Protected Principal Retirement Strategy: 'O Canada'

by: Akaralph

I have spent the past few days researching Canadian stocks for potential inclusion in the Protected Principal Retirement Strategy portfolio. When looking at foreign stocks, I generally utilize the Global Equity Screener on the Financial Times website (here). This affords the opportunity to select a region, sectors and industry groups, and equity attributes (I focus primarily on dividend yield and consensus forecasts).

Once the criteria are entered one is presented with a listing of stocks for further evaluation. After I select countries, I generally enter (after clicking on "enter specific values") a minimum dividend of 8 percent and, under consensus forecasts I click on both "buy" and "outperform." This limits the number of stocks appearing on the screen.

Clicking on "View Matches" enables a widescreen view of those stocks meeting the criteria. I always click "U.S. Dollars" Opening the Widescreen View that enables one to read a summary on each stock. In order to see if the stock has as U.S. symbol, you type the stock name into the search box at the top of the page.

Once you enter the symbol you will be presented with a page depicting the stock's chart, a financial summary, and a comparative analysis of its performance. There are six tabs above the stock chart: Summary, News & Comment, Business Profile, Directors & Dealings, Financials and Forecasts. A word of caution here, the data presented are not always the most current - so pay attention to the dates.

So much for the screener tutorial - let's look at what our neighbor to the north has to offer. Each of the following stocks are small caps, have a decent yield, and are worthy of digging into at more depth.

Capstone Infrastructure Corporation (OTCPK:MCQPF)

For those of you unfamiliar with the new name, think "Macquarie" as in Macquarie Power & Infrastructure Fund (the name was changed to Capstone in 2011).

Capstone invests in alternative energy - particularly hydropower, wind, solar and biomass.

The price/sales ratio is 0.91 (below 1.0 is great), and the price/book ratio is 0.97 (again, below 1.0 is great). For the quarter ending September 2012, revenue increased by 110 percent. Earnings were $.06 versus -$.19 (quarter over quarter).

MCQPF is paying a quarterly dividend of $.075 for a yield of 6.8 percent. Analyst price estimates for the coming 12 months vary from an average increase of 8.1 percent to 13.8 percent.


Canexus is a limited partnership focused on chemicals applicable to the pulp and paper and water treatment industries (sodium chlorate and chlor-alkali). CXUSF changed over from income trust to a corporation in July 2011.

CXUSF's price increased over 31 percent in 2012, and the company anticipates an even better 2013.

In its recent guidance it anticipates 2013 profits in the range of $155 - $165 million (compared with $135 - $140 million in 2012), distributable cash flow between $100 and $110 million and a payout ratio in the range of 65 percent - 75 percent.

The quarterly distribution payment is currently $.1368 ($.5472 annually), for a yield of 6.1 percent.

Judging by the guidance issued, there is probably room for a distribution increase in 2013.

Mart Resources (OTCPK:MAUXF)

Mart Resources is an oil and gas exploration company with an on-shore focus in Nigeria, more specifically in the Niger River Delta.

The stock price has increased by 91 percent over the past year, and by almost 300 percent in the past five years. Analysts anticipate the stock price to appreciate on average by 42 percent in the coming 12 months. The high estimate is for an increase of 57 percent.

The return on equity is 69 percent and for the last quarter revenue increased by 13 percent and earnings by 15 percent ($.06 vs. $.055).

MAUXF pays a little more than a $.05 quarterly dividend for an annual yield of 11.56 percent.

CanWel Building Materials (OTC:CWXZF)

I believe that CanWel is a potential economic recovery play. It primarily provides hardware and lumber for new construction and renovations.

While the stock has increased only 3.9 percent over the past year, it has gone up 14 percent over the past six months. Earnings have increased by 90 percent over this period.

The current price/sales ratio is 0.21 and the price/book is only 1.25. Earnings for the quarter ending September 2012 were $.07 versus $.04 quarter over quarter.

CWXZF currently pays a dividend of $.071 per quarter, for a yield of 11.1 percent.

Chorus Aviation (OTC:CHRVF)

CHRVF is the holding company for Jazz Aviation, which is a regional airline feeder for Air Canada.

I am NOT into airline stocks at all, but Chorus caught my attention as it is actually quite profitable. In fact, the stock price increased over 35 percent in the past year alone.

CHRVF has an 80 percent return on equity for the trailing twelve months, and for the quarter ending September 2012, revenue increased by 6 percent and earnings increased by 167 percent ($.27 versus $.11). Perhaps the U.S. airlines should take a lesson here!

Chorus' dividend is currently $.15 per quarter, for an annual yield of 14.1 percent. The high analyst price estimate for the coming 12 months is for an increase of 17 percent, which, if true would afford a neat total return of 31 percent.


The above are just five potential portfolio candidates. My intention is to delve deeper in the coming days, paying particular attention to quarterly earnings reports, which should be forthcoming in the next month.

I still am holding to my opinion that we are due for a market correction (or worse) in the coming few months, so I am perfectly content in a "wait and see" attitude.

I hope you all are too!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: None of the stocks mentioned in this article are recommended for purchase. They are discussed solely for their potential inclusion in the Protected Principal Retirement Strategy portfolio only.