Norm Rothery is the founder of StingyInvestor.com and a contributor to the business section of Canada’s top newspaper, The Globe and Mail. He recently provided the Globe’s readers with seven different portfolios for both dividend and value stocks.
The portfolios themselves are based on stock screens that Rothery discusses in further articles he links to in the Globe article. You’d be wise to check those out.
In the meantime, I thought it would be interesting to come up with three names from these portfolios that trade on a U.S. exchange and appear in one or more of Rothery’s value and dividend portfolios.
I’ll start with the companies in his Canadian and U.S. Free Cash portfolios. That gives me 20 names to choose from. I’ll try to pick three from those 20 names, all yielding 3.0% or more, while ensuring I select at least one Canadian stock in the trio of names.
History suggests that dividend and value stocks rewards patient investors. Here are three stocks to buy in March.
Manulife Financial (MFC)
Manulife Financial (NYSE:MFC) is Canada’s largest insurance company.
MFC stock is part of Rothery’s Dividend Monster portfolio, which consists of 10 high-yield stocks with momentum, and the Canada Free Cash portfolio, which features Canadian bargains with free cash flow.
Its history dates back to 1887 when it was founded as The Manufacturers Life Insurance Company. In the company’s first year, it insured 915 people. Manulife Financial finished 2023 with 1.39 trillion Canadian dollars ($1.02 billion) in assets under management and administration.
Under CEO Roy Gori, it continues to reshape its business to generate greater shareholder value with higher profits and lower risk in its global businesses. At the end of Q4 2023, its core earnings from its highest potential businesses accounted for 60% overall, a 600 basis point increase from 2022.
Its Asian operations are a big part of its success and profitable growth. Manulife Financials core earnings from its Asian insurance and wealth/asset management businesses accounted for 37% of its total, up 100 basis points from 2022.
Its core earnings in 2023 were 5.10 billion Canadian dollars ($3.75 billion), 46% higher than a year earlier. Its core earnings increased by 20% to 3.47 Canadian dollars ($2.55) on a per-share basis. That’s due to more shares outstanding from last year.
It trades at 9.4 times these earnings, yielding a high 4.9%.
Principal Financial Group (PFG)
Principal Financial Group (NASDAQ:PFG) is a global financial services company that offers financial products and services to businesses, individuals, and institutional clients, including retirement, asset management, workplace benefits and protection solutions.
PFG stock is part of Rothery’s U.S. Free Cash portfolio, currently yielding 3.3% and has increased 16% over the past year.
The company’s diversified revenue streams provide resilience in challenging times. In 2023, higher interest rates resulted in more people moving assets to cash. Despite this, it reported full-year non-GAAP operating profits of $1.6 billion, or $6.55 a share, 6% higher than a year ago, and at the top end of its 2023 outlook.
As a result of its strong year, it returned $1.3 billion to shareholders through dividends and share repurchases, or approximately 90% of its net income. It finished the year with $695 billion in assets under management, 9% higher than in 2022. Approximately 26% of these assets are from its international business outside the U.S.
Principal Financial Group expects EPS to grow by 10.5% at the midpoint of its 2024 guidance. Based on 2024 EPS of $7.24, it trades at 11.6 times this estimate.
Canadian Imperial Bank of Commerce (CM)
Canadian Imperial Bank of Commerce (NYSE:CM) is the final name from Rothery’s portfolios. It’s part of the Frugal Dividend portfolio, a cheap and stable dividend payer, currently yielding 5.3%.
CIBC, as it’s known, is the smallest of Canada’s Big Five banks, with total assets of 975.7 billion Canadian dollars ($717.2 billion), less than half Canada’s largest, Royal Bank of Canada (NYSE:RY), with 2.0 trillion Canadian dollars ($1.47 trillion).
The bank reported solid Q1 2024 results at the end of February. Its revenue was 5% higher than a year ago and 6% higher than Q4 2023. Net income in the quarter was 1.72 billion Canadian dollars ($1.26 billion), 16.2% higher than Q4 2023 and 304.7% higher than a year ago. This increase is despite a 98% increase in its provision for credit losses to 585 million Canadian dollars ($430.0 million).
“A strong quarter overall for CIBC at first look driven by top-line strength and manageable credit costs with most of the bank’s operating segments exceeding our expectations,” Bloomberg BNN reported comments from Keefe, Bruyette & Woods analysts Mike Rizvanovic and Abhilash Shashidharan after its February announcement.
Analysts’ most significant concern is its loan exposure to the U.S. office market. Although it has a more extensive office portfolio than the other Big Five banks, the rest of its loan portfolio is very strong. Its shares are up more than 20% in 2024, nearly four times greater than Royal Bank.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.