Author: Consultant

Dollarama Inc.DOL-T -5.65%decrease plans to build even more stores in Canada, hiking its long-term growth target to reach 2,200 locations by 2034.

The Montreal-based discount retailer, which currently operates 1,601 stores across the country, had previously set a goal of having 2,000 locations by 2031. The new plan, announced on Wednesday, followed “an updated evaluation of the market potential for Dollarama stores across Canada,” according to a press release.

In recent years, Dollarama has typically opened 60 to 70 new locations per year. And sales have been growing, particularly in recent years as consumers feeling the sting of inflation have flocked to discount retailers.

Dollarama also reported on Wednesday that its third-quarter sales grew by 5.7 per cent compared to the same period the previous year, to nearly $1.6-billion. Sixty new stores in the previous 12 months drove revenue growth, as did rising sales at existing stores.

To support its expanded operations, the company is also planning to build a new warehouse and distribution centre in Calgary, an approximately $500-million investment. Dollarama currently has a centralized distribution centre that is based in the Montreal area; the new facility will handle logistics closer to its stores in Western Canada. The company has agreed to purchase a parcel of land for $46.7-million, and expects to commission the new facility by the end of 2027. Construction is expected to cost roughly $450-million.

Cautious consumers are shopping at Dollarama stores more often, although they are buying slightly less on average during each visit: on Wednesday the company reported a 5.1-per-cent increase in transactions during the third quarter ended Oct. 27, and a 1.7-per-cent decrease in the average size of those purchases.

Comparable sales – an important industry metric that tracks sales growth not tied to new store openings – rose by 3.3 per cent. That was compared to a quarter in the prior year when comparable sales rose by 11.1 per cent.

Sales grew despite the fact that people splurged less than usual in preparation for Hallowe’en this year. Sales of seasonal products were down, according to the company, while shoppers continue to buy more “consumable” items such as food and household products.

Consumables come with tighter profit margins than other merchandise. Combined with higher logistics costs, that led to a slight decrease in the company’s gross profit margin, which fell to 44.7 per cent of sales in the quarter, compared to 45.4 per cent in the same period last year.

Dollarama’s net earnings grew to $275.8-million or 98 cents per share in the quarter, up 5.6 per cent compared to $261.1-million or 92 cents per share in the same period the prior year.

Royal Bank of Canada raised its dividend as it reported a fourth-quarter profit of $4.22 billion, up from $3.94 billion in the same quarter last year.

The bank says it will now pay a quarterly dividend of $1.48 per share, up from $1.42 per share.

The increased payment to shareholders came as RBC says it earned $2.91 per diluted share for the quarter ended Oct. 31, up from a profit of $2.76 per diluted share in the same quarter last year.

Revenue totalled $15.07 billion, up from $12.69 billion a year ago, while its provision for credit losses amounted to $840 million, up from $720 million in the same quarter last year.

On an adjusted basis, RBC says it earned $3.07 per diluted share in its latest quarter, up from an adjusted profit of $2.65 per diluted share a year earlier.

The average analyst estimate had been for an adjusted profit of $3.01 per share, according to data provided by LSEG Data & Analytics.

This report by The Canadian Press was first published Dec. 4, 2024.

National Bank of Canada raised its dividend as it reported its fourth-quarter profit rose compared with a year ago.

The Montreal-based bank says it will now pay a quarterly dividend of $1.14 per share, up from $1.10 per share.

National Bank says it earned $955 million or $2.66 per diluted share for the quarter ended Oct. 31, up from a profit of $751 million or $2.09 per diluted share in the same quarter last year.

Revenue for the quarter totalled $2.94 billion, up from $2.56 billion a year earlier, while the bank’s provision for credit losses amounted to $162 million, up from $115 million a year ago.

On an adjusted basis, National Bank says it earned $2.58 per diluted share in its latest quarter, up from an adjusted profit of $2.39 per diluted share in the same quarter last year.

The average analyst estimate had been for an adjusted profit of $2.57 per share, according to data provided by LSEG Data & Analytics.

This report by The Canadian Press was first published Dec. 4, 2024.

Scotiabank reported a fourth-quarter profit of $1.69 billion, up from $1.35 billion in the same period last year, as it set aside a smaller amount for bad loans compared with a year ago.

The bank says the profit amounted to $1.22 per diluted share for the quarter ended Oct. 31, up from 99 cents in the same quarter a year ago.

Revenue for the quarter totalled $8.53 billion, up from $8.27 billion in the bank’s fourth quarter last year.

The bank’s provisions for credit losses amounted to $1.03 billion in its fourth quarter, down from $1.26 billion a year ago.

On an adjusted basis, Scotiabank says it earned $1.57 per diluted share in its latest quarter, up from an adjusted profit of $1.23 per diluted share a year ago.

The average analyst estimate had been for an adjusted profit of $1.60 per share, according to data provided by LSEG Data & Analytics.

This report by The Canadian Press was first published Dec. 3, 2024.

Enbridge Inc. ENB-T +0.71%increase raised its quarterly dividend for next year as it released its financial guidance for 2025.

The pipeline company says it will pay a quarterly dividend of 94.25 cents per share, up from 91.5 cents per share, effective March 1.

The increased payment to shareholders amounts to an annualized dividend of $3.77 per share to give it an annual yield of about 6.2 per cent based on the company’s share price Monday.

In its outlook, Enbridge says it expects adjusted earnings before interest, income taxes and depreciation between $19.4-billion and $20.0-billion for 2025, a nine per cent increase from the midpoint of its 2024 guidance.

Distributable cash flow per share is expected to be $5.50 to $5.90 next year.

The company says the guidance is based on expected strong utilization across its businesses and contributions from acquisitions and growth projects that entered service in 2024 as well as partial-year earnings from projects that are expected to begin service in 2025.

South Korean President Yoon Suk Yeol declared martial law on Tuesday, accusing the opposition of “anti-state” activity.

In an unannounced address broadcast live late at night on YTN, Yoon said he had no choice but to take drastic measures to protect South Korean freedoms and the constitutional order. He asserted opposition parties have taken the parliamentary process hostage and thrown the country into crisis.

“I declare martial law to protect the free Republic of Korea from the threat of North Korean communist forces, to eradicate the despicable pro-North Korean anti-state forces that are plundering the freedom and happiness of our people, and to protect the free constitutional order,” Yoon said.

The White House did not immediately condemn the action by Yoon.

“The Administration is in contact with the Republic of Korea government and is monitoring the situation closely,” a National Security Council spokesperson told Fox News Digital.

Yoon did not say in the address what specific measures would be taken. Yonha news agency reported that the entrance to the parliament building was being blocked, according to Reuters.

“Tanks, armored personnel carriers, and soldiers with guns and knives will rule the country,” opposition leader Lee Jae-myung said in a livestream online. “The economy of the Republic of Korea will collapse irretrievably. My fellow citizens, please come to the National Assembly.”

The liberal Democratic Party has controlled South Korea’s single-chamber National Assembly since Yoon, a former top prosecutor, took office in 2022. Those in the opposition have repeatedly thwarted Yoon’s agenda and the president has had low approval ratings.

In his address, Yoon cited actions by the Democratic Party as justification for martial law, including an effort this week to impeach some of the country’s top prosecutors and the national assembly’s rejection of Yoon’s proposed budget. 

Democratic lawmakers had moved to slash more than 4 trillion won from the Yoon administration’s budget proposal. Yoon said the budget cuts would undermine the essential functioning of government administration. 

Yoon was handed a blistering political defeat earlier this year when South Korean voters expanded the Democratic Party’s majority in the assembly. One South Korean political analyst told the Associated Press the election results rendered Yoon “a dead duck,” with even control over his own party at risk following the losses. 

The South Korean president has also been beset by scandal involving his wife, first lady Kim Keon Hee. She was allegedly involved in a stock price manipulation scheme and the release of spy camera footage showed her accepting a luxury bag from a Korean American pastor, the AP reported.

The S&P 500 ticked higher to a new record to began December trading as investors looked for stocks to add to big November gains.

The S&P 500 was higher by 0.2%, touching a new intraday record. The Nasdaq Composite added 1%, also reaching a new intraday high. The Dow Jones Industrial Average was down 0.3% after briefly trading above 45,000. The blue-chip index had previously touched the milestone briefly a few times last week.

Intel jumped 3% after CEO Pat Gelsinger retired after four years of underperformance at the chipmaker. Shares of Tesla also gained 3% following an upgrade to buy from neutral at Roth MKM, with the firm citing as a catalyst Musk’s close relationship with President-elect Donald Trump. AI server maker Super Micro Computer surged 19% after a special committee found “no evidence of misconduct” and that the firm’s financial statements were “materially accurate.”

November marked the best month of 2024 for both the Dow and S&P 500, with the two gaining 7.5% and 5.7% respectively for the period. Most of the gains came in a postelection rally after President-elect Donald Trump emerged as the winner. Both of the indexes notched closing highs in Friday’s shortened trading session.

https://www.cnbc.com/2024/12/01/stock-market-today-live-updates.html

Canadian manufacturing activity increased at the fastest pace in 21 months in November as the Bank of Canada’s interest-rate cutting campaign boosted domestic demand and despite port strikes that worsened delivery delays, data showed on Monday.

The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) rose to 52.0 in November from 51.1 in October, its highest level since February 2023 and the third straight month above the 50.0 no-change mark.

A reading above 50 indicates expansion in the sector.

“Output and new orders both rose at stronger rates when compared to October, with firms noting an uplift in domestic market activity, linked in part to recent reductions in interest rates,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.

“In contrast, subdued global demand continued to weigh on overall sales.”

The Canadian central bank has cut its benchmark interest rate by one and a quarter percentage points since June, lowering the rate to 3.75 per cent. Investors expect further easing in a policy decision on Dec. 11.

The output index rose to 53.1 from 52.2 in October, while the new orders measure was at 52.7, up from 50.5. New export orders declined for the 15th successive month.

Canada sends about 75 per cent of its exports to the United States, so its economy could be harmed if U.S. President-elect Donald Trump follows through on a pledge to impose a 25 per cent tariff on imports from Canada and Mexico.

Average lead times for the delivery of inputs lengthened for the fifth straight month and by the most since August, which firms put down to rail delays and port stoppages.

Earlier this month, Canada moved to end labor disputes at the country’s biggest ports, including Vancouver and Montreal, citing economic damage.

A stronger U.S. dollar – the greenback notched a 4-1/2-year high against its Canadian counterpart last Tuesday – helped raise the price of imported goods, firms said.

Input cost inflation accelerated to its highest level since April 2023. The output price index also rose but remained below its recent peak in August.

Add one more headwind facing Magna International Inc. MG-T +1.35%increase: When U.S. president-elect Donald Trump announced this week that he will impose a 25-per-cent tariff on all products imported from Canada and Mexico, the Canadian-based auto-parts manufacturer looked vulnerable to the tough talk.

So why has the share price remained roughly unchanged, holding onto an impressive gain of about 20 per cent over the past 11 weeks? Perhaps markets are telling pundits to relax.

The prospect of tariffs disrupting Magna’s complex global operations – which include 342 facilities in 28 countries, serving 58 vehicle manufacturers – is just one of several issues that have weighed on the company over the past few years.

It took a US$376-million charge in 2022 after shuttering its six production facilities in Russia.

Sales of electric vehicles, a segment in which Magna has a substantial investment with parts such as battery enclosures, have not been living up to expectations. More broadly, light-vehicle production – Magna’s bread and butter – is in a global slump, falling 4 per cent in the third quarter year-over-year.

Magna’s share price has been struggling with these challenges. From a high above $125 in mid-2021, the stock fell by as much as 58 per cent by August, 2024.

Since then, Mr. Trump has won the U.S. presidential election, and his harsh rhetoric on tariffs has edged toward actual policy, raising additional uncertainties for the interconnected North American automotive sector, which has virtually ignored borders for decades.

“It’s important to consider that, for close to 30 years, the sourcing of light vehicles and their downstream components – the whole value chain – has not viewed Canada and Mexico as separate countries,” said Mike Wall, the executive director of automotive analysis at S&P Global Mobility, in an interview.

Curiously, though, Magna’s share price has rebounded from its August lows, suggesting that investors aren’t too worried.

The stock’s cheap valuation, based on price-to-earnings and price-to-book ratios, implies that a lot of bad news has been priced in.

Interest rates may be working in Magna’s favour as well. As central banks cut their key rates in response to tamed inflation, lower borrowing costs should help stimulate vehicle sales.

A third factor: Magna has been adept at navigating the difficult environment for vehicle production. With its most recent quarterly results, released earlier this month, the company forecast relatively stable profit margins and announced it would buy back its own shares and pay down debt. The share price bounced 6.5 per cent on the day the quarterly results were released.

That was before Mr. Trump made his tariff announcement. Since then, Magna hasn’t commented publicly on the potential impact on its global operations and did not immediately respond to The Globe and Mail’s request for comment.

But at the Barclays Global Automotive and Mobility Tech Conference on Nov. 21, a top Magna executive did address the theoretical issue of tariffs – and didn’t sound particularly rattled.

Patrick McCann, Magna’s chief financial officer, wondered whether tariffs would hit vehicles or parts. In any case, if Mr. Trump wants tariffs to encourage production to move back to the U.S., he mused, it would be nearly impossible to achieve such a complex shift over a four-year period.

“Those are all the things that are up in the air, and I don’t have a crystal ball,” Mr. McCann said.

For now, investors appear to be okay with that. Magna’s share price, though down sharply over the past few years, is hovering just below a six-month high. And major equity indexes, including the S&P 500 and the S&P/TSX Composite Index, rallied to fresh records this week.

The leading theory is that optimism over Mr. Trump’s tariff threat isn’t misplaced: The incoming president would prefer to win concessions on illegal immigration and drug smuggling. What’s more, the optimistic case rests on 2016, when Mr. Trump made similar tariff threats prior to the start of his first presidential term. Back then, negotiations prevailed and stocks gained.

Indeed, Magna’s share price rallied 31.4 per cent from election day 2016 through election day 2020, not including dividends. That was well ahead of the 8.8-per-cent gain for the S&P/TSX Composite Index over the same period.

At the very least, this outperformance suggests that investors can do well by tuning out the bluster from the White House over the next four years and focus instead on how Magna is responding to challenging operating conditions. The headwinds are still there, according to the bullish case, but so is a cheap stock.