My investing strategy is to buy dividend stocks when they are value priced and hold them for the growing dividend income. This approach requires patience and discipline to stick with the strategy for the long term.
I recognize that dividend growth stocks won’t always be in favour, but these stocks have consistently out-performed non-dividend payers over time.
I’m cautious about participating in stock picking contests, since my focus is on investing for the long term, tuning out financial media noise, and ignoring today’s story stocks.
But when Nelson from Financial Uproar asked me to participate in a stock picking contest for 2012, I thought it might be a fun challenge.
Here are the rules:
Each blogger contributes their 4 best stock picks and every quarter we will post an update on our progress. The winner will be crowned on December 31st, 2012. Dividends are counted in the results, but any currency fluctuations aren’t. Each stock is treated the same in the imaginary portfolio.
Trying to pick stocks for 1-year performance is usually a quick ticket to the poor house. We’ve all heard the joke that someone could just throw darts at the board and beat most professional advisors.
I narrowed that down by randomly selecting from this list of Canadian stocks with the lowest P/E ratios. My theory is that most of these stocks were beat-up last year and have the potential to rebound in 2012.
My 4 Best Stock Picks for 2012
1. Brookfield Asset Management (BAM.A) – Brookfield owns and manages commercial property (mainly office, but also retail and residential), power (mainly hydroelectric), and infrastructure (timberlands and power transmission) assets. Located around the world, its assets are concentrated in the United States, Canada, Brazil, and Australia. Stock price as of January 2nd is $28.04.
2. Bombardier Inc. (BBD.B) – Bombardier is a leading manufacturer of transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems, and services. With a home office in Montreal, it has facilities and 65,200 employees in 29 countries. Revenue for fiscal 2011 was $17.7 billion. Stock price as of January 2nd is $4.06.
3. Teck Resources Ltd. (TCK.B) – Teck is a diversified miner with operations in Canada, the United States, Chile, and Peru. Metallurgical coal and copper rank as Teck’s primary commodities in terms of sales and earnings contribution, followed by zinc and lead. Teck ranks as the world’s second-largest exporter of seaborne metallurgical coal, and the second-largest mine producer of zinc. Stock price as of January 2nd is $35.91
4. Magna International (MG) – Frank Stronach started Magna International in his Toronto garage in 1957. The company has since become one of the largest, most diversified auto parts suppliers in the world. In 2010, revenues were $24.1 billion, nearly half of which came from the Detroit Three while one third came from Germany’s automakers. The firm prides itself on a unique entrepreneurial culture and a corporate constitution that outlines distribution of profits to various stakeholders. Stock price as of January 2nd is $34.00
You can see all of the contestants and their 4 best stock picks over at Financial Uproar. Here’s a list of the other bloggers participating in the contest:
- Financial Uproar
- Fabulously Broke
- Canadian Personal Finance
- Control Your Cash
- My University Money
- Young and Thrifty
- Sustainable Personal Finance
- Holy Potato
- Don’t Quit Your Day Job
- Money Mamba
What are your 4 best stock picks for 2012?