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CERB Is Shutting Down: How to Keep Your Monthly Payments

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In June, Justin Trudeau and the federal government decided to extend the Canada Emergency Response Benefit (CERB) for an additional eight weeks. Late last month, I’d discussed how investors could determine their eligibility for this increase. The extension came with something of an ultimatum from the federal government. Applicants were compelled to sign a document that said they were committed to finding employment.

The federal government has now made it official that the CERB will come to an end this fall. Earlier this week, I’d discussed how recipients should prepare for this inevitability. Today, I want to explore how CERB recipients can keep their monthly income payments through other avenues.

CERB aftermath: Prepare for the next stage of Employment Insurance (EI)

Some analysts have warned of how shutting down the CERB could negatively impact the millions of Canadians who have depended on it through this crisis. The federal government has vowed to update Canada’s Employment Insurance (EI) system to a modern-day model. However, the details on this system have been sparse.

The Workers Action Centre, which advocates for low-wage workers and those in precarious employment, said recently that many who make this transition will get between $600 and $1,000 a month if they are pushed into EI. This would be substantially less than the $500/week taxable income they received under the CERB program.

Recipients will be waiting anxiously for the updated federal government program. The economic reopening is a good first step, but many Canadians are still in a dire financial and employment situation. CERB recipients who are worried about the future may want to consider another way.

Construct a passive-income alternative

In investing terms, passive income is earnings that are derived from an asset. This can come in the form of rental income, limited partnership, or through a stock holding. CERB recipients with cash on hand should look to registered vehicles like the Tax-Free Savings Account (TFSA). A few thousand dollars can start investors on the path to constructing a passive-income empire. Even better, in a TFSA that income will not be taxable.

Bird Construction is one stock that CERB recipients should target in their TFSA. The company operates as a general contractor in Canada. Its shares have surged 36% over the past three months as of close on August 6. The stock last paid out a monthly distribution of $0.0325 per share. This represents a strong 5.7% yield. Moreover, its shares last had a favourable price-to-earnings ratio of 17. Meanwhile, the economic reopening will lead to more activity in construction. CERB recipients should consider stashing this dividend beast in their TFSA today to start their new passive-income journey.

Why the CERB may not be gone forever

Many Canadians have shown that they are not opposed to the idea of a guaranteed income. Indeed, Justin Trudeau’s Liberals won a majority in 2015 with a guaranteed income pilot project on the table. The CERB may be extinct by the end of 2020, but its legacy may usher in a permanent guaranteed income.

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Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned.

The post CERB Is Shutting Down: How to Keep Your Monthly Payments appeared first on The Motley Fool Canada.



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3 Undervalued Dividend Stocks to Buy for Long-Term Gains

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Stock prices have been unpredictable in 2020 due to COVID-19. While the broader markets have staged a comeback after entering bear market territory earlier this year, several stocks across sectors still trade at a discount. We’ll look at three large-cap Canadian stocks that trade at cheap multiples, making them attractive to value investors.

An undervalued energy giant

When it comes to investing in dividend stocks, it is difficult to ignore Enbridge (TSX:ENB)(NYSE:ENB). The sell-off in the energy space has driven Enbridge stock to $40.2, indicating a forward yield of 8.1%.

The Canadian infrastructure giant has lost over 20% in 2020. However, despite volatile crude oil prices and tepid demand, Enbridge is on track to achieve its full-year forecasts. Enbridge has a resilient contract-based business model, making it immune to commodity prices.

Despite a high yield, the company’s payout ratio is less than 70%, giving it enough room to increase dividends once the market stabilizes. Enbridge currently has allocated $11 billion for expansion projects that include new oil and gas pipelines.

The company expects the expansions to increase cash flows at an annual rate of between 5% and 7% through 2022. The company has increased its dividends at an annual rate of 11% since 1995, making it one of the top income stocks on the TSX.

A banking behemoth

Shares of Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) are trading at $55.15, which is 28% below its 52-week high. The high unemployment rates in Canada amid the pandemic have made investors wary, as there is a risk of rising defaults.

In order to boost spending, the federal banks have lowered interest rates, which will also impact the bottom lines of banking companies. However, the sell-off provides an opportunity for Canadians to buy a blue-chip company at an attractive multiple.

BNS stock is trading at a forward price-to-earnings multiple of 3.3 and a price-to-book multiple of 1.06. The banking Goliath also has a tasty yield of 6.5% and given its payout ratio of 70%, a dividend cut is unlikely.

In the last 20 years, BNS has increased dividends at an annual rate of 8%.

A utility heavyweight

The third stock on the list is Canadian Utilities (TSX:CU). Shares of this utility company are trading at $31.7, which is 26% below its 52-week high. This indicates a forward yield of 5.5%. Utility companies are some of the safest bets during an economic slowdown, and holding domestic heavyweights such as CU will recession-proof your portfolio.

Canadian Utilities has increased its dividends for 48 consecutive years due to its strong balance sheet and a steady stream of cash flows. The company has over $20 billion in assets, and its rate-regulated business ensures cash flows will remain constant and predictable.

Canadian Utilities generates 95% of sales from its regulated business and the rest from long-term contracts. CU has survived multiple slowdowns and is trading at a price-to-book multiple of 1.7.

The Foolish takeaway

The three companies discussed here have been around for several decades. They have a huge market presence and the potential to create massive long-term wealth. If you invest $10,000 in each of these three stocks, you can generate over $2,000 in annual dividend payments.

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The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends BANK OF NOVA SCOTIA. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

The post 3 Undervalued Dividend Stocks to Buy for Long-Term Gains appeared first on The Motley Fool Canada.



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Tyson Foods: A Quick Discussion

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Just last week, Germany had a swine fever affect almost its entire hog population causing Tyson Foods to spike 5 percent. https://www.theguardian.com/environment/2020/sep/10/german-farmers-face-possible-pig-culls-as-african-swine-fever-discovered

About 16 months ago, China´s hog population was decimated from another swine fever.

It is going to take China 3 to 4 years to get their hog herd just back to where they were. https://www.reuters.com/article/us-china-meat-consumption/chinas-pork-consumption-falls-as-african-swine-fever-spreads-idUSKCN1SN0HG

Additionally, Each person in China eats 74 pounds of pork a year. It is very Hard to change a habit like that.

The US farming industry gets a lot of flack but the USDA and regulations we have here are superior to countries around the world. Tyson has had issues with workers getting sick, but for the last two quarters they have spent hundreds of millions putting in equipment such as thermal body scanners, air purifiers, and more extensive personal protection equipment that will be permanent investments that will help the health of their factories into the future.

About 12 months ago, Tyson has started actually making plant-based meat products, and hybrid protein products that are appealing to consumers who want to eat less meat. https://www.cnbc.com/2019/06/13/tyson-foods-unveils-plant-based-nuggets-in-move-into-meat-alternatives.html

Yes Beyond Meat and Impossible Foods are growing every year but the numbers are just not there. Tyson´s Revenue 2018 — 40.1 Billion. Tyson´s Revenue 2019 — 42.4 Billion. Beyond Meat 2018 Revenue — 31.5 Million. Beyond Meat 2019 Revenue — 98.5 Million. Beyond Meat projected 2020 Revenue — 440 Million. I really hope Beyond Meat succeeds and it is awesome this company is creating lasting revolutionary jobs, but I think we are simply comparing apples to oranges.

Tyson Foods is a BEHEMOTH and it is time to start saying how can they improve as a company rather than just telling people to stop eating meat! Tyson even produces all of the chicken and most of the beef products that supplies McDonald´s corporation! McDonald´s employs 2 Million people and has an annual revenue of 22 Billion dollars!

Maybe farmers can start giving their cattle a different diet(Wendy´s looked into this and proved that emissions from cows can be cut drastically just on the type of feed the cattle are given). Maybe Tyson can start to build smaller and more spread out slaughtering houses so that several thousand people do not have to come together and work at one location. Maybe we should stop condemning this company that employs 145,000 extremely hard-working Americans.

Because Brazil, with their enormous animal agriculture, is simply going to fill the vacuum if companies like Tyson shrink. Before you start thinking of Tyson as the enemy, just keep in mind that Brazil actively burnt down their rainforest last year in order to clear land to have more ranches and to further expand the amount of heads of cattle they can produce. Remember that hashtag that trended on Twitter #savetherainforest for about 2 weeks and then we all forgot about it and went back to browsing the internet. https://www.washingtonpost.com/world/the_americas/why-brazilian-farmers-are-burning-the-rainforest–and-why-its-difficult-for-bolsonaro-to-stop-them/2019/09/05/3be5fb92-ca72-11e9-9615-8f1a32962e04_story.html

More than 30,000 fires burned in the rainforest in August alone, a nine-year high, according to the space research institute.

The fires have prompted activists to call for boycotts of Brazilian goods. Fifteen fashion labels, including Vans, Kipling and Timberland, have said they will not import Brazilian leather. Finland has called for a ban on Brazilian beef imports to the European Union.

One last final thought – Yes, raising beef and chicken is very water intensive, but so is many other industries and crops. It requires 600 gallons of water to produce one pound of cheese.

https://water.usgs.gov/edu/activity-watercontent.php

One pound of potatoes requires 450 gallons of water to reap. Just one cup of coffee has a carbon footprint of 35 gallons of water! One pound of wheat flour has a carbon footprint of 200 gallons of water!

Let´s looks for solutions and ways to improve and understand the global and complex nature of feeding 8 Billion humans. Thoughts?

submitted by /u/chickenandcheesefart
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Which Way Wednesday – Fed Edition

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And once again the Futures are up.  

As you can see from the S&P chart, we have had some massive gaps up in the thinly traded open and then drifted down during real trading at the end of the day.  This is like someone who works for the auction house shouting "100 Million Dollars" on the first bid for a painting to make sure the other suckers in the audience start bidding higher.

In the case of the markets, the Banksters buy up the Futures on thin trading (so it's very cheap to do) and cause the Retail Suckers to pour in and chase the momentum so the Banksters can dump their stocks all day long during real volume trading.  This is how rich people exit the market – they create a buying atmosphere and they take their profits while poor people follow their advice – which doesn't actually apply to their own actions.  You see the big brokerage houses doing that all the time, exiting positions while their analysts are pumping the Tesla stock.

We had a good day yesterday shorting the Dow (/YM) Futures from our trade idea in the Morning Report and congratulations to all who played along.  Our morning call for our Members was:

So we're sticking with our strategy of shorting the indexes (which didn't work yesterday) as we're likely to be rejected here (Dow (/YM) 28,100, S&P (/ES) 3,405, Nasdaq (/NQ) 11,475 and Russell (/RTY) 1,550) and, as usual, we can just short the laggards, which would be /ES crossing below 3,400 and /YM confirming below 28,000 – we should catch a quick ride down but the Fed goes tomorrow and that should give the marketsupport until they are disappointed by that so tight stops above!

As you can see, this wasn't rocket science, the pivot points on the Dow were 28,014 and 27,795 and we simply allowed for the pre-market BS pump job and took a stab at shorting early but once we confirmed the move below 28,000, it was a no-brained to jump in for the 200-point drop on the Dow (at $5 per point, per contract!).  This morning we're back to 28,000 again but we have a Fed Meeting at 2pm so it's not a good day to play the futures – too volatile.

Speaking of volatile, 

 

 

 

   

 

 

 

IN PROGRESS

 

 

 



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