A Canadian Dividend Star Set for Strong Returns

It’s hard to know what’s actually “set” for strong returns over the near term or even the medium term.

However, over the long term, I do think that those looking for superior risk-adjusted results may wish to look at names that skew on the undervalued side, with underestimated catalysts that could kick in at some point down the line, whether in the new year or within the next three to five years.

At the end of the day, it’s structural, long-lived tailwinds and strong fundamentals that prevail.

And, of course, none of that matters if you’re not getting into a stock at a valuation that makes sense.

While you don’t need a steal of a deal, I do think that getting any sort of discount on a firm that’s well-positioned over the long run can be a winning strategy.

As always, though, a long horizon and careful analysis of the earnings road ahead (it helps if a firm actually has a predictable earnings growth profile), as well as the state of the balance sheet (that’s extra important, in my view, as interest rates begin to move higher from here).

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