The Canadian Investor - Episode 3 - Great companies that are overvalued

Episode Date: December 15, 2019

In this episode, we each selected 3 companies that we love but that we think are currently overvalued. Tickers of companies discussed : BIP-UN.TO, PLC.TO, V, CSU.TO, WCN.TO, WSP.TO--- Send in a voice message: https://anchor.fm/the-canadian-investor/messageSee omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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Brayden, you have a few words for our listeners. What's going on everyone? It's Brayden, do you have a few words for our listeners? What's going on, everyone? It's Brayden here, recording from Toronto. What's the weather like up in Ottawa right now? Because it's actually pretty warm out, although there's a ton of snow. Yeah, it's actually turned this morning, so it was about zero degrees this morning, and now it's about minus 12, so it actually got colder throughout the day which I guess is uh just the fun of living in Ottawa yeah I'm a baby with that stuff like Ottawa is so cold

yeah I mean if you're bundled up correctly I mean it's all it's all good and plus I always tell people you get to enjoy the summer and spring a bit more when it's really cold in the winter that's true all right so Simon tell them what we're going to do this episode because I think this is really exciting and what people want to actually hear. Yeah, so we had the idea for this episode to discuss three companies each. So the three companies are companies that we really like, but that given the current market pretty much at all-time highs, we find them a bit overvalued. pretty much at all-time highs. We find them a bit overvalued. So we'll talk to you about the companies themselves,

what we like about them, but also why we find them overvalued. And then we'll each other ask a bit of questions on it for our respective picks. Yeah, perfect. I can go first if you want. Yeah, go ahead, Brayden. All right. So yeah, so to clarify that, I love these companies, but I think they're expensive. I can go first if you want. Yeah, go ahead, Braden. All right. So, yeah.

So to clarify that, I love these companies, but I think they're expensive. So I'm waiting on the sidelines. If a market pullback was to happen, these would be companies that are on my watch list and I love but can't convince myself that they are trading at a good price. So that's the essence of this. So my first pick is Constellation Software. And they're in the bucket of software acquirers that have had a really good growth story here in Canada. To name a few similar to this would be OpenText Corporation and EngHouse Systems. These are SaaS models, which is software as a service with recurring revenue.

And they continue to buy companies, integrate them in the system, boost cash flow, and rinse and repeat. So Constellation has been an unbelievable performer, definitely one of the best on the TSX. And the reason that I think they're overpriced is for one, they're trading at 52 times earnings, which is very, very expensive. 63 times return on equity right now

and 27% return on invested capital. It's just unbelievably good. So they're boosting cash flow at an unprecedented rate in 2014 they had 383 million and then trilling 12 months almost 700 million in free cash flow so unbelievable growth and very stable model so SAS is pretty sticky when you're going from business to business software as a service. It is very expensive and hard for IT departments to switch over services. And additionally, once you acquire the software and you have something that works in that vertical

as well, you can begin to tack on upsells on enterprise management software. I like EngHouse and OpenTex a little bit more because I think they're undervalued and also producing tons of dividend growth and cash flow growth. This one's a beast but at 52 times earnings and almost 7 times sales, I'm having a hard time justifying that. Yeah, that's a really good overview. In terms of starting a position in there, well, first of all, I think there's one little thing that people might find a bit difficult is the one share of Constellation software

is not cheap, right? Yeah, it trades for, as of today, $1,364.47 is one share. It's obviously probably one of the more expensive share prices on the TSX. That's because they don't want to split it for whatever reason. Stock splits mean absolutely nothing. It's just a behavioral finance tactic. It's never a way to value a stock. I always find that beginner investors, they look at the price of the share and think that

has any correspondence with how expensive it is. Not the case. But yeah, the share price is a lot. So what price to earning or price to cash flow is kind of the threshold for you to like where you start being pretty interested in starting a position now? It definitely warrants a premium. Software is expensive, especially SaaS. And the market loves it. I think it's kind of gotten that rep from venture capital. They cannot wait to throw money at these kinds of businesses.

That's stemmed into the stock market. That's just my speculation on how that's happening. I would think anywhere around 30 times earnings, this kind of free cash flow growth would be fair. Yeah, that sounds pretty good. Based on what you just said, and you definitely know it better than I do.

You want to go with one of yours? Yeah, so I'll do one of mine. The first one I'll do, might as well start with one that probably everyone knows. So the company is Visa. So I don't think I'll need to do a lot of explaining for Visa because I'm sure everyone is well versed on like what they are so obviously it's a payment processing company a lot of people might think that when they have a credit card it's with Visa it's not they actually get a small percentage of the transaction usually the card will be with the actual bank itself and then Visa has the processing platform. So they get a very small piece but they get a small piece of a lot of transactions and because of that

they've been really a crazy growth story. If you're looking at the income statement for Visa you can see that starting 2015 they went from a bit less than $14 billion in revenue. And then 2019, you're looking at $22 billion or pushing $23 billion in revenue. And that has increased over the years. I think I had the compound annual growth rate in terms of their earnings. So the compound annual growth rate for Visa is 13.75% just for the earnings for the past five years. So they've increased their earnings a lot. The balance sheet is very nice as well. They've added a bit of debt in the past years, but they're covering interest very well.

So that's not an issue there for their cash flow i mean there's they're literally printing money if you look at their income statement it's pretty crazy like the numbers are really mind-boggling so they did 12 billion in free cash flow for the latest fiscal year. And that was fairly stable from the previous year, but then before that it was $8.5 billion. So you can really see an increase. In terms of dividend pays, their yield is pretty low. It's, I think, with 0.66% right now. So they do pay a dividend. They are growing it quickly. The dividend has grown at an annual rate of 23% for the past five years, but you're starting at a small base as well. So you have to keep that in mind. And the payout ratio is very low. It's just a bit below 20%.

So there's a lot of things to like. One other big thing that people that are looking at Visa, especially the statement of cash flow with them, is pretty interesting. If you're looking at the cash flow using financing, you'll notice there's a line of common stock repurchases. So those are share buybacks. So they've actually decreased their share count by about 10% in the past five years. And most recently, they use $8.6 billion in share repurchases. I'm kind of a bit lukewarm on that sometimes just because it's fine if it's done properly. I know Warren Buffett does like the share repurchases, but he does them pretty well with Berkshire. Berkshire had a way where he has a certain price to book that he'll buy back shares. I think companies sometimes will buy back shares when they're a bit overvalued. So that's always a bit of a risk. I tend to prefer dividends a little more over that. But that's in a nutshell what I would be looking for in terms of Visa. In terms of

valuation right now, they are not cheap. They're trading at a price earning of close to $34 and price to cash flow close to $32. And that is above their averages in the past 5 and 10 years. Brayden, do you have a few questions or a few comments for me? five and 10 years. Braden, do you have a few questions or a few comments for me? As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you

have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Calling all DIY do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building and people share their portfolios, their trades, their investment ideas in real time.

And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning Duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment

ideas and using the analytics tools. So go ahead, Blossom Social in the App Store, and I'll see you there. Yeah, I love this company. This company is just, I can't think of a better business model, to be honest. And just looking at their numbers here, 20% return on invested capital, over 40% return on equity, low payout ratio,

growing the dividend at an unprecedented rate, insane margins. They touch every part of the transaction um and if you go i love to travel and i'm noticing that visa and mastercard are really really performing well in uh in these new emerging businesses or sorry new emerging markets and yeah i mean this company just ticks every single box. If I owned, if I managed a US equity fund, I would probably just own Visa and tell everyone to go home. Like it's unbelievable.

They've beat earnings expectations for three years in a row and have, they did 56 cents per share in earnings in 08 and fiscal year 19, $5.44. So it's a 10x in 10 years. I think even though at 35 times earnings, this is going to look cheap in five years. Yeah, I totally agree with you. I think this is one of the businesses where I think at some point I might just be like, okay, I'll buy the bullet and just start a small position and dollar cost average in them.

I mean, there are the potential risk, I guess, some people might bring up cryptocurrency. I mean, I think that's still in its infancy. There would have to be big changes in our monetary system for Visa to not be the company that it is today. But it's definitely a company I have on my radar and will probably reluctantly start a position, even if it's a bit overpriced in my view. Yeah, I know. This is just a great company. I have no criticism on this one. Even at 35 times earnings, I think I'd be ponying up on it.

Okay, perfect. So we'll do your next one, Brayden. So which one are you going for? I'm going with Waste Connections, Inc. And this is obviously the large garbage acquirer. So they own tons of transfer stations and garbage collection services. And they have been a really good growth story in the U.S. I think because of the safety and the growth and people thinking, you know, garbage is a very sustainable business moving forward, which I agree with.

It's demanding a very high premium of 42 times earnings. And it's been a very good dividend growth stock. They're paying out 29%. The yield is not that high, but that's because their share price has increased quite a bit. To give you some numbers here, they did $338 million in free cash flow in 2015, 2014 sorry in 2015 and then trailing 12 months 921 million and that is that is really nice so these are the kinds of numbers you're looking at I think it's really expensive I think it's really safe and their earnings chart like if you graph it out it's just consistent and let's look at revenue they did 1.2 billion in revenue in 2015 and then sorry 1.9 billion in

2015 and almost 5 billion in 2018 so yeah I mean that's that's really good growth it is act it is an acquisition, so that's something to be cautious of. But if you want a dividend growth stock, this is definitely one. But I think it's really expensive. That's it for me on this one. Yeah, I definitely like the company as well. I think it's a bit expensive too. One thing I noticed, I know we had talked about it a little

bit, is they do have a lot of goodwill on the balance sheet, but that's fairly typical for serial acquirers. So for those of you not sure what goodwill is, usually it would be the premium that you pay for a business in terms of what the value or the book value of the business is. So the premium you would pay on top of that so their goodwill is probably about 40 percent of their total assets so that is something to keep in mind but they do have very predictable cash flow and it's a business obviously as population grows I don't see that it's going to go away anytime soon no absolutely I mean mean, garbage is probably next to what is for sure in life with death and taxes. So this is very, very safe. I think the reason that it being so safe and coming late to recycle is demanding a premium.

I bet you a lot of managers are dumping tons of cash in this. So, yeah, that's it for me. Do you want to fire off your next one? this so yeah that's it for me do you want to fire off your next one yeah yeah so I kind of use your death as a segue so we'll go to Parkland corporation so Parkland corporation this one is probably not a lot of people listening would know this company so Parkland corporation they essentially own funeral homes and cremation they do cremation. So I know it is a bit morbid, obviously, in the business of death. But if there's something that's recession-proof, it's definitely death. People do die, whether it's good economic times or not. So it is something that I do like

in terms of the business, where it's not death specifically, but I do like in terms of the business where it's not not that specifically but I do like in terms of the business where they do have they'll be recession proof and pretty predictable cash flow and because they do own funeral homes and cremation services they kind of capture both parts of the markets there and I believe I'd have to double check I'm pretty sure they also own some cemeteries. So for them it's also been a grow by acquisition. So if we look at their income statement you can really see that pretty easily. So in the past year they've really they've really grown in terms of revenue. I think in 2014 they went from 23 million in terms of revenue, and then they're $161 million in 2018, so the fiscal year that ended there. I don't have the trailing 12 months. I'm assuming it's probably a little higher than that. Aside from that, what I was looking at is the net income has kind of been up and down.

The main reason for that is especially the most recent year there was a lot of non cash items non cash items would usually be things that don't affect your cash flow so yeah they're re-added in the statement of cash flow they do have a big chunk of depreciation and amortization as well that's re-added in the cash flow and one other thing I would look at the for Parkland Corporation on their income statement again is that you'll notice that the share account has quadrupled since 2014 so they went from I don't have the decimal but it has quadrupled since 2014 compared to now so basically what they've been doing is

for those acquisitions, they've been issuing shares and issuing debt. So debt has also increased, but it is reasonable levels in terms of their total assets if we look at the balance sheet. So it is reasonable, the interest coverage, so in terms of the money they generate versus the interest is very the interest payments that they pay is very reasonable and then if you look at the cash flow statement that's what I mentioned so and you'll see that the cash flow has been a bit negative especially free cash flow has been negative for 2014 to 2016 but then we see a good increase in 2017 the positive and even more so in 2018 so those

acquisition and that kind of stable cash flow is really paying off and the dividend the payout ratio for the dividend compared to the free cash flow is about 50% which is really good. One of the drawbacks with them is that they have, I don't think they've ever increased their dividends. It's been just stable, so it's not a dividend growth story, but it is still something that is a company that I like because if there's a recession, especially it's a defensive stock, it's non-discretionary because people, you know, they'll have to get their services, whether it's good economic times or not. In terms of valuations, if we look at currently their 90 times earnings, but I think that's a bit deceiving because like I just mentioned, they have some one cash items which are lowering their net income.

The price to cash flow is a bit more reasonable. It's around 15 times. It's still a bit expensive, but I think it is overvalued, but probably not as overvalued as it may look at first glance. Brayden, do you have any comments on this? Yeah, I think this is a good growth by acquisition story. Revenue went from $23 billion to $209 billion in trailing 12 months. So that's a lot. I don't know the business that well, so I'm assuming that they're just looking for distressed assets

in the funeral business, trying to buy them at nice prices and then boost it into the system. I'm just trying to figure out what synergies they have. I always look for what synergies are possible when you have an acquisition story like this. So yeah. And sorry, I meant $209 million, not $209 billion.

That would be undervalued big time. Yeah, no, I meant that. So I'm just wondering what synergies they have in that business. Because it is an acquisition story and you want to rinse and repeat to boost cash flow, what synergies do they have with one funeral home to the next? And I'm sure there's heaps, but I don't know the business that well to comment on that.

But if you know, I'm curious. I still need to do some homework. So it's more of that first glance for a party lawn corporation. I definitely want to listen to a few conference calls probably the past three, four years just to get a sense of what management is saying, if they're actually holding their promises. I know I'm kind of a nerd that way. I do like to listen to those conference calls and just kind of get a good sense of if management in, like, say, four years ago, they promised something and did they deliver on it and so on

because management will oftentimes promise things and not deliver on it. One thing I'll keep an eye on that you just mentioned is cell SG&A so cell general and administration so that's a good indicator especially when there's a lot of mergers you want to see that SG&A number actually go down in terms of percentage, in terms of synergy. So that's usually a good indicator. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense, and with them, you can buy all North American ETFs, not just a few select ones, all commission-free,

so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. dot com for details. That is questtrade.com. Calling all DIY do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement

is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends. And there's other stuff like learning Duolingo-style education lessons that are completely free. You can search up Blossom Social in the App Store and join the community today. I'm on there. I encourage you, go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might

know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. Yeah, you bring up a good point. So in 2015, there was 10 million in SGA compared to 23 million revenue and trailing 12 months it's about half 200 it's 119 over the 209 so I'm not seeing the synergy right now so yeah I guess one just requires some more homework for me yeah and usually when they they've done like they've pretty much doubled their revenue too so they've probably I think they've made some major acquisitions so those can't take a few years i think it's just a number to keep an eye on yeah absolutely and to be i mismatched for like the last three years i mixed up this stock with parkland fuel corp for like forever

i thought they were the same company for so long until like maybe a year ago. Okay, okay. Which also has been a big growth story, Parkland Fuel. Anyways, do you want me to kick off on the next one here? Yeah, yeah, go ahead. All right, so my next pick is the engineering giant WSP Global. And they are an engineering firm that focuses on infrastructure, environmental, and their services company. So this company has been an amazing story. I bought the stock in 2019

of the pullback last year in 2018. Sorry. Yeah. December of 2018. Sorry. And I'm up 50% on it. And it's 9 billion in market cap, so very large. They're growing free cash flow at an insane rate. I'll give you some numbers here. So 2015, they did 99 million in free cash flow, trillion total of months, 604 million. So that's huge growth. And I really like the company and the fact that they're in on all these infrastructure projects, but they provide services only. And I think they're trading at a massive multiple right now because a lot of

fund managers are dumping cash into them as opposed to snc lavalin so snc lavalin one of their competitors obviously there was a big scandal here in canada uh they cut the dividend the coal company was looking like it might fall apart and no one wanted to touch it with a 10 foot pole so a lot of people dumped money into stantec and andSP, which are their big competitors in engineering firms. I think this company has a really, really strong position around the world, and they're in growing sectors as well, environmental engineering being one of them. Let me see here. Earnings-wise, my page is loading.

Now it's frozen. Oh, okay. No, we're good. We're good no we're good we're good you're good okay we're good okay so he reported 98 cents a share earnings in fiscal year 14 and almost three dollars in 2018 so the growth is there it is a growth by acquisition story as well. They're purchasing engineering firms all over the world. They just bought a 500-person engineering firm in Europe last week, and they continue to do this. So I think it's a great model. I think engineering is a good place to be. I think it's expensive, and that is my synopsis.

Yeah, no, I think, I mean, I had heard of it, I'll be honest. It wasn't a company I was super familiar with. Do you think the whole SNC-Lavalin story will continue being a tailwind for them? I think that it's an overpriced tailwind, and that's why I'm kind of sitting on the sidelines. I think SNC is going to be fine um i think it's an overpriced tailwind but it definitely will help them uh anytime a competitor is losing a lot of steam in a lot of ways that's that's definitely a good thing for your business at 31 times earnings uh it's pretty expensive but they are only trading at one time

sales so uh there is something to be said about that. The thing is, is they're not growing the dividend at all. The last five years, it's been steady. So I think the fact that it's expensive and they're not growing the dividend is why I've been staying on the sidelines to purchase more. But I think this is a really solid company. Yeah, sounds good. I'll definitely keep it on my radar. I do like infrastructure companies. And speaking of, well, I guess that's an engineering form. But speaking

of infrastructure companies, I'll go ahead and start with my last pick. So Brookfield Infrastructure Partners. So that's part of the Brookfield kind of family of companies. The main company is Brookfield Asset Management. So they kind of spun off Brookfield Infrastructure Partners, so BIP. They've spun off as well Brookfield Renewable Partners and a few other ones. I won't go into all detail, but generally their philosophy is the same. So they tend to have a capital allocation practice of where they'll buy undervalued assets, they will monetize them. And then when they find that they can actually sell them at a really good price, and they have something better to buy at a better valuation, they will sell them and then reinvest in type of businesses that are

infrastructure related. So infrastructure related for Brookfield, I know they own railways, they own processing for natural gas facilities. They own, I think they own some toll highways as well. I know they purchased back in Brazil, they have, I think, a partnership with one of the big REITs that focus on technology and data storage in Brazil so they really you know they do not discriminate so they have infrastructure all over the world so that's kind of an overview of their business one of the things that I I do like for for them is they have very stable cash flow. So when we look at their income statement, so you'll see that their revenue is growing. So it

went from 2014 up to 2018. So it went from 1.9 billion. Sorry, I think you have the right revenue here at 1.9 billion to 4.6 billion at the end of 2018 and then their net income if we look at per share the data I have here it it's kind of been up and down and it's hard to value this company by earnings per share because they're really a kind of cashflow generating machine and And I know they use, they use, I don't know if you're familiar with it, Brayden, they use a metric and I'm kind of losing it right now. Yeah, funds for operation. That's it. I was like, I was looking for it. I couldn't remember what the term is. So it's basically funds that are cash available for

distribution as well. So they'll use these different metrics. But all that to say they do generate a lot of cash flow. One of the big things to keep an eye on, although I do trust management for Brookfield Infrastructure Partners, is they do have a lot of debt. So when you look at their assets, they have $36.5 billion in assets, but they also have.5 billion in assets but they also have 31 billion in liabilities so they are quite levered but again you have to kind of factor in the business where they have really predictable cash flow for a business that would not have predictable cash flow i'd be a bit more concerned about the debt level but for them i think they get a bit of a pass for that. For the cash flow itself, again, when you're looking at them, so they do have a lot of free cash flow, their dividend is not quite covered. But I know when they use their different metrics,

it does cover the dividend. And because they're looking at recycling capital, so they're selling asset and buying new ones, I know that does fluctuate as well, but they're looking at recycling capital. So they're selling asset and buying new ones. I know that does fluctuate as well. But they're very well managed. And it's definitely a company that I'll keep for the long run. Yeah, I love this company. Personally, all the Brookfield names are really solid. They're absolute cash flow generating machines, as you mentioned.

These companies that are. are dot uns they are different you have to look at them differently in terms of what you said funds from operations or adjusted funds from operations so you look at them like a reit um and and not conventionally like when you look at income statements so i mean this is an absolute cash flow generating machine and i think owning brookfield infrastructure partners or bro Asset Management, which is their parent company, under different tickers, these are companies you want to own in low interest rate environments, which we are in right now. And yesterday, the Bank of Canada held interest rates. So that is what most people, what most economic indicators point to is low interest rates for a while now. So I'm not going to sit here and tell you where interest rates are going,

but I definitely think this is a good name to own in a low interest rate environment. My question for you is why own BIP versus just owning Brookfield Asset Management? I just own Brookfield Asset Management? I just own Brookfield Asset Management. It has a piece of all four of their big verticals. And I'm just wondering why you see an advantage of holding BIP, the infrastructure partners one, versus just holding BAM. Yeah, I mean, it really depends what you want to focus on. So BIP or BEP, Brookfield Renewable Partners I

mean it's really it depends what you're looking for so you're gonna get a bit more exposure specifically to those type of businesses or a bit more exposure to infrastructure and Brookfield Renewable Partners you'll get more exposure to renewable energy so those are kind of a bit more focused. It's just to me a personal preference. I think they've all done quite well in the past. One thing I love about all the Brookfield family is they're very straightforward in terms of their distributions or dividend to shareholders. So they do have a plan. They're very straightforward and they have a good history of following them as well so they want if I remember

correctly I think they want to increase the dividend from five to eight percent depending on cash flow available for distribution per year so they do have targets so for a dividend growth story it's something to look at from that perspective. And of course, BIP and BEP have a bigger dividend than Brookfield Asset Management. So that's also something to consider. Then again, you may get more capital gains with Brookfield Asset Management. So it really depends what you're looking for, I would say. Yeah, they are um this for so long uh brickfield asset management sat on my list of exactly what we're talking about as expensive companies that are really high quality that generate obscene amounts of cash flow so um i added it to my portfolio finally

um and my subscribers at stratosphere investing get to see all that stuff but the reason for that is it keeps it keeps going higher and higher and pension funds cannot get enough of Brookfield like it's just outrageous the amount of confidence that everyone has in it and they have 340 billion in alternative assets and I believe over $150 billion in fee-bearing capital. It's hard to say. It's just a mammoth of a company. They operate all over the world. It is a great place to park money if you want exposure to alternative investments. You can buy them right on the stock market. So it's perfect. Yeah, exactly. And those are really great companies too. Last year was, I think, like summer of 2018

up until the end of 2018, early 2019. For whatever reason, people were like, especially summer, were really excited about growth companies and down on dividend stocks. So these were really attractively valued and that's when I got most of my position in so it's been a really good company and you know what there's a correction I really don't care they pay a juicy dividend I can just sit back enjoy the ride and possibly buy more shares yeah that's true VIP does

pay a nice yield compared to the VAM all right anything else to add to this one I think it's a great pick. Yeah. No, no. I think that's it. I mean, obviously, it's an overview and we can only say so much in a few minutes. So definitely, if people are interested in those companies, just keep researching them. Those are just some of the metrics we look at. But like we mentioned, we go more in depth. I know I personally like to listen to conference calls and so on. So just make sure you do your due diligence before you start positioning them. Yeah, exactly. The point of this podcast is to understand the kinds of things that we are looking for in our quick analysis. And then comes the fun of reading annual reports,

like you said, listening to calls. I probably don't do enough of that, but I definitely scour the MD&A from management before I enter any position and look for a long history of demonstrating working for shareholders' best interest. And I think all the companies we're talking about today are definitely fitting that category. Yeah, that's it. So yeah, I think that's wrapping it up for our show today. Anything else to add, Braden? No, that's great. As always, feel free to go on GetStockMarket.com, which is available in the show notes of this episode. You can sign up to get a list every month of the top Canadian dividend stocks that come out using some of our basic

screens. And like I said, this is an entry point to looking and doing your research. And I think this is a great place to start. The Canadian investor is not to be taken as investment advice. Braden or Simone may own securities mentioned on this podcast. Always make sure to do your own research and due diligence before making investment decisions.