brokers, do also look for veiled fees that may be mentioned within the terms and conditions. Many investors fall prey to such hidden charges, ending up paying even for transferring money. These are more noticed in paper based work rather than online trading.

Investors no longer need to get in touch with stock brokers every now and then during trading hours to gain information on shares. With online trading taking into its grip a huge section of the people from different vocational backgrounds and even homemakers, the stock market has witnessed an altogether new phenomenon. Finding experienced share brokers is possible online. Many brokerage platforms offer facilities to open free demat account or free trading account. If you are a beginner, interested to invest in the stock market in India, visit an online trading platform and open a free broking account. Without a trading account you cannot trade in shares. At Nirmal Bang and similar other brokerage platforms, you can open a free demat account and at the same time avail a number of benefits. In addition to this facility, you can take a tour on the performance of the stock market at this one-stop brokerage destination.

Generally, to open a trading account, you need to pay a certain amount as fees. For a free trading account, you are exempted from paying the fees. All you need to do is to open a cash management account for trading purposes. You will have to deposit funds in this broking account, enough to facilitate your buying and selling. Share brokers handle the complete responsibility of your funds; they withdraw the exact amount needed for a purchase of a stock and once the share is sold, the profits get automatically credited into your account. You are required to deposit sufficient funds for trading purpose. A trading account is similar to a bank account where shares take place of actual money.

To open a free demat account, you should have a Pan card, which has been made mandatory by the government since April 2006. As all processes and transactions are electronically recorded in case of a demat account, you need not sign papers as physical evidence. The DP (depository participant) takes care of everything; the DP can be a stock broker or an agent or a brokerage platform registered under SEBI. And you can view the statement of your account transactions from time to time as per your convenience.

Nirmal Kumar Soni is freelance market analyst and is writing reviews articles on free broking account, stocks and shares, equity shares, free demat account, online share trading and information about Online Stock Market, Currency Futures.

Article Source:http://www.articlesbase.com/investing-articles/brokers-and-trading-accounts-1635154.html