TSI’s Scott Clayton has unearthed seven dividend-paying gems ready for your new buying. These companies span industries from banking to pipelines and have seen their fortunes rise in the wake of recent interest rate cuts. Our rigorous TSI Dividend Sustainability Rating System targets these stocks as not just holding their ground, but also poised for significant growth in the current falling-rate environment.
We’ve identified seven companies that not only maintain rock-solid dividend credentials but also possess the financial firepower and market positioning to deliver outstanding returns in 2025 and beyond.
This screen highlighted two of Canada’s Big Five banks, plus two Calgary-based pipeline operators, two power utilities, and a telecom giant. Our research suggests that as the Bank of Canada continues to lower interest rates, these high-yield Canadian stocks will emerge as beacons of opportunity in a shifting financial landscape. From widening profit spreads in the financial sector to reduced borrowing costs for utilities and pipeline operators, these companies are well-positioned to capitalize in the current economic climate.
High-yield Canadian stocks bolstered by the increasingly rapid move to cut interest rates.
The screen
The Bank of Canada’s decision last week to lop another 50 basis points from its overnight rate was followed this week by the U.S. Federal Reserve’s move to cut 25 basis points from its own. Regardless of the relative size, falling interest rates tend to hurt the appeal of fixed-income investments like GICs while bolstering the attraction – and the dividend yields – of income stocks.
High-yield stocks from the financial sector are among the biggest beneficiaries of that phenomenon, as falling interest rates lower what they pay out to depositors and so lift their profit spreads. Historically, that’s been enough to drive up their share prices and dividend yields. Utility stocks benefit in much the same way as falling interest rates cut the carrying costs of their high debt loads. That tends to lift their stock prices and their yields.
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We think now is a good time to buy the best of high-yield stocks – not just for their current sustainable dividends but also for their prospects.
Our search started with a list of dividend-paying Canadian financials and utilities. We then homed in on those with strong prospects for earnings growth before applying our Dividend Sustainability Rating system. It awards points to a stock based on key factors:
One point for five years of continuous dividend payments – two points for more than five;
Two points if it has raised the payment in the past five years;
One point for management’s commitment to dividends;
One point for operating in non-cyclical industries;
One point for limited exposure to foreign currency rates and freedom from political interference;
Two points for a strong balance sheet, including manageable debt and adequate cash;
Two points for a long-term record of positive earnings and cash flow to cover dividends;
One point if the company’s an industry leader.
Companies with 10 to 12 points have the most-secure dividends, or the highest sustainability. Those with seven to nine points have above-average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
Dividend Stocks: Seven High-Yield Canadian Dividend Stocks Ready to Surge
What we found
Our TSI Dividend Sustainability Rating System generated seven stocks:
Bank of Nova Scotia (with a 5.5% yield), and Royal Bank of Canada (3.4%), both headquartered in Toronto, are Big Five stalwarts.
Pipeline operators TC Energy Corp. (5.1%) and Enbridge Inc. (6.4%), both based in Calgary, have strong cash flow and growth projects to keep dividends rising.
Power utilities Fortis Inc. (4.1%), headquartered in St. John’s, Newfoundland, and Canadian Utilities Ltd. (5.3%), based in Calgary, are both prospering in their markets.
And finally, Vancouver’s Telus Corp. (8.0%) continues to profit from selling telecom services to Canadians – profits now spurred by the completion of multi-year upgrades to wireless and fibre-optic networks.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
Extendicare sold off its retirement living operations in 2022, and its current focus on long-term care homes and home health care has paid off. The stock has now regained all the ground it lost after the onset of the pandemic and more—we think it can go higher. It’s a Power Buy.
The firm’s impressive 11.3% revenue growth and strategic expansion into high-margin segments is complemented by strong operational metrics, including a 98.4% occupancy rate.
The high payout appears sustainable and ambitious growth plans through new facility development create a solid foundation for long-term value creation.
EXTENDICARE INC. (Toronto symbol EXE; www.extendicare.com) owns and operates long-term care homes. Investors also tap the company’s ParaMed Home Health Care branches. ParaMed provides nursing care and other forms of assistance to clients who remain in their own homes.
In May 2022, Extendicare completed the sale of its retirement living operations—comprised of 1,048 retirement living suites across 11 retirement communities in Ontario and Saskatchewan—to Sienna-Sabra LP. It’s a partnership formed between Sienna Senior Living Inc. (Toronto symbol SIA) and California-based Sabra Healthcare REIT (Nasdaq symbol SBRA). The sale price was $307.5 million.
Extendicare made the sale to focus on expanding its long-term care and home health care segments. That’s where it feels it can best use its expertise and scale to drive future revenue and cash flow.
Meanwhile, the company recently announced that it has entered into an agreement with Revera Inc. and certain of its affiliates to acquire nine Class C long-term care homes located in Ontario and Manitoba and one parcel of vacant land located in Ontario.
The purchase price is $60.3 million.
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The acquired homes encompass 1,396 beds in nine homes, seven of which consist of a mix of 361 funded LTC beds and 574 private pay retirement beds. The LTC beds in these seven homes are all Class-C beds, which Extendicare intends to redevelop and replace with six new LTC homes comprising a proposed 361 replacement beds and 727 new beds.
Also included in the 1,396 beds is the 250 bed Class C Carlingview Manor home in Ottawa, which is in the process of being redeveloped into a new LTC home that is owned by its joint venture with Axium.
At the same time, Extendicare has been advised by Revera that Revera has entered into a sale agreement with a third party pursuant to which that third party will acquire 21 of Revera’s Class C LTC homes located in Ontario. They are currently managed by Extendicare. Upon closing of the two transactions, Extendicare’s existing management agreements with Revera in respect of the 30 homes, as well as related redevelopment arrangement agreements, will end.
Dividend Stocks: Ontario funding adds to Extendicare’s annual revenue stream
Effective April 1, 2024, the Ontario Ministry of Long-Term Care implemented a 6.6% blended funding increase. The hike added $21.3 million to Extendicare’s annual revenue of $1.35 billion.
In the quarter ended September 30, 2024, revenue rose 11.3%, to $359.1 million from $322.5 million a year earlier. Revenue was higher due to the funding increase and the home healthcare business’s ADV (average daily volume) and managed services growth. The average occupancy in its long-term care (LTC) homes increased to 98.4% from 97.8%. Cash flow per share doubled, to $0.28 from $0.14.
Extendicare keeps buying back shares. Under approval from the TSX for the period from June 30, 2023, until expiry on June 29, 2024, the company repurchased 1.1 million of its shares at an average price of $6.23. Over the next year, it plans to keep buying back more of its stock.
Extendicare continues to pay monthly distributions of $0.04 a share; the annual rate of $0.48 yields a high 4.7%.
The world’s largest gold miner, Newmont Corp., stands at a compelling inflection point, combining robust gold market fundamentals with strategic diversification into copper and other metals. The firm reported adjusted net income of $0.81 per share in the latest quarter, demonstrating exceptional operational execution and financial strength.
The company’s growth trajectory appears well-supported by bullish precious metals markets and operational efficiency.
Despite a proven track record of shareholder returns through consistent dividends and strategic buybacks, coupled with significant upside potential, the stock trades at just 11.8 times the company’s forward earnings forecast.
NEWMONT CORP. (New York symbol NEM; www.newmont.com) remains a solid pick for long-term growth and as a hedge against inflation.
Newmont’s position as the world’s largest gold miner, with major mines in North America, South America, Australia, and Africa, offers a lot of investment appeal. In addition to gold, it also produces copper, silver, lead and zinc.
Newmont continues to make progress with its plan to sell six of its less important mines. After these sales, it will focus on its 10 top-tier mines in North America, South America, Australia, Papua New Guinea and Ghana (Africa).
Mining Stocks: Strategic divestments and buybacks should optimize Newmont’s portfolio
Under that plan, Newmont has agreed to sell its Cripple Creek & Victor mine in Colorado to SSR Mining Inc. (Toronto symbol SSRM). The company will receive $100 million when it completes the sale. It could also receive an additional $175 million in future cash payments.
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The company agreed to sell its Akyem gold mine in Ghana for $900 million. It could receive an additional $100 million in future cash payments.
Newmont also recently agreed to sell its Musselwhite gold mine in Ontario for $810 million. It could receive an additional $40 million in future cash payments. The company expects to complete the transaction in the first quarter of 2025.
So far, Newmont has agreed to sell $3.9 billion worth of assets. To put that in context, its market cap (the value of all outstanding shares) is $42.2 billion.
Those proceeds will help fund the company’s plan to buy back $3 billion worth of its shares through October 2026.
Meanwhile, Newmont will continue to operate its Ahafo mine in Ghana. In fact, it plans to invest up to $1.05 billion in this project in the next few years.
In the most recent quarter ending September 30, 2024, the company produced 2.1 million gold equivalent ounces. Excluding one-time items, the company reported earnings of $936 million, or $0.81 a share, in the latest quarter.
All in all, strong gold market fundamentals and company financials, an attractive valuation and upside potential plus a solid dividend make Newmont as solid pick for the long term.
Thanks to rising gold prices and production, Newmont’s earnings likely jumped over 90% in 2024 to $3.13 a share; the stock trades at a reasonable 11.8 times that forecast. The $1.00 dividend yields 2.7%.
A Member of Pat McKeough’s Inner Circle recently asked for his advice on Inari Medical, a company that makes highly specialized medical devices.
Pat likes the firm’s demonstrated revenue growth trajectory and strategic expansion into new markets. The company’s 21.4% year-over-year sales growth is coupled with a successful acquisition that positions it even more strongly in the medical device sector. However, Pat notes the firm is a relatively new IPO.
Inari Medical Inc. (Symbol NARI on Nasdaq; www.inarimedical.com) is a medical device company whose products treat patients suffering from Chronic Venous Disease (phlebitis) and other related issues. Its two main products are ClotTrievers, which remove blood clots from blood vessels, and FlowTrievers, which treat pulmonary embolisms (when blood clots, often in the legs, break off and flow through the veins to cause a blockage).
Inari first sold shares to the public and began trading on May 27, 2020, at $19 a share. The next day, the shares jumped to $42.91. They kept on rising to a peak, about a year later, of $130, and they have since headed steadily sideways to downwards.
On November 1, 2023, Inari agreed to acquire LimFlow S.A., a privately owned French medical device company whose products treat chronic limb-threatening ischemia (CLTI). (That’s when blood flow in the limbs is severely restricted.) LimFlow devices work to deliver oxygenated blood back into the foot through the patient’s veins. That’s important because if left untreated, CLTI leads to increased mortality, limb amputation, and a lower quality of life.
CLTI is also estimated to affect 1.5 million people annually worldwide, with about a third of diagnosed patients in the U.S. It is one of the biggest unmet needs in vascular medicine. LimFlow aligns well with Inari’s mission to treat unmet patient needs.
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Inari will pay $250 million in cash to close the deal, plus as much as $165 million if LimFlow meets performance targets. Inari previously held a minority stake in LimFlow.
Over the last few years, Inari has reported rapidly rising revenue. In fact, revenue jumped 173.4%, from $51.1 million in 2019 to $139.7 million in 2020. In 2021, it climbed another 98.3% to $277.0 million. That was followed by a 38.4% increase in 2022, to $383.5 million. In 2023, revenue rose a further 28.7%, to $493.6 million.
Earnings varied over those years: the company lost $1.2 million, or $0.20 a share, in 2019; in 2020 it reported a profit of $13.8 million, or $0.43 a share; in 2021, earnings were $9.8 million, or $0.20 a share; and in 2022, the company lost $29.3 million, or $0.55 a share. In 2023, Inari lost $1.6 million, or $0.03 a share.
Inner Circle: Inari Medical’s long-term outlook is positive
In the quarter ended September 30, 2024, Inari’s revenue rose 21.4%, to $153.4 million from $126.4 million a year earlier. The increase was driven primarily by an expansion in its sales territories, opening of new accounts, increase in adoption of its procedures, global commercial expansion, and introduction of new products. The company lost $18.4 million, or $0.31 a share, in the latest quarter, compared to a profit of $3.2 million, or $0.06 a share, a year earlier.
The firm spends a high 18% of its revenue on research and development. While research spending hurts current earnings, it creates a hidden asset that helps the company succeed long term against its rivals.
Companies mostly write off their research costs when they spend the money, and this depresses the current year’s earnings. Information on corporate research spending is freely available, yet many investors pay little attention to it. Investors recognize that research can lead to new or improved products or services. But the payoff for these improvements, if any, will come from long-term sales and profit growth.
All in all, Inari’s outlook is positive. Apart from its FlowTriever and ClotTriever devices, the company has developed some complementary products. These include Revcore, a mechanical thrombectomy device, which removes clots, and the T16 Curvecatheter (a thin tube inserted into the body as part of a medical treatment).
Demand for many of its products is on the rise, and the company has expanded its sales force. What’s more, it has lots of room for international growth.
Recommendation in Pat’s Inner Circle: Inari Medical Inc. is okay to hold.
Stanley Black & Decker is executing a comprehensive transformation that has already delivered $1.4 billion in pre-tax run-rate savings while targeting an additional $2 billion in cost reductions by 2025. The company’s operational improvements are driving margin expansion, with adjusted gross margins expected to exceed 35% long-term, supported by strategic divestitures and focused capital allocation.
The combination of stronger earnings, a solid yield, and aggressive cost reduction initiatives positions the company for sustained growth and shareholder returns.
Meanwhile, the stock trades at 15.1 times the company’s 2025 forward earnings forecast.
STANLEY BLACK & DECKER INC. (New York symbol SWK; www.stanleyblackanddecker.com) is one of the world’s largest makers of hand and power tools. In addition to brands Stanley and Black & Decker, it also offers top-selling brands DeWalt, Lenox, Irwin and Craftsman.
In April 2024, the company sold its Stanley Infrastructure business, which makes tools for industrial users, to Sweden’s Epiroc AB. It plans to use the proceeds of $760 million to pay down debt.
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In the quarter ended September 30, 2024, Stanley’s revenue declined 5.1%, to $3.75 billion from $3.95 billion. Revenue was lower as growth at DeWalt and aerospace fasteners was offset by lower overall demand and the sale of the Stanley Infrastructure business. Excluding one-time items, the company earned $1.22 a share (or a total of $185.0 million). That was up 16.2% from $1.05 a share (or $158.2 million). The company was able to successfully cut costs.
Value Stocks: Stanley Black & Decker’s Earnings Turnaround Gains Momentum
Stanley is currently restructuring its operations, which includes closing factories and shrinking the number of products it makes. The plan should cut $1.5 billion from its annual costs in 2024. Those annual savings should rise to $2.0 billion by the end of 2025.
The plan should also lift its gross profit margin (gross profits divided by revenue—the higher, the better) from about 30% in 2024 to between 35% and 37% in 2027 and beyond.
Stanley expects its turnaround plan to continue to lift its earnings. The stock trades at a low 15.1 times its forecast 2025 earnings of $5.48 a share.
Meanwhile, with the September 2024 payment, the company increased your quarterly dividend by 1.2%, to $0.82 a share instead of $0.81. The annual rate of $3.28 a share yields 4.0%. The company has paid regular dividends for 148 years and had raised the annual rate each year for the past 57 years.
Recommendation in Dividend Advisor: Stanley Black & Decker Inc. is a buy.
Motorola’s exceptional market performance is driven by its dominant position in mission-critical communications and successful integration of artificial intelligence (AI) technologies. This leadership is further validated by consistent revenue growth and strategic acquisitions that enhance its product portfolio.
The firm remains a solid long-term buy as it continues to beat expectations, innovate for competitive advantage and maintain strong operating cash flow.
The stock trades at 31.4 times the company’s forward earnings forecast, which seems high until you factor in its market dominance and 48.0% the shares have returned so far in 2024. It’s a subscriber favourite!
MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) makes specialized communications equipment, such as two-way radios for police and fire vehicles, as well as high-definition surveillance systems. It also makes software that helps governments manage their emergency response call centres.
Motorola tends to fuel its growth with acquisitions. However, it cuts the risk of this strategy by focusing on smaller firms that enhance its technology or its presence in certain markets.
Some of its latest purchases include spending $553 million for Rave Mobile Safety, a maker of software to help public safety agencies communicate and collaborate during emergencies. The platform is also used by thousands of K-12 schools and higher education institutions across the U.S. Rave’s panic button solution can immediately provide real-time incident details and essential data like location to 9-1-1 call takers and first responders, and its incident management solution helps to coordinate the emergency response across school safety personnel, administrators and first responders.
Motorola also spent $388 million for Ava Security, which specializes in cloud-based video analysis.
As well, the company paid an undisclosed sum for IPVideo. This private company is the creator of the HALO Smart Sensor, a multi-functional device that can detect a wide range of safety threats, including smoke, abnormal noise and motion. This product is mainly for areas not suitable for traditional surveillance cameras due to privacy concerns, such as restrooms, hotel rooms and hospitals. This acquisition complements Motorola’s other products, and increases the appeal of its security systems.
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Meanwhile, the company paid an undisclosed sum for Noggin earlier this year. Based in Sydney, Australia, this firm makes cloud-based software that helps businesses and public safety agencies manage disruptions to their computer networks caused by natural disasters and other events. Its products also help clients, including governments, airports and hospitals, quickly restore their systems.
The purchase is part of Motorola’s plan to expand its services operations. That gives it recurring revenue streams and cuts its reliance on selling hardware.
The company also continues to win new contracts. For example, four U.K. fire and rescue services, which together operate 77 fire stations, will use Motorola’s Control Room Solution software to improve their response times to fires and other emergencies.
Growth Stocks: Strategic AI integration enhances Motorola’s product portfolio
A key focus for Motorola is integrating artificial intelligence (AI) software into its products.
For example, the company has launched a new AI-powered video surveillance system that can better detect firearms in public places such as sports arenas. AI technology will also help its clients prevent unauthorized access to their premises and to better anticipate failures of monitoring equipment like cameras and sensors.
The firm reported that revenue in the third quarter ended September 28, 2024, rose 9.2%, to $2.79 billion from $2.56 billion a year earlier. That’s due to higher demand for its radio and video systems, as well as its software products. Earnings before one-time items increased 17.2%, to $3.74 a share from $3.19.
Motorola’s stock has gained 48% so far in 2024, and hit a new all-time high of $507.82 on November 11, 2024. It now trades at 31.4 times the $14.73 a share that the company is forecast to earn in 2025. That’s a reasonable multiple in light of the company’s high research spending (9% of revenue) and strong brand.
The company will also raise your quarterly dividend by 11.2%. Starting with the January 2025 payment, investors will receive $1.09 a share instead of $0.98. The new annual rate of $4.36 yields 0.9%.
McDonald’s global presence and proven ability to adapt to market challenges through strategic pricing and menu innovations demonstrate exceptional resilience. Its consistent dividend growth reflects fundamental strength, while successful value initiatives in key markets are driving improved performance.
This creates a compelling investment case for long-term investors seeking both growth and income stability. That’s why this firm remains our #1 Conservative Buy while the stock trades at 23.4 times the forward earnings forecast.
MCDONALD’S CORP. (New York symbol MCD) is the world’s largest fast-food chain with over 42,000 restaurants in 119 countries. It serves a wide variety of food but is best known for its hamburgers and French fries.
The company reported higher-than-expected results for its latest quarter, despite lower sales at its international locations, particularly in China and the Middle East. However, sales in the U.S. improved thanks to a successful $5 value meal promotion.
In the three months ended September 30, 2024, McDonald’s revenue rose 2.7%, to $6.87 billion from $6.69 billion a year earlier. That beat the consensus forecast of $6.82 billion.
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Overall same-store sales fell 1.5% on declines at the International Operated Markets division (Australia, Canada, France, Germany, Italy, the Netherlands, Spain and the U.K.), down 2.1%; and the International Developmental Licensed Markets division (mainly outlets in China, Japan, the Middle East and remaining markets), down 3.5%. However, U.S. same-store sales rose 0.3%.
McDonald’s earnings before unusual items fell 0.6%, to $2.23 billion from $2.34 billion. Due to fewer shares outstanding, per-share earnings gained 1.3%, to $3.23 from $3.19. That also beat the $3.20 consensus estimate.
Meanwhile, the company has now resumed selling its Quarter Pounder hamburger in certain U.S. states following a recent outbreak of E. coli linked to a supplier of onions. That should help restore consumer confidence, although the outbreak will almost certainly hurt traffic at its U.S. stores in the fourth quarter of 2024.
For all of 2025, McDonald’s will probably earn $12.60 a share, and the stock trades at a reasonable 23.5 times that estimate.
McDonald’s has raised its annual dividend rate each year since 1976. The next increase will come in December 2024 when your quarterly payment increases 6.0%, to $1.77 a share from $1.67. This marks 48 consecutive years of growth since 1976 and the new annual rate of $7.08 yields 2.4%.
Including this latest increase, that payment has grown an average 7.2% annually over the past 5 years. McDonald’s TSI Dividend Sustainability Rating is Highest.
The combination of record defense backlogs, strong international demand, and improving aerospace performance positions RTX Corp. for substantial growth. The defense segment’s $90 billion backlog demonstrates exceptional momentum in one of its core operations.
Meanwhile the commercial aerospace division benefits from robust aftermarket demand and increasing global air travel. The company appears well-positioned for continued success while the stock trades at 20.9 times the company’s earnings forecast.
RTX CORP. (New York symbol RTX) changed its name from Raytheon Technologies Corp. to RTX (it did not change the trading symbol) in July 2023. Today, RTX, formed from the 2020 merger of Raytheon and United Technologies, is a leading maker of commercial aircraft equipment, electronic systems for military aircraft, and guided missiles.
RTX has three business units: Collins Aerospace makes aircraft control systems, navigation equipment and cabin interiors (34% revenue in the latest quarter, 63% of earnings); Pratt & Whitney makes jet engines (34%, 30%); and Raytheon makes a variety of military equipment, such as land and sea-based missile defence and radar systems (32%, 7%). The U.S. government is the company’s biggest customer, accounting for about 55% of its revenue.
RTX has now agreed to pay $959 million to settle several lawsuits related to Raytheon before the 2020 merger. Those include charges that it defrauded the U.S. Department of Defense into overpaying for certain equipment, and that it bribed an official in Qatar to secure orders from that country’s air force.
However, the company is now strengthening its oversight procedures, so the scandal will likely have little impact on RTX’s ability to secure new defence contracts.
Growth Stocks: RTX’s revenue rockets and earnings rise on higher airline demand
Meanwhile, RTX’s revenue in the third quarter of 2024 rose 49.2%, to $20.1 billion from $13.46 billion a year earlier. That beat the consensus forecast of $19.91 billion. If you adjust for the recent sale of its Cybersecurity, Intelligence and Services business for $1.3 billion, organic revenue rose 8.0% in the quarter.
The higher revenues are mainly due to stronger demand from airlines for spare parts. Sales of military equipment also improved.
The company has a record backlog of $221 billion, including $131 billion of commercial and $90 billion of defense.
If you exclude unusual items, mainly charges related to lawsuit settlements, overall earnings gained 6.9%, to $1.95 billion from $1.82 billion. Due to fewer shares outstanding, per-share earnings rose 16.0%, to $1.45 from $1.25. That also beat the $1.34 consensus estimate.
The company’s earnings for all of 2024 will probably rise 8% to $5.54 a share and the stock trades at a reasonable 20.9 times that estimate.
With the June 2024 payment, RTX raised your quarterly dividend by 6.8%, to $0.63 a share from $0.59. The new annual rate of $2.52 yields 2.2%.
The company’s TSI Dividend Sustainability Rating is Above Average with the company having maintained payments for an impressive 54 consecutive years.
A Member of Pat McKeough’s Inner Circle recently asked for his advice on MarineMax, a company that sells recreational boats and related marine products and services across the United States.
Pat likes the firm’s demonstrated growth through strategic acquisitions and technological innovation as it creates an ecosystem of marine-related services far beyond boat sales. However, Pat cautions that the stock is trading cheaply due to justified concern over its high debt and doubts it can maintain its previously high growth rate.
MarineMax Inc. (Symbol HZO on New York; www.marinemax.com), operates as a recreational boat and yacht retailer, and a services firm for yacht owners in the U.S.
The company sells new and used recreational boats, including pleasure and fishing boats, mega- and small yachts, sport cruisers, ski boats, jet boats, and other recreational boats.
It offers marine parts and accessories comprising marine electronics; dock and anchoring products that include boat fenders, lines, and anchors; boat covers; trailer parts; water sport accessories, which comprise tubes, lines, wakeboards, and skis; engine parts; steering and control systems; corrosion control products and service products; high-performance accessories, including propellers and instruments; and a line of boating accessories such as life jackets, inflatables, and water sports equipment.
MarineMax also provides novelty items such as shirts, caps, and licence plates; marine engines and equipment; maintenance, repair, and slip and storage accommodation services; and boat or yacht brokerage services.
The company has more than 120 locations worldwide, including 75 dealerships and 65 marinas.
Its businesses include IGY Marinas, which operates luxury marinas in yachting and sport fishing destinations around the world; Fraser Yachts Group and Northrop & Johnson, two leading luxury yacht brokerage and services firms; Cruisers Yachts, one of the world’s premier manufacturers of sport yachts and motor yachts; and Intrepid Powerboats, a premier manufacturer of powerboats.
Meanwhile, MarineMax also offers financing and insurance services as well as digital technology products to connect boaters to a network of marinas, dealers, and marine professionals.
In addition, it operates MarineMax Vacations in Tortola, British Virgin Islands, which offers luxury boating adventures to vacationers.
MarineMax has also made 15 acquisitions since April 2019.
Inner Circle: How MarineMax’s ecosystem and finances took shape
On January 5, 2023, the company announced completion of its takeover of Boatzon, a retail technology platform dedicated to the marine industry. The platform aims to let boat buyers shop, pay for, and insure their purchases online. The acquisition provides MarineMax with what it believes is the digital platform to compete in the evolving world of boat retail.
On September 25, 2023, the company announced that its subsidiary Fraser Yachts had agreed to acquire a controlling interest in Atalanta Golden Yachts, a leading charter management agency based in Athens, Greece.
It is, in fact, one of the top charter management agencies in Greece. Founded in 2006, it arranges luxury charters for European and Caribbean customers.
While terms were not disclosed, the acquisition is expected to add to MarineMax’s earnings in the first full year. The acquisition solidifies MarineMax’s position within the luxury yacht business.
The company’s revenue rose steadily in the last five years from 2019 to 2023 (fiscal years end September 30). Revenue increased 93.6%, from $1.24 billion in 2019 to $2.39 billion in 2023. In 2024 (fiscal year ended September 30, 2024), revenue rose 1.5%, to $2.43 billion.
Earnings climbed 211.8% over the same period, from $37.3 million, or $1.63 a share, in 2019 to $116.8 million, or $5.21 a share, in 2023. In 2024 (fiscal year ended September 30, 2024), earnings fell 58.0%, to $49.1 million, or $2.13 a share.
Meanwhile, in the three months ended September 30, 2024, MarineMax’s revenue fell 5.3% to $563.1 million from $594.6 million a year earlier. Revenue was lower primarily reflecting lower boat sales due to the closure of boat and yacht insurance markets as Hurricane Helene approached Florida.
Excluding one-time items, the company earned $5.5 million, or $0.24 a share. That was down 64.9% from $15.8 million, or $0.69. Higher costs, including interest on debt, hurt profits.
MarineMax’s total debt is now $1.1 billion, or a high 1.6 times its $701.6 million market cap.. The company took on significant debt when, in October 2022, it completed the acquisition of Island Global Yachting LLC (IGY Marinas) for $480.0 million. MarineMax also holds cash of $224.3 million.
Growth by acquisition adds risk to MarineMax’s shares, as does the company’s high debt. At the same time, its business is sensitive to economic slowdowns and falling consumer confidence. Extreme weather events such as the recent Hurricane Helene pose additional risk.
The company is a market leader, and the stock trades at 13.6 times the forecast 2025 earnings of $2.33 a share. However, that low P/E ratio reflects investor fears that it will fail to maintain its growth.
Recommendation in Pat’s Inner Circle: MarineMax is okay to hold, but only for aggressive investors.
TSI’s Scott Clayton has unearthed a sextet of dividend-paying gems hiding in plain sight. These companies, spanning industries from railway giants to potato powerhouses, have seen their share prices take a beating in 2024. But don’t be fooled by their temporary fall from grace – our rigorous TSI Dividend Sustainability Rating System suggests these stocks are coiled springs, ready to bounce back with a vengeance.
We’ve identified six companies that not only maintain rock-solid dividend credentials but also possess the financial firepower and market positioning to deliver potentially explosive returns in 2025 and beyond. These aren’t just survivors; they’re thrivers in waiting.
Picture this: a Canadian railway titan, a telecom behemoth, a global fertilizer leader, a tools manufacturing legend, a French fry empire, and an auto parts kingpin. Sounds like an eclectic mix, right? That’s by design. Our research suggests this diverse group of dividend aristocrats, temporarily bruised but far from beaten, represents a unique opportunity for investors willing to see past the current market myopia.
Excerpt from theglobeandmail.com, December 5, 2024
What are we looking for?
Prime stock picks for new buying – that’s despite their appeal as candidates for tax-loss selling!
The screen
The lure of cutting taxes can spur investors to make costly mistakes. Chief among them – especially this time of year – is the urge to dump high-quality stocks that are down in order to realize a tax loss. Still, the mistake of others can offer you a bargain as the best of these stocks often rebound sharply in the New Year.
In fact, some of the lowest-risk, highest-profit investments you’ll ever make come about because you’ve bought a good stock when other investors were ignoring its value and selling it, particularly during tax-loss season.
We started this search with an extensive list of dividend-paying stocks, before singling out those further battered by tax-loss selling. They otherwise have promising outlooks bolstered by leading market positions. Our system awards points to a stock based on key factors:
One point for five years of continuous dividend payments – two points for more than five;
Two points if it has raised the payment in the past five years;
One point for management’s commitment to dividends;
One point for operating in non-cyclical industries;
One point for limited exposure to foreign currency rates and freedom from political interference;
Two points for a strong balance sheet, including manageable debt and adequate cash;
Two points for a long-term record of positive earnings and cash flow to cover dividends;
One point if the company’s an industry leader.
Companies with 10 to 12 points have the most-secure dividends, or the highest sustainability. Those with seven to nine points have above-average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.
More about TSI Network
TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.
Number Cruncher Stocks: Six turnaround candidates for your long-term portfolio
What we found
Our TSI Dividend Sustainability Rating System generated six stocks with sustainable dividends despite significant share price declines over 2024.
Canadian National Railway Co. (with a 2.2% yield), based in Montreal, operates Canada’s largest railway. The stock is down 14.9% from its March 2024 high.
Telus Corp. (7.3%), headquartered in Vancouver, is Canada’s largest wireless carrier. It also sells landline phone, Internet, TV, and security services in B.C., Alberta and eastern Quebec. The shares are down 11.5% from their January 2024 high.
Nutrien Inc. (4.4%), based in Saskatoon is the world’s largest producer of agricultural fertilizers. The stock is down 18.7% from its May 2024 high.
Stanley Black & Decker Inc. (3.8%), headquartered in Connecticut, is one of the world’s largest makers of hand and power tools. The company’s shares are down 22.4% from their recent September 2024 high.
Lamb Weston Holdings Inc. (1.8%), based in Idaho, is a leading producer of frozen French fries, potatoes and other packaged vegetables. The stock is down 30.3% from its January 2024 high.
Genuine Parts Co. (3.2%), based in Atlanta, Georgia, is a leading seller of replacement auto parts. It also distributes industrial parts such as bearings, seals, pumps and hoses. The shares are down 23.4% from their April 2024 high.
Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
The Growing Power of Dividends
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