3 Performers North Of The Border

By Aryeh Katz | October 20, 2010 AAA

The Canadian winter may put a chill on your cheeks, but there's nothing frosty about Canadian investors' returns year-to-date. The Canadian market, as represented by its proxy ETF, the iShares MSCI Canada Index (NYSE:EWC), rose nearly 10% since the new year, a good deal better than the SPDR S&P500 ETF (NYSE:SPY), which has tacked on just over 5.5% over the same period.

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Below, we list three strong (and free?) Canadian performers, each boasting a reasonable dividend and some strong fundamentals.

Canadian Telecom Queen
Telus Corporation
(TSE:T) offers investors a fine 4.32% annual dividend and trades with a P/E ratio of 14.8. The company has positively flown since the bells rang at the beginning of January, up 35.6% in 2010 and 40.8% for the 12 months past.

Telus is Canada's second largest telecom company, with a market cap of $12.8 billion. At last report, the company grew its EPS numbers by 19% over the same quarter in 2009, locking in a profit of 92 cents per share. Perhaps that explains why management raised its annual dividend to 50 cents this summer.

Ice Cold Shopping
North West Company Fund
(TSE:NWF.UN) is a company with a very bright idea. They operate retail shopping outlets in remote locations like the Canadian North, Alaska, the South Pacific and the Caribbean. Most of its 226 outlets have no competition, and 90 stores have only partial road access all year round. For the year 2010, North West Company shares are up 10% and for the full year, they've risen 24%.

The company trades with a trailing one-year multiple of 12 times earnings and offers investors a 6.5% annual yield. Price to sales is just 0.67. Also, over one third of the company's shares are institutionally held.

Hot and Cold Energy
Fortis, Inc.
(TSE:FTS) is an electric and natural gas utility operation headquartered in Newfoundland and serving customers in five Canadian provinces and three Caribbean countries. The company's stock has climbed over 15% year-to-date and over 25% over the last 12 months.

Fortis has just confirmed its intention to build a new hydroelectric plant in British Columbia for nearly a billion Canadian dollars. The project will enhance the company's ability to supply energy to Western Canada. They already operate a natural gas utility in the province.

Fortis offers a 3.4% annual dividend to shareholders.

The Wrap
The Canadian market is brimming with fundamentally sound companies with reasonable dividend yields. The above three companies also offer some strong momentum for both YTD and full-year periods. (For related reading, take a look at Dividend Yield For The Downturn.)

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