Canadian General Investments: Long-Term Record Of Outperformance
Edison | Apr 26, 2018 01:41AM ET
Canadian General Investments Ltd (TO:CGI) is a Canadian investment corporation, providing investors with a broad exposure to primarily Canadian, but also selected US, equities. Manager Greg Eckel suggests the company may be considered a ‘one-stop shop’ for investment in Canada. CGI has a positive investment track record; it has outperformed its benchmark S&P/TSX Composite index over one, three, five and 10 years, and over much longer time periods. More recent performance has benefited from a repositioning of the portfolio at the beginning of 2016, which included increasing the materials exposure. Total annual distributions have remained stable for the last six years, but the manager is hopeful that annual dividends can increase in the future. CGI has a dividend yield of 3.4% (including a 4c special dividend).
Investment strategy: Unconstrained and bottom up
CGI is managed by Greg Eckel, who selects stocks on bottom-up basis, seeking companies with positive fundamentals and strong management teams trading on reasonable valuations. The manager is unconstrained by the benchmark’s sector allocations and invests with a long-term focus. At end-March 2018, on a geographic basis CGI’s portfolio was split broadly 80:20 between Canadian and US equities. Taking 0.6% cash and equivalents into account, net gearing was 17.4%; gearing is made up of C$75m Series 4, 3.75% preference shares and C$75m bank debt.
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