среда, 29 апреля 2020 г.
вторник, 28 апреля 2020 г.
Nervous Investors: 1 Canadian Growth Stock to Withstand Volatility
Are stocks still cheap? I’d argue that the answer is a resounding no. Aside from oil and financial companies, there are not a whole lot of stocks that can be labeled as cheap today. That doesn’t necessarily mean that there isn’t anything else to buy.
One company worth investigating is Open Text (TSX:OTEX)(NASDAQ:OTEX). I haven’t yet re-entered a position, but I am considering buying into the company. It is a solid growth company with a great dividend. On top of that, Open Text is a software-based company that should be less impacted by the negative impacts of pandemic-based lockdowns.
A business that can withstand the lockdown
The pandemic sweeping the globe has exposed weaknesses with conventional business models and has opened the door to a new way of operating. A lockdown means that more people will become accustomed to working online out of their homes. I’m quite certain that there are a number of businesses considering a more permanent move to a decentralized system.
This company is positioned to profit from the transition to more digitized workspaces. It has a number of businesses that should be able to withstand the accelerated transition to a web-based society. Open Text’s cybersecurity business, bolstered by its purchase of Carbonite late last year, will be in high demand, as more and more companies conduct their operations, meetings, and transactions online.
Open Text also has a business network arm that should be in high demand, as companies transition their operations to online workspaces. It is likely to be the case that these transitions, already in progress before the pandemic, will be expedited by companies like Open Text. The trend could continue following the return to normal business operations.
A profitable company
The company’s Q2 2020 results were pretty impressive. One of the best numbers in my mind was that 73% of its revenues are now from recurring sources. Total revenues were up 4.9% year over year and recurring revenues were up even faster, up 6.5% over the same period a year earlier.
In addition to excellent operational results, Open Text also pays a rather healthy dividend. The company currently pays out a dividend of US$1.01 on an annual basis, or a yield of 1.95% at the current share price.
The bottom line
Open Text operates in a growth area of the economy, cybersecurity, and the transition to digital workplaces. Online solutions were already a profitable business before the pandemic. The work-from-home era definitely got a shot in the arm from the lockdown. It is likely that the transition will continue in the future.
I think that you could probably pick up Open Text today, since it is still trading well below its highs and will do well over the long term. It is not the fastest-growing company, and it does have a fair bit of debt for a technology company. Its growth is steady, though, and its dividend is solid. If you are looking for a Canadian tech company that will give you a steady income stream, this would be a good one to buy.
This tiny TSX stock could be the next Shopify
One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting…
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago – before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!
Fool contributor Kris Knutson has no position in any of the stocks mentioned. The Motley Fool recommends Open Text and OPEN TEXT CORP.
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Canada Revenue Agency: 3 Big Tips for 2020
The Canada Revenue Agency has been forced to adapt to the COVID-19 pandemic to provide services for a reeling population. In a normal year, Canadians would be hustling to complete their tax returns by April 30. However, this year the federal government extended the deadline to June. On top of that, the Canada Revenue Agency has adopted other changes.
Today, I want to go over three important tips for Canadians as we approach the crucial month of June. Let’s dive in.
Canada Revenue Agency: Remember new changes in 2020
Last week, I’d discussed the Canadian Emergency Response Benefit (CERB). This new program was introduced by the federal government to provide quick and easy financial relief to those who needed it due to the COVID-19 pandemic. As of late last week, Statistics Canada revealed that over seven million Canadians had applied for the CERB. This will make the Canada Revenue Agency very busy in the months to come.
It is important for applicants to understand eligibility when they are applying for the CERB. Some of the prerequisites were loosened in April to include applicants who had experienced a sharp reduction in pay at their place of work.
Retirement tip: Canada Pension Plan enhancement
New changes saw Canadians contributing more to their Canada Pension Plan (CPP) as of January 1, 2019. Canadians can claim a deduction for their enhanced contributions to the CPP. Annual contribution rates will also rise, albeit modestly, over a seven-year period. This change was introduced by the ruling Liberals to increase retirement income for Canadians.
Beyond the Canada Revenue Agency, Canadians should also work to secure their retirement through their portfolio. This can involve investing in stable, income-yielding equities. Fortis remains one of my top picks on the TSX. Shares of Fortis have climbed 2.5% in 2020 as of early afternoon trading on April 28. The stock is up 10% year over year.
Moreover, Fortis has delivered dividend growth for over 45 consecutive years. It currently offers a quarterly distribution of $0.4775 per share. This represents a 3.4% yield. Fortis stock still possesses a favourable price-to-earnings ratio of 14. Utilities qualify as an essential service and are safe holds in this time of crisis.
Don’t forget the Basic Personal Amount
Before the COVID-19 pandemic, I’d discussed what at the time was the biggest change for the Canada Revenue Agency. The Basic Personal Amount (BPA) was created to help Canadians with their basic needs. It aimed to achieve this by imposing no federal income tax on a certain amount of income that an individual earns.
The Liberal government aims to bring the BPA to $15,000 by 2023. In 2019, a Canadian taxpayer could earn up to $12,069 before paying any federal income tax. The debt burden on Canadians has increased in the years following the previous financial crisis. This year has brought about a financial catastrophe that may take decades to repair. Taxpayers should use every Canada Revenue Agency tool at their disposal. This includes the BPA.
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Report: Blockchain to Increase Royalty Streams to Artists in the Digital Music Industry
The transition of royalty payments into the blockchain should empower artists in the music industry by increasing their bargaining power for asking higher payouts, claims a report that blockchain-based digital music platform, OPUS has shared with Cointelegraph.
According to OPUS’ study, given the novelty of introducing blockchain to the digital music streaming services market, they see great potential growth.
The blockchain-based platform says that artists may be attracted to decentralized platforms because of the potential for relatively higher earnings, compared to conventional platforms.
OPUS believes that a shift to tokenized royalties would also diversify personal portfolios of artists.
In recent years, the research observed a “substantial” increase in the cashflows payable on the grounds of royalty-related contracts in the entertainment and media industries.
Regions with a growing interest in blockchain solutions in the industry
Fees for the use of intellectual property increased at an annual rate of 8.99% in 2017 and 5.81% in 2019.
The report predicts that blockchain’s role in the music industry will be especially notable in emerging economies such as China, Brazil, India and Russia, despite the dominance of mainstream platforms such as Spotify, Apple, Amazon and Google.
The Asian giant is the one that stands out the most, as its royalty payments quadrupled between 2016 and 2017.
Another country of interest is Venezuela, as OPUS states that there is a growing adoption by blockchain technology.
Education as a key factor to raise awareness
However, OPUS claims that the open-source decentralized music platforms of the future should not just focus on increasing the musicians’ final share in the royalties, but also educate them on applicable aspects of financial literacy.
The report adds that new platforms will have room to grow:
“As this market is currently dominated by a few large players, there is a significant room for new platforms to change the way and amount of royalties distributed to individual musicians, podcast producers, and all other artists. In particular, the Blockchain is here to change the status quo.”
In 2019, Cointelegraph reported several use cases of blockchain applied in the music industry such as the global media giant Warner Music. Warner announced that they would start creating digital tokens using a public blockchain backed by the creator of CryptoKitties.
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