These two blue chip ETFs hold mostly large-capitalization, widely traded stocks on the Canadian exchange. Both funds mirror, or track, the performance of major stock market indexes as opposed to narrower ones focused on resources or themes, such as solar power or biotech.
Blue chip ETFs stand in contrast to many trendy funds. Promoters of many of those newer ETFs are in the business to make money from the products they provide. This is a legitimate objective, but sometimes promoters aim to capitalize on short-term fads to appeal to investors, a key consideration in active vs passive investing. These products can deliver poor results in the long term.
Of course, even with these blue chip ETFs you pay brokerage commissions to buy and sell, but their low management fees give them a cost advantage over most mutual funds.
ISHARES S&P/TSX 60 INDEX ETF is a buy. The ETF (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way for you to buy the top companies listed on the TSX. Specifically, the fund’s holdings represent the S&P/TSX 60 Index. It focuses on the 60 largest, most heavily traded stocks on the exchange.
The ETF began trading on September 28, 1999. Investors pay an MER of just 0.18%. The units give you a 3.1% yield.
The S&P/TSX 60 Index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few companies we would not include.
The quality of the ETF’s holdings should drive your future gains: its top stocks are Royal Bank, 7.7%; TD Bank, 6.4%; Shopify, 5.0%; Enbridge, 4.2%; CPKC, 4.0%; CN Rail, 4.0%; Bank of Montreal, 3.9%; Canadian Natural, 3.9%; and Bank of Nova Scotia, 3.1%. When considering active vs passive investing, the iShares S&P/TSX 60 Index ETF represents a classic passive approach.
Recommendation in Canadian Wealth Advisor: iShares S&P/TSX 60 Index ETF is a buy.
How to Make Money with ETFs
Learn everything you need to know in 'The ETF Investor's Handbook' for FREE from The Successful Investor.
ETFs Guide for Canadian Investors: Find the best way to invest in ETFs with low fees, low risk & high satisfaction.
ISHARES CANADIAN SELECT DIVIDEND INDEX ETFis a buy.The fund(Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highest-yield Canadian stocks. The ETF also considers dividend growth and payout ratios to make its selections.
The weight of any one stock is limited to 10% of the fund’s assets. Its MER is 0.55%. The ETF, which began trading on September 28, 1999, yields a high 4.1%.
Most market indexes are set up for investors so that the stocks in the index are those with the highest market capitalization and are also the most widely traded. However, the iShares Canadian Select Dividend Index ETF focuses on the 30 stocks that it sees as having the highest dividend yields; it also considers their prospects for dividend growth and the sustainability of their dividend payouts.
That means this ETF represents an interesting middle ground in the active vs passive investing spectrum. As a result, you pay a higher MER.
The fund’s top holdings are Bank of Montreal at 7.9%; Canadian Tire, 7.6%; Royal Bank, 6.9%; Bank of Nova Scotia, 5.1%; National Bank, 5.0%; TD Bank, 5.0%; CIBC, 4.8%; TC Energy, 4.7%; and BCE, 4.4%.
In summary, this analysis examines two distinct ETF offerings in the Canadian market, each representing different investment philosophies and strategies. The iShares S&P/TSX 60 Index ETF (XIU) offers broad exposure to Canada’s largest companies through a passive investment approach, with a notably low MER of 0.18%. Its diversified holdings across major sectors and blue-chip companies make it an attractive core holding for long-term investors seeking market-representative returns.
In contrast, the iShares Canadian Select Dividend Index ETF (XDV) employs a more targeted strategy, focusing on 30 high-yield Canadian stocks with strong dividend characteristics. With a higher MER of 0.55%, it offers a more specialized approach for income-focused investors. The fund’s methodology, which considers dividend growth and payout ratios, provides a middle ground between purely passive and active management.
Both ETFs serve distinct investment objectives: XIU offers broad market exposure with minimal costs, while XDV caters to income-seeking investors willing to pay higher fees for a more focused strategy. For investors building a diversified portfolio, understanding these differences is crucial in aligning their investment choices with their financial goals and risk tolerance.
Recommendation in Canadian Wealth Advisor: iShares Canadian Select Dividend is a buy.
This article was originally published in 2016 and is regularly updated.
Cisco Systems a networking technology leader is strategically repositioning itself through intelligent acquisitions, technological innovation, and a decisive shift toward software and AI-powered solutions. By exploiting its strong financial position and focusing on high-growth sectors, the company is creating a robust platform for future technological leadership.
The company’s disciplined approach to workforce management, combined with significant investments in cybersecurity and AI technologies, positions it to capitalize on emerging market opportunities and deliver long-term shareholder value.
The stock trades at 16.3 times the company’s forward earnings forecast.
CISCO SYSTEMS INC. (Nasdaq symbol CSCO; www.cisco.com) is a leading maker of products that link and manage computer networks.
In 2015, the company began cutting its reliance on cyclical computer hardware products by expanding its software business. That lets it offer its customers a better combination of products and services. Cisco also earns steady revenue streams from selling its software as an ongoing service.
Then in March 2024, Cisco completed its acquisition of Splunk Inc. (Nasdaq symbol SPLK) for $28 billion. The firm makes software that lets organizations analyze their data in real time. The purchase will enhance Cisco’s current cybersecurity software business. Their combined expertise in AI will also help clients better anticipate and prevent cyberattacks.
In March 2024, Cisco completed its acquisition of Splunk Inc. (Nasdaq symbol SPLK) for $28 billion. The firm makes software that lets organizations analyze their data in real time. The purchase will enhance Cisco’s current cybersecurity software business. Their combined expertise in AI will also help clients better anticipate and prevent cyberattacks.
The Growing Power of Dividends
Learn everything you need to know in '7 Winning Strategies for Dividend Investors' for FREE from The Successful Investor.
The Best Canadian Dividend Stocks to Buy: REITS Canada and other Top Canadian Dividend Stocks.
Despite that purchase, the company’s revenue in its fiscal 2025 first quarter, ended October 26, 2024, fell 5.6%, to $13.84 billion from $14.67 billion a year earlier. Even so, that beat the consensus forecast of $13.78 billion.
The lower revenue is mainly due to a 9.2% drop in sales of new equipment (73% of total revenue). However, demand for software and services (27%) rose 5.6%.
Earnings in the quarter, excluding unusual items, declined 18.0%, to $0.91 a share (or a total of $3.67 billion) from $1.11 a share (or $4.53 billion). That still topped the $0.87 consensus estimate.
Cisco continues to shift its operations towards a subscription model instead of one-time sales. That gives its more-predictable revenue streams. In the latest quarter, annualized recurring revenue grew 22% to $29.9 billion.
The company holds cash of $18.7 billion.
Dividend Stocks: Workforce cuts redirect resources to AI and innovative software at Cisco
Cisco is cutting 7% of its workforce under a plan to free up resources for investment in faster-growing areas, including adding AI technologies. The company expects severance payments and other costs will total up to $1 billion.
The company continues to see strong demand for products related to artificial intelligence (AI). Orders related to AI totalled $300 million in the latest quarter and should reach $1.0 billion for all of fiscal 2025.
Investors can expect Cisco to earn $3.58 a share in fiscal 2025, and the stock trades at 16.3 times that estimate. That’s an attractive P/E as the company spends a high 15% of its revenue on research.
With the April 2024 payment, Cisco raised your quarterly dividend by 2.6%, to $0.40 a share from $0.39. The new annual rate of $1.60 yields a solid 2.8%.
Recommendation in Dividend Advisor: Cisco Systems Inc. is a buy.
Well Health Technologies represents a transformative investment opportunity as it leverages technology to revolutionize medical service delivery across North America. With a diverse portfolio of specialized services and innovative telehealth solutions, the company is strategically positioned to capture growing market demand across multiple niches.
Robust financial performance, including 23.1% revenue growth and expanding patient visit volumes, underscores the firm’s potential for sustained expansion and shareholder value creation.
WELL HEALTH TECHNOLOGIES CORP. (Symbol WELL on Toronto) owns and operates Canada’s largest network of clinics supporting primary care, specialized care and diagnostics services. As of September 30, 2024, the company had a total of 110 physical facilities across Canada.
In the U.S., WELL Health provides healthcare services and solutions targeting specialized markets such as the gastrointestinal market, women’s health, primary care, and mental disorders.
WELL Health USA Patient Services consists of three assets: CRH Medical, Provider Staffing, Circle Medical and Wisp.
CRH delivers specialized care services focused on providing gastroenterologists throughout the U.S. with innovative services and products for the treatment of gastrointestinal (GI) diseases. Through CRH, WELL gains access to the U.S. healthcare system, including anesthesia services for patients undergoing endoscopic procedures at over 148 Ambulatory Surgery Centers (ASCs) and GI clinics across 20 states.
Circle Medical is a primary care provider offering a blend of virtual and in-person care, with a specialization in mental health related care. Circle Medical is headquartered in San Francisco, with a research and development office in Montreal, Canada.
Circle Medical’s team of healthcare providers includes primary-care physicians, nurse practitioners and mental health specialists. Circle Medical offers virtual care services at 24 physical facilities in 26 states in the U.S. Circle Medical has developed its own technology solutions including a mobile app that allows patients to schedule appointments, receive virtual patient care and access their medical records.
For a rising portfolio
Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor.
Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.
Wisp is an online provider of women’s health and e-prescription services. Wisp offers a range of services that address women’s health needs, including birth control, treatment for urinary tract infections, and prescription skincare.
One of Wisp’s unique features is its focus on telemedicine and e-prescription services, which allows healthcare providers to send prescriptions directly to a patient’s preferred pharmacy or directly to their homes. The e-prescription capabilities make it easier for patients to receive and manage their medications.
Meanwhile, in addition to providing patient services, WELL Health sells its own suite of technology software and solutions to medical clinics and healthcare practitioners. WELL Health’s practitioner platform includes Electronic Medical Records, telehealth platforms, practice management, billing, revenue cycle management, digital health apps and data protection solutions.
Growth Stocks: WELL Health Technologies’ 23.1% revenue surge leverages tech and specialized services
Meanwhile, in addition to providing patient services, WELL Health sells its own suite of technology software and solutions to medical clinics and healthcare practitioners. WELL Health’s practitioner platform includes Electronic Medical Records, telehealth platforms, practice management, billing, revenue cycle management, digital health apps and data protection solutions.
In the quarter ended September 30, 2024, total revenue jumped 23.1%, to $251.7 million from $204.5 million a year earlier. The big gain was mostly due to internal growth in patient activity. WELL Health delivered 1.48 billion total patient visits in the latest quarter, up 40.6% from a year ago.
Excluding one-time items, the company made $13.0 million, or $0.05 a share, in the quarter. That was down 1.0% from $12.9 million, or $0.05. WELL Health’s profits rose less than revenues, as expenses were higher, including the cost of integrating new acquisitions.
Growth by acquisition adds risk, but WELL Health aims to cut that risk by buying complementary businesses. As well, the Canadian health-care sector is a government-backed, recession-resilient industry. What’s more, the expansion of telehealth services spurred by COVID-19 is likely to continue going forward.
Recommendation in Power Growth Investor: Well Health Technologies Corp. is a buy for aggressive investors.
The TJX Companies demonstrates exceptional resilience through its unique “treasure hunt” shopping model, consistently delivering financial growth and shareholder returns across multiple international markets. With strategic expansions, a proven track record of payout increases, and an experienced merchandise team, the company offers investors a compelling opportunity in a challenging retail landscape.
Management’s commitment to international growth and ability to navigate economic uncertainties make this an attractive investment opportunity for the long term.
THE TJX COMPANIES (New York symbol TJX; tjx.com) is a leading off-price retailer of clothing, accessories and home fashions. Off-price retailers purchase merchandise at below-wholesale prices and charge less than retail prices.
Through their shares, investors tap a network of stores. In the U.S., TJX operates 1,331 T.J. Maxx locations, 1,219 Marshalls, 941 HomeGoods, 109 Sierra Trading Post outlets and 67 HomeSense locations. In Canada, it has 307 Winners outlets, 160 HomeSense locations and 109 Marshalls stores. TJX also operates in Europe, with 653 TK Maxx and 77 Homesense stores; and in Australia, with 84 TK Maxx outlets.
TJX is expanding its global footprint through a joint venture in Mexico. Mexican retailer Grupo Axo will own 51% of the joint venture, and TJX will own 49%.
The collaboration will incorporate Axo’s existing off-price, brick-and-mortar retail operations in Mexico, encompassing more than 200 stores under its Promoda, Reduced, and Urban Store brands.
The new joint venture should be a good fit for TJX. It draws on TJX’s extensive experience as a global off-price retailer, plus Axo’s established network of off-price stores and the company’s three decades of operational expertise in Mexico.
Growth Stocks: TJX’s ‘Treasure hunt’ model continues to outperform despite challenges
Meanwhile, overall revenue in the quarter ended November 2, 2024, rose 6.0%, to $14.06 billion from $13.27 billion a year earlier. Comparable same-store sales increased 3.0%.
TJX reported earnings per share of $1.14 in the quarter, up 10.7% from $1.03.
The company raised its quarterly dividend by 12.8% with the June 2024 payment, to $0.375 from $0.3325 a share. The shares yield 1.2%.
The increase was the company’s 27th over the last 28 years.
Going forward, apart from inflation hurting consumer confidence, TJX, like most retailers, faces challenges from labour shortages and rising freight costs. Meantime, rather than shifting online in a major way, the company will stick with its successful formula. To find attractive deals for its customers, it depends heavily on the skills of its merchandise buyers, many of whom have been with the company for decades. TJX stores then quickly turn over limited quantities of products—all sold at bargain prices.
The result is an ongoing treasure hunt that spurs regular store visits and encourages consumers to buy immediately rather than risk someone else snatching up a deal. Once the retail landscape fully regains its pre-COVID footing, TJX’s winning formula will continue to be a big plus for both its customers and its investors.
A Member of Pat McKeough’s Inner Circle recently asked for his advice on a company that specializes in architectural metal work – ADF Group.
Pat likes the company’s healthy backlog, margin expansion, low debt, and diversified capabilities. However, he notes that the company’s client list is highly concentrated – this poses a higher level of risk for all but more aggressive investors.
ADF Group (Symbol DRX on Toronto; www.adfgroup.com), designs and engineers architectural metal work, including connections, heavy steel built-ups, and miscellaneous products. It provides these services from a 630,000-square-foot fabrication plant in Quebec and a 100,000-square-foot fabrication plant in Montana.
The company’s clients include general contractors, project owners, engineering firms and project architects, structural steel erectors, and other steel structure fabricators. Examples of its work include the 440-foot-tall spire at the top of the One World Trade Center tower in New York, and the three-dimensional trusses for the Mercedes-Benz Stadium in Atlanta.
ADF pays a semi-annual dividend of $0.02 a share in May and October. Its $0.04 annual payment yields 0.42%.
On December 11, 2023, the company announced it had signed $234.0 million in new contracts in the U.S. for work over the next couple of years. The largest of these contracts is for the second construction phase of a pharmaceutical company’s facilities in the U.S. Midwest.
Inner Circle: ADF Group’s revenue dips but earnings rocket 51.8% from a concentrated client base
In the quarter ended July 31, 2024, ADF’s revenue decreased by 6.6%, to $74.9 million from $65.0 million a year earlier. The decrease came mostly from construction site preparation delays related to one client. The company’s order backlog at the end of the quarter was $402.3 million. Projects currently in the backlog extend to January 31, 2026.
The company earned $16.0 million, or $0.51 a share, in the quarter. That’s 51.8% higher than $10.5 million, or $0.32, a year earlier.
ADF had $40.2 million in long-term debt as of July 31, 2024; that represents a low 14% of its market cap. It finished the quarter with $76.0 million in cash.
The company has a concentrated client base—three clients account for 82% of its revenue.
That kind of client concentration adds risk, but ADF is adding to its backlog, and the company continues to report rising sales in its competitive markets.
Recommendation in Pat’s Inner Circle: ADF Group is okay to hold, but only for aggressive investors.
Increased government spending on public infrastructure projects should spur demand for construction equipment and related services from Finning International. That should also let it keep raising its dividend.
With a strong balance sheet showing just 26% debt-to-market-cap, $298M in cash, and proven recession resistance, the company continues its 23-year tradition of dividend growth.
The recent 10% dividend hike demonstrates management’s confidence in future cash flows, while the stock trades at 9.8 times the company’s forward earnings forecast. With both strong financials and infrastructure spending tailwinds, this is one to hold for the long term.
FINNING INTERNATIONAL INC. (Toronto symbol FTT; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada but also Chile, Argentina, Bolivia, the U.K. and Ireland. Its main customers are in the oil and gas, mining, forestry products and construction industries.
Finning continues to benefit from rising commodity prices, such as for copper. That reflects increasing demand from mining firms for its products. It’s also benefitting from increasing government spending on new infrastructure projects.
Canada is Finning’s biggest market, with 54% of net revenue. Other markets in order of revenue contribution are South America (33%) and the U.K. & Ireland (13%).
The servicing of equipment provides 56% of revenue, while the sale of new equipment provides 33%; the balance comes from the sale of used equipment, rentals and fuel.
The Profits from Hidden Value
Learn everything you need to know in 7 Pro Secrets to Value Investing for a FREE special report for you.
Canadian Value Stocks:
How to Spot Undervalued Stocks
PLUS! Our Top 4 Value Stocks
Value Stocks: Finning International’s cheap shares are boosted by a 23-year dividend growth streak
Finning’s shares took a drop in mid-November 2024. That was mainly due to weaker-than-expected demand for support services at its Canadian, and U.K. and Ireland operations. However, sales of new and used equipment remain strong.
Overall revenue in the three months ended September 30, 2024, gained 4.2%, to $2.54 billion from $2.44 billion a year earlier. Even so, that missed the consensus forecast of $2.56 billion.
Finning continues to make progress with a plan to streamline its operations and reduce the size of its workforce. If you exclude severance costs and other unusual items, earnings in the quarter fell 13.1%, to $0.93 a share from $1.07. That also missed the $1.04 consensus estimate.
The company also continues to enjoy strong demand for new equipment. Its backlog as of September 30, 2024, was $2.3 billion, up from $2.0 billion at the end of 2023. After the end of the quarter, it received an order worth $250 million from a mining company in South America, and $90 million of new orders from mining firms in Canada.
Meanwhile, the company’s balance sheet is still sound. It ended the latest quarter with cash of $298 million, and its long-term debt of $1.38 billion is a moderate 26% of its market cap. Finning’s strong balance sheet cuts its cyclical risk.
Finning will probably earn $3.91 a share for all of 2025, and the stock trades at just 9.8 times that forecast.
With the June 2024 payment, Finning raised your quarterly dividend by 10.0% to $0.275 from $0.25 a share. The new annual rate of $1.10 a share yields 2.9%. Finning has now raised the annual dividend rate each year for the past 23 years.
Wajax Corp. – an industrial equipment leader offers compelling value through its diversified customer base and recent strategic expansion into hydraulic services.
Management’s recent 6.1% dividend hike helped push the yield to its current attractive level, demonstrating confidence in the firm’s prospects despite a temporary revenue dip from a cycled-off mining contract.
Even with a defensive business model combining equipment sales and maintenance services, plus strong growth prospects in infrastructure and resources, the stock still trades at just 8.7 times the company’s forward earnings forecast.
WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services cranes, forklifts and other heavy equipment. Wajax also provides related parts and systems such as ball bearings, hoses, diesel engines and transmissions. The company’s customers are spread across the resources, construction, manufacturing and transportation industries.
Last year, Wajax acquired Sault Ste. Marie, Ontario-based Beta Fluid Power Ltd. and Beta Industrial Ltd. The purchase price has not yet been disclosed.
For a rising portfolio
Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor.
Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.
Beta Fluid is a leading regional supplier of hydraulic and pneumatic equipment for use in the industrial, mining and construction sectors. It also offers hydraulic and pneumatic maintenance, repair and replacement services, including mobile services. Beta Industrial provides a wide range of on-site facility repair and maintenance services.
Dividend Stocks: High payout is secure despite a revenue dip at Wajax
In the quarter ended September 30, 2024, overall revenue fell 5.6%, to $481.0 million from $509.7 million a year earlier. Equipment sales declined in part as a result of the delivery of a large mining shovel in the third quarter of 2023, which did not recur this year. Excluding one-time items, Wajax earned $9.6 million, or $0.44. That was down 53.6% from $20.7 million, or $0.96.
The company raised its quarterly dividend by 6.1% with the April 2024 payment, to $0.35 a share from $0.33. The stock now yields a high 6.0%.
We continue to recommend investors diversify their Finance sector holdings with non-bank stocks. Here’s one that dominates its niche market, which helps cut your risk. What’s more, it’s incorporating artificial intelligence (AI) technology to improve its product and services performance. That should spur growth for years to come.
That’s because this investment management leader offers a compelling combination of current income and growth potential from strong demographic tailwinds from retiring baby boomers.
With a 10.3% five-year dividend growth rate and expanding international presence, the stock trades at 13.2 times the company’s forward earnings forecast.
T. ROWE PRICE GROUP INC. (Nasdaq symbol TROW; www.troweprice.com) has its fee income rise and fall with the value of the mutual funds and other securities it manages.
The company’s fee income rises with the value of the mutual funds and other securities it manages. Thanks to the strong stock market, T. Rowe Price had $1.63 trillion in assets under management as of September 30, 2024, up 12.4% from $1.45 billion at the start of the year. Investors outside the U.S. account for roughly 9% of the company’s assets under management.
Thanks to the strong stock market and rising assets under management, the company’s revenue in the third quarter ended September 30, 2024, rose 6.9%, to $1.79 billion from $1.67 billion a year earlier.
The Growing Power of Dividends
Learn everything you need to know in '7 Winning Strategies for Dividend Investors' for FREE from The Successful Investor.
The Best Canadian Dividend Stocks to Buy: REITS Canada and other Top Canadian Dividend Stocks.
Despite higher costs—for payroll, advertising, and new technology—earnings before unusual items rose 17.4%, to $586.5 million from $499.5 million. Due to fewer shares outstanding, earnings per share rose 18.4%, to $2.57 from $2.17.
Dividend Stocks: T. Rowe Price’s 38-year dividend growth streak at good valuation
The company’s long-term prospects remain bright, particularly as more baby boomers retire over the next few years. A new plan to cut 2% of its workforce and consolidate office space should also improve profitability.
The company should earn $9.42 a share in 2025. It trades at a reasonable 13.2 times that earnings forecast.
T. Rowe Price last raised your quarterly dividend by 1.6% with the March 2024 payment, to $1.24 a share from $1.22. The annual rate of $4.96 yields a high 4.0%. T. Rowe Price has now increased its annual dividend payment for 38 consecutive years.
Over the past five years, that dividend rose by an average 10.3% annually. The company’s TSI Dividend Sustainability Rating is Above Average.
Recommendation in Dividend Advisor: T. Rowe Price Group Inc. is a buy.
This industrial transformation story offers compelling value as the company completes its pivot from pipeline coatings to higher-margin plastics and electrical products. With $265M in recent divestitures strengthening its balance sheet, Mattr is well-positioned to execute its growth strategy.
A $150m modernization plan includes two new operational U.S. facilities expected to add $100m to annual revenue while expanding profit margins from 16.9% to over 20% by 2030.
Combined with aggressive share buybacks and projected EPS growth from $0.93 to $1.44 next year, the stock trades reasonably at 8.9 times the company’s forward earnings forecast.
MATTR CORP.(Toronto symbol MATR; www.mattr.com) was formerly called Shawcor Ltd. (old symbol SCL), the company recently sold most of its pipeline coating business to Tenaris S.A. (New York symbol TS) for $241.2 million.
The remaining firm makes plastic tanks and industrial products such as electrical cables and sheaths.
The company recently sold its remaining pipeline coating business, Thermotite, which operates a plant in Serra, Brazil.
Mattr will receive $17.5 million U.S. (about $24 million Canadian) when it completes the sale in the next few months.
The cash will help fund Mattr’s plan to spend $150 million to modernize its facilities. These improvements will likely lift its projected earnings from $0.93 a share in 2024 to $1.44 in 2025. The stock trades at a low 8.9 times that 2025 forecast.
Meanwhile, Mattr has now completed building two new composite (plastic) production facilities in Texas and South Carolina as part of that plan. They should reach normalized production levels in 2026, which would add $100 million to the company’s annual revenue of $911 million.
For a rising portfolio
Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor.
Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.
Mattr is also modernizing two plants that make wires, cables and related products. It expects to complete this project in mid-2025.
The company also recently agreed to acquire AmerCable Inc. Based in Arkansas, this firm makes a variety of power cables and wires for industrial customers.
The company will pay $280 million U.S. (or $390 million Canadian) when it completes the purchase by the end of 2024. The new operations should add $75 million to Mattr’s annual EBITDA (earnings before interest, taxes, depreciation and amortization charges).
Growth Stocks: Modernized plants will boost sales and profits at Mattr
The stock is down from its recent peak of $18 in July 2024 mainly due to concerns over its plan to spend $150 million to modernize its facilities. A potential economic slowdown has also weighed on the stock.
Overall, the plan should increase Mattr’s annual sales by over 10% a year through 2030 and lift its gross profit margins from 17% to more than 20% by 2030.
Mattr’s revenue in the three months ended September 30, 2024, rose 2.0%, to $226.2 million from $221.9 million a year earlier. Strong sales of wire and cable products offset lower shipments of plastic pipes due to the timing of certain orders. The latest revenue figure also missed the consensus forecast of $239.7 million.
If you exclude unusual items, Mattr earned $0.23 a share (or a total of $15.39 million) in the latest quarter, down 79.3% from $1.11 a share (or $77.05 million). That’s due to higher sales of less-profitable products, as well as the costs related to building new facilities. Even so, the latest earnings still topped the $0.21-a-share consensus estimate.
Mattr suspended its quarterly dividend of $0.15 a share in 2020 in response to the COVID-19 disruptions.
However, the company continues to reward investors with share buybacks. Stock repurchases reduce the number of shares outstanding. That boosts earnings per share since profit is divided among fewer shares. The higher per-share earnings then help spur market interest in the stock and so lift share prices.
Under its recent buyback program, Mattr bought 3.4 million shares for a total of $52.2 million.
The company has now received approval for its new plan to buy back up to 4.98 million of its shares (7.5% of the total outstanding) over the next year.
A Member of Pat McKeough’s Inner Circle recently asked for his advice on Duolingo – a company that’s one of the leading language learning apps with over 800 million downloads.
Pat likes the firm’s strong brand recognition and steady growth in active users, revenues and earnings. The firm is also being innovative with new product offerings. However, Pat cautions that the shares are priced at a very high valuation relative to earnings and could be very volatile, especially with plenty of competition in the field.
Duolingo Inc. (Symbol DUOL on Nasdaq; www.duolingo.com), is the top-grossing education app on Google Play and the Apple App Store. It has more than 800 million downloads.
Founded in 2011, the company offers courses on over 40 distinct languages—from the world’s most spoken, such as Spanish and French, to endangered languages like Hawaiian, Navajo and Scottish Gaelic. It also offers fictional languages from TV shows like Star Trek and Game of Thrones.
The company has a “freemium” business model: the app and the website are accessible free of charge, although Duolingo also offers a premium service, Super Duolingo (formerly called Duolingo Plus), for a subscription fee. Duolingo has locations in the U.S., China and Germany.
Notably, the company believes that there are more people in the U.S. learning languages on Duolingo than there are foreign language learners in all U.S. high schools combined. In addition, there are more people learning certain languages on Duolingo, such as Irish and Hawaiian, than there are native speakers of those languages worldwide.
For a rising portfolio
Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor.
Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.
Duolingo went public on July 27, 2021, selling shares through its IPO for $102 each. The company started out as a hot new issue. It initially set its proposed IPO price at $85 to $95 but was able to raise that on anticipated demand for its shares. It doubled in price within little more than a month.
Revenue rose 47.3%, from $250.8 million in 2021 (the business’s first year as a public company) to $369.5 million in 2022. In 2023, revenue rose 43.7%, to $531.1 million. Duolingo lost $60.1 million, or $1.52 a share, in 2021. In 2022, it lost $59.6 million, or $1.51 a share. In 2023, the company made $16.1 million, or $0.39 a share.
Inner Circle: Duolingo’s business and share price strengthens with innovation a key contributor
For the quarter ended September 30, 2024, revenue was $192.6 million, up 39.9% from $137.6 million a year earlier. More specifically, subscription revenue grew by 48.9%, to $17.6 million, and now accounts for 82% of overall revenue.
Daily active users (DAUs) rose 53.7%, to 37.2 million from 24.2 million while monthly active users (MAU) grew 36.1%, to 113.1 million from 83.1 million.
Duolingo had 8.6 million paid subscribers at the end of the latest quarter, 48.3% higher than 5.8 million a year ago. The company’s paid subscribers as a percentage of MAUs was 7.6% of the total.
Duolingo generated a profit in the latest quarter of $23.4 million, or $0.53 a share, up sharply from $2.8 million, or $0.07 a share.
The stock shot up to around $198 shortly after the IPO. It then fell to as low as $60 in 2022. However, the shares are up 55.2% over the last year and are now well above the IPO price.
Its business prospered during the pandemic, and the company now appears to be building on that rapid growth. It remains the leader in language instruction, but to keep growing, it must keep successfully expanding in its highly competitive market.
One way it’s doing that is through developing new products. For instance, it recently announced the launch of Duolingo Max, a higher tier subscription that harnesses the power of generative AI. Duolingo Max aims to give subscribers an even more engaging way to learn by chatting with Duolingo characters and receiving personalized explanations of the learner’s mistakes.
The company has also announced a strategic shift to a multi-subject product, with the addition of math and music courses to the mobile app. Moreover, management has announced a new curriculum designed for English learners at more advanced levels of language proficiency.
Recommendation in Pat’s Inner Circle: Duolingo Inc. is a hold.
For a rising portfolio
Learn everything you need to know in
'How to Find the Best Growth Stocks'FREE Special Report from The Successful Investor.
Canadian Growth Stocks:
CGI Group, CAE Inc., Fortis Inc. Stock and more.
Get Your FREE Report Now:
How to Find the Best Growth Stocks
X No, thanks. I don’t want to make big profits from growth stocks.
Privacy Policy and Terms of Use
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
The privacy of the site/store visitor is very important to TSI Network, and is respected at all times. The information we receive from customers helps us to personalize and continually improve your online experience at TSI Network.
We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
Automatic Information: We receive and store certain types of information whenever you interact with us. For example, like many websites, we use "cookies," and we obtain certain types of information when your web browser accesses TSI Network.
Information from Other Sources: For reasons such as improving personalization of our service (for example, providing better product recommendations or special offers that we think will interest you), we might receive information about you from other sources and add it to our account information. We also sometimes receive updated delivery and address information from our shippers or other sources so that we can correct our records and deliver your next purchase or communication more easily.
We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
Although you may be able to access some of our websites without being required to register or provide personal information, certain websites and sections of our websites may require registration. In addition, if you choose to contact us to ask a question, we will collect your personal information so that we can respond to your question.
To make the visitor’s experience on our website easier, we may use per-session “cookies” (session identifiers) to track the state of the visitor session. This “cookie” is destroyed when your session with our website is over.
Cookies are alphanumeric identifiers that we transfer to your computer's hard drive through your web browser to enable our systems to recognize your browser and to provide features like "Remember Me" for our paying subscribers. Cookies are also used during the ordering process to help ensure your order is handled correctly. We do not extract any information about individual users or their computers as a part of this process.
The "Help" portion of the toolbar on most browsers will tell you how to prevent your browser from accepting new cookies, how to have the browser notify you when you receive a new cookie, or how to disable cookies altogether. However, cookies allow you to take full advantage of some of TSI Network's most useful features, and may be required to access certain areas of our website.
Internet Protocol (or IP) addresses are collected for all visitors to this site. This information is used for the purposes of traffic analysis.
Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
Purchases of Merchandise: TSI Network websites may offer individuals the opportunity to purchase branded or other merchandise online. In connection with those purchases, customers may be asked to submit personal information, such as shipping addresses and credit card information, which is required to complete the transaction. TSI Network may also offer a Membership program, through which purchasers of its products may receive discounts on their online purchases. Membership registration may involve the submission of personal information to TSI Network and assignment of a user ID and password.
Agents: We employ other companies and individuals to perform functions on our behalf. Examples include fulfilling orders, delivering packages, sending postal mail and email, removing repetitive information from customer lists, analyzing data, providing marketing assistance, processing credit card payments and providing customer service. They have access to personal information needed to perform their functions, but may not use it for other purposes.
Promotional Offers: We may make our postal mailing list available to organizations offering products or services that might interest you. If you prefer NOT to receive these offers, please send an email with your name and address to service@tsinetwork.ca with "Do Not Rent Name" in the subject line. We do NOT make our email list available outside our organization.
Protection of TSI Network and Others: We release account and other personal information when we believe release is appropriate to comply with law; enforce the terms of the Legal notices that accompany this policy; or protect the rights, property or safety of TSI Network, our users or others. This includes exchanging information with other companies and organizations for fraud protection and credit risk reduction.
In addition to these limited disclosures of personal information, TSI Network may provide its affiliates or unaffiliated third parties with aggregate information about visitors to our sites. For example, we might disclose the median ages of visitors to our websites, or the numbers of visitors to our websites that come from different geographic areas. Such aggregate information will not include information of any individual visitors to our websites.
TSI Network may provide personal and other information to a purchaser or successor entity in connection with the sale of TSI Network, a subsidiary or line of business associated with TSI Network, or substantially all of the assets of TSI Network or one of its subsidiaries, affiliates or lines of business.
With Your Consent: Other than as set out above, you will receive notice when information about you might go to third parties, and you will have an opportunity to choose not to share the information.
Except as provided herein, TSI Network will not sell or rent personal information about you to unaffiliated third parties.
We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
TSI Network requires persons and companies to which it discloses personal information to restrict their use of such information to the purposes for which it has been provided by TSI Network, to adequately protect the information, and not to disclose that information to others. TSI Network cannot be responsible, however, for any damages caused by the failure of unaffiliated third parties to honour their privacy obligations to TSI Network. Similarly, TSI Network is not responsible for the privacy policies and practices of other websites that are linked to our websites.
COMMENTS: TERMS OF USE
We’re always happy to receive feedback, comments and ideas from TSI Network visitors, and we encourage you to add your perspective to any issue by leaving your comments on the site.
To make sure users get the most out of the site’s comments function, we’ve provided a few guidelines:
Do not post threatening, harassing, defamatory, or libelous material.
Do not intentionally make false or misleading statements.
Do not offer to sell or buy any product or service.
Do not post material that infringes copyright.
Do not post information that you know to be confidential or sensitive or otherwise in breach of the law.
TSI Network will not accept responsibility for information posted in the comments.
Please note that we reserve the right to delete or edit all comments. As well, we may close posts to further comments at our discretion. If a user repeatedly abuses our comment policy, we may also revoke that user’s access to our comments section.
By commenting on TSI Network, you agree that you retain all ownership rights in what you post on the site, and that you will relieve us from any and all liability that may result from those postings.
Special Note for Parents
TSI Network does not sell products for purchase by children. If you are under 18, you may use TSI Network's site only with involvement of a parent or guardian
How do we protect your personal information?
TSI Network does everything possible to prevent unauthorized intrusion to its websites and the alteration, acquisition or misuse of personal information by unauthorized persons. Notably passwords submitted by users of our websites are encrypted using encryption mechanisms. However, TSI Network cautions visitors to its websites that no network, including the Internet, is entirely secure. Accordingly, we cannot be responsible for loss, corruption or unauthorized acquisition of personal information provided to our websites, or for any damages resulting from such loss, corruption or unauthorized acquisition.
How do we maintain the integrity of your personal information?
TSI Network has procedures in place to keep your personal information accurate, complete and current for the purposes for which it is collected and used. You may review the information that you have provided to us and where appropriate you may request that it be corrected. If you wish to review your personal information please send a request to: service@tsinetwork.ca.
How do I withdraw my consent to use Personal Information? Access, Correction, Inquiries and Complaints
If you wish to request access to, or correction of, your personal information in our custody or control, or find out how we've used or disclosed that information, please make your request in writing to us. We may need to verify your identity before searching for or providing you with personal information. In some circumstances, we may not be able to provide access to your personal information, for example if it contains the personal information of other persons, if it constitutes confidential commercial information, or if it is protected by solicitor-client privilege. If we deny your request for access to, or refuse a request to correct, your personal information, we will advise you of the reasons for this refusal.
If you do not want to receive promotional offers, please notify TSI Network by sending an email to service@tsinetwork.ca.
How can you ask questions about our Privacy Policy and access your personal information?
The provision of information by you is entirely voluntary and you have the right not to provide information. Subject to applicable law, you may have the right to receive certain information as to whether or not personal information relating to you is held by TSI Network and to obtain a copy of such information that is sought. You may also have the right to require information, where appropriate, to be erased, blocked or made anonymous or to have data updated or corrected. If you do not wish TSI Network to hold information about you or if you wish to have access to information, modify information, or object to any processing of information or if you have questions please contact us.
What Choices Do I Have?
As discussed, you can always choose not to provide information even though it might be needed to make a purchase or to take advantage of TSI Network features.
You can add or update certain information as explained in the section "How Can I Change My Information?"
If you do not want to receive email or other mail from us, please notify TSI Network by sending an email to service@tsinetwork.ca.
The "Help" portion of the toolbar on most browsers will tell you how to prevent your browser from accepting new cookies, how to have the browser notify you when you receive a new cookie, or how to disable cookies altogether. However, you will not be able to use important features of TSI Network sites if you do not use cookies.
Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
Information presented on this web site or contained in our publications is not an offer, nor a solicitation, to buy or sell any securities referred to on the web site or in the publications. The material is general information intended for recipients who understand the risks associated with an investment in any securities referred to in the publications or on this web site. The Successful Investor has made no determination regarding whether an investment, course of action, or associated risks are suitable for the recipient.
