Monday’s TSX breakouts: A fund yielding over 5% that just announced an 18% distribution hike

• Comments
• 
  Share via email
  
• 
  Share on facebook
  
• 
  Share on twitter
  
• 
  Share on LinkedIn
  
• 
  

Today, just one company in the S&P/TSX composite index is scheduled to release its fourth quarter financial results, Ensign Energy Services Inc. (ESI-T).

There are no Canadian economic releases scheduled for today.

Briefly recapping Friday’s stock market returns, U.S. markets were relatively flat, while Canada’s benchmark got a lift from gold stocks.

Distribution policy

The Fund pays unitholders a monthly distribution of 11 cents per unit, or $1.32 cents per share yearly, equating to an annualized yield of 5.0 per cent.

On March 2, the Fund announced an 18 per cent increase raising it to 11 cents per unit from 9.35 cents per unit, reflecting management’s positive outlook for 2017.

In 2016, the payout ratio was 53 per cent.

Analysts’ recommendations

This small cap security, with a market capitalization of $281-million, is not formally covered by any analysts on the Street.

Chart watch

In 2016, the unit price climbed 29 per cent. However, the positive price momentum stalled in mid-2016. Since then, the unit price has been consolidating, or trading sideways, principally between $23 and $26. Year-to-date, the unit price is up 5.8 per cent, and it is currently trading at the upper end of this trading band.

Patient investors can potentially be opportunistic, waiting for the unit price to retreat to the lower end of this trading range. Just last week, for instance, on Feb. 28, the unit price closed at $23.86.

There unit price is approaching a strong resistance level around $26.50. Looking at the downside risk, there is support around $24, and failing that around $23.

===

The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company’s dividend policy, analysts’ recommendations, and provides a brief technical analysis for a security to provide readers with more information.

If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.

Securities screened are from the S&P/TSX composite index, the S&P/TSX Small Cap index, as well as Canadian small cap stocks outside of these indexes that have a minimum market capitalization of $200-million.

A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.

Report Typo/Error