The Globe and Mail attempts to identify Canadian companies reinvesting for
future growth in its Thursday, Nov. 9, edition. The Globe's Ian Tam writes in the Number Cruncher column that there are several views on what a company should
do with its bottom line. One of
these options is to distribute profits
to shareholders via dividends, which
is a style that is heavily in favour for
Canadian investors. Companies can
also opt to reinvest these proceeds
for future growth of the company.
For investors with a longer time horizon
who are able to take on more
risk in exchange for future returns,
the reinvestment option can be a viable
strategy, says Mr. Tam. He used Morningstar
CPMS to rank the largest 250
companies in Canada (excluding real
estate investment trusts) on forward and trailing reinvestment
rates, three-month estimate revision, quarterly sales momentum and the latest earnings surprise (the latest
reported figure for earnings per share compared
with the estimate just prior to the
company reporting). Mr. Tam's picks for companies with a strong focus on reinvesting are Colliers International, Constellation Software, FirstService, Kinaxis, West Fraser Timber and Great Canadian Gaming.
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