BMO chief strategist Brian Belski reiterated his belief that the TSX will continue to hit new highs and Canadian companies are set to increase dividend payouts and buybacks.
“We recently raised our 2021 price target to 20,500 for the S&P/TSX, which represents a moderate 1.7% gain from June 30th close. Yes, the risks to this target are still balanced to the upside in our opinion. Overall, our continued bullish outlook for the TSX is driven by several key pillars of strength … Firstly, the US will likely remain the key engine of global growth on epic stimulus measures … Given the strong cross-border relationship, this will continue to be a tailwind for Canadian equities and earnings growth in the quarters … Furthermore, cautious corporations have continued to sit on cash and cash flow, and only recently have started to increase corporate actions like dividend growth, share buybacks, and M&A. As such, we believe the TSX is likely to continue to set new all-time highs in the second half of 2021.”
Mr. Belski helpfully provided a list of domestic companies with the free cash flow to increase dividends. The list is huge so I’ll note the outperform rated choices. These are Barrick Gold Corp., Alamos Gold Inc., Brookfield Business Partners LP, B2gold Corp., Boyd Group Services Inc., Canadian Apartment Properties REIT, Cascades Inc., CCL Industries Inc., Colliers International Group, CI Financial Corp., Constellation Software Inc., Element Fleet Management Inc., Empire Co Ltd., Equitable Group Inc., Franco-Nevada Corp., Granite REIT, goeasy Ltd., Intact Financial Inc., Interfor Corp., Interrent REIT, Kinross Gold Corp., Kirkland Lake Gold., Linamar Corp., Lundin Mining Corp., Metro Inc., Pan American Silver Corp., SSR Mining inc., Tricon residential inc., Tourmaline Oil Corp., Thomson Reuters Corp., Whitecap Resources Inc., West Fraser Timber Co. Ltd., WPT Industrial REIT, Wheaton Precious Metals Corp., Sleep Country Canada Holdings Inc.