These energy stocks could raise their dividends, says TD analyst
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TD Cowen analyst Aaron Bilkoski believes that ARC Resources, CVE, and IMO in the energy sector have the potential to increase their dividends. Bilkoski expects ARC Resources to modestly increase its dividend with Q1 results by approximately the amount of shares repurchased last year. He also believes that CVE and IMO could hike their base dividends, similar to Q1/2023. Bilkoski also mentions that due to the dry winter, two environmental issues related to water availability for fracking and wildfires impacting activity are likely to be addressed with more clarity. There are currently 12 wildfires burning in Alberta. CIBC analyst Dean Wilkinson highlights the strong operating fundamentals of the real estate sector, particularly in multi-family residential and grocery-anchored retail. He also mentions concerns about the potential devaluation of the Canadian dollar relative to the U.S. dollar if Canada were to begin an interest rate cutting cycle while the U.S. economy remained robust. Wilkinson provides "outperformer" ratings on several REITs including BSR REIT, Chartwell Retirement Residences, Minto Apartment REIT, European Residential REIT, Smartcentres REIT, Killam Apartment REIT, Morguard North American Residential REIT, Dream Residential REIT, RioCan REIT, Brookfield Corp., and First Capital REIT. BofA Securities investment strategist Michael Hartnett mentions in his report that Canada is increasing capital gains tax rates from 50% to 67%. He also discusses the potential impact of higher inflation, higher yields, and higher taxation due to the promises and funding obligations of highly indebted Western governments. Hartnett notes that the simultaneous strength in tech stocks, commodities, and the U.S. dollar is a rare occurrence that has only happened in five of the past 60 years. Cybersecurity is highlighted as a top performer within the technology sector, with analyst Hamza Fodderwala recommending PANW and CRWD as preferred stocks. Fodderwala also sees opportunities in SMID-cap stocks, particularly RPD, due to high valuation discounts and the potential for M&A activity.