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David Burrows, President, Barometer Capital Management
FOCUS: North American Large Caps
Market Outlook:
The Barometer investment team continues to believe that investors are most likely to continue to move cash and short term deposits to equities in search of predictable and growing dividend streams. This theme favours investing in companies and industries with a unique ability to pay in good and bad economic environments. This means stable well financed corporations are likely to trade at higher valuations than economically cyclical companies and industries as we move forward.
Top Picks:
Telus (T TSX) Last purchased Feb 1 at $67.15
While offering investors an investment in continued growth in mobile data and internet TV, Telus continues to understand investor demand for a clear well defined dividend policy. Telus announced an 11 percent dividend increase and suggested investors could expect continued semi-annual dividend increases until at least 2016. They also plan to buy back as many as 15 million shares. This places Telus at the epicenter of the list of companies prepared to return capital to shareholders.
Johnson & Johnson (JNJ NYSE) Last purchased March 21 at $79.08
With extremely stable cash-flows, a very liquid balance sheet, a dividend payout of less than 50 percent of earnings and a 5 year dividend growth rate in excess of 8 percent, JNJ is likely to be revalued by investors looking for alternative investments to fixed income
Home Depot (HD NYSE) Last purchased March 11 at $71.29
As the housing market continues its slow recovery in the U.S., Home Depot has been able to grow market share and benefit from pent up demand from both its consumer DIY and trade customer base. Very strong cash generation should fuel additional share repurchases and dividend growth in excess of 5 percent per year.
| Disclosure: | Personal | Family | Portfolio/Fund |
| T | N | N | Y |
| JNJ | N | N | Y |
| HD | N | N | Y |
Past Investing Ideas: May 17, 2012
Mondelez International (MDLZ NASDAQ) Spun out Kraft Foods (KRFT NASDAQ) - 09/17/2012
| Then: $38.35 | Now: $30.66 | +21.95% | TR: +24.96% |
Abbott Labs (ABT NYSE) Spun out AbbVie (ABBV NASDAQ) - 12/10/2012
| Then: $62.23 | Now: $36.15 | +21.41% | TR: +24.24% |
Cash
Total Return Average: +16.4%
| Disclosure: | Personal | Family | Portfolio/Fund |
| MDLZ | N | N | N |
| ABT | N | N | N |
| CASH | N/A | N/A | N/A |
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