Ryan Bushell

The rate adjustment, from 3.65% in the spring of 2023 to 5% in early October, was a landmark moment in terms of valuations having to adjust to the new normal of higher rates. Rates moved up at the front end, but not at the long end.

We're through that now. Long rates are certainly not going back to the levels of 2020-21, but not even to the levels of the last decade. We're in a new range of 3-5% on the 10-year. These utility and infrastructure companies have more robust business opportunities ahead of them for the next decade, which should offset some of the rate impact.

The actual business impact of higher rates is not as great as the market assigned to it.

That's a short-term move that could reverse itself in 2024. The worry there was not so much rate driven, though rates are a big part of banking. The worry there was on the economy. He's in the camp of there being a harder landing than most are expecting, if rates stay where they are. 

You don't have rate cuts without getting a hard landing. And you can't have a good economy with rates this high. We're between a rock and a hard place.

He has a weighting in 4 of the 5 big banks, but he's quite a bit underweight on financials and on banks specifically.

He's pretty conservative on the economy. Haven't seen full impact of higher rates. Good performance, but in a riskier space. Don't chase at these levels. Be cautious. Instead, earn 4.8% on your cash for 6 months, see how things go.

We're seeing some layoffs, contraction below and at the surface. If he's right on the economy, 2024 might be the year we see it above the surface. The economy last year was stronger than most thought, including himself. We'll see if we can do it two years in a row.

When you're getting paid to wait by sitting in cash, you can afford to wait for many of the companies on your radar.

Buy at current levels. Good exposure to growth in natural gas demand, with natural gas egress in western Canada. Company split will probably eventually be well received -- the asset is fully contracted for 2 decades, predictable cashflows. Discount to peers. Yield is 7%, solid.

Uncertain future, with RCI.B divesting its stake. Tough times with US broadband. Rogers is now in their backyard and ready to compete. Question marks, reflected in the share price. Won't see big dividend growth. Will investing in wireless give them more earnings? Wait a couple of quarters. Yield is 5.6%.

For the mid-cap Canadian companies in the space with higher yields, be very careful. If you're looking for dividend sustainability, we've gone through a couple of cycles in the last decade -- dividends have been both increased and reduced. Yield is 11%.

In the space, he prefers FRU.

His preference in the space. A bit less cyclical to commodity prices, as they get royalty payments more on production than on commodity prices. Yield is pretty high, almost 8%. See his Top Picks.

If a Schedule 1 Canadian bank's dividend isn't safe, we have a big problem. The only one to ever cut was NA, but it was decades ago. Not in jeopardy.

Big runup. Pretty well set up here. Quebec economy is pretty vibrant. Likes the company, but prefers TD and RY.

He owns RY and TD in the space. More stable and diversified than the others.

He owns RY and TD in the space. More stable and diversified than the others.

Commodity price downturn has been pretty abrupt, but still nice levels for Canadian producers. $70 crude converted to CAD is still a pretty nice number. On the gas side, transformational event will be LNG Canada egress coming on late 2024 and early 2025. It will make capital budgets more dependable. Can deploy capital here, but keep powder dry in case of economic or commodity weakness.

See his Top Picks.

5 decades of straight dividend increases every year. You won't find a more sustainable dividend. Yield of 4.2% is lower, so not a ton of income, but sustainable and growing. Core position for him. Hopes it'll be around forever; it gets dark every night, people need to turn the lights on. High payout ratio, but not uncommon for utilities, and payout ratio on cashflow is very conservative.

He likes to buy below $50. But sometimes you just have to hold your nose and buy it. For new clients, he buys half, waits 6-12 months for a dip. If none appears, he goes ahead and buys the rest, because you want to at least get on the train for those dividends, rather than waiting forever for the right price and it never comes around.

Tough year, along with other green-opportunity power producers. Some of that was unwarranted. Looking at it, but already owns so much in the space, like AQN. No problem with it at current levels. Yield is 6.6%. See his Top Picks.

Likes it long term. Unique collection of assets, as investors get exposure to private equity infrastructure through a public company. Yield is around 5%, which is increasing at 5% per year.