The Globe and Mail attempts to identify Canadian-listed companies growing their cash flow in its Thursday edition. The Globe's Ian Tam writes in the Number Cruncher column that for investors, the idea of a "rising interest-rate environment" is now on the back burner after the U.S. Federal Reserve cut rates in its July 31 announcement, with the U.S. trade war with China looming in the background. On the home front, the Bank of Canada kept rates steady in its announcement earlier in July, also pointing to tensions between the world's two largest economies.
If lower interest rates mean rising corporate debt costs are less of an issue now, then cash flow is king. Mr. Tam says a company's cash flow affords it the financial flexibility to reinvest in projects, weather downturns and pay dividends to shareholders. So even if higher debt costs are no longer a top-of-mind concern, cash flow is still very important. Mr. Tam made his picks from a pool of 702 Canadian companies to those growing cash flow. His picks had to have a market capitalization greater than $840-million. Mr. Tam recommends buying Collier's International Group, Kirkland Lake Gold, Boyd Group Income Fund, Atco and Brookfield Infrastructure Partners.
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