Norbord Inc. (TSX: OSB). Norbord shareholders received a pleasant surprise recently when the board
approved a special stock dividend of $4.50 for shareholders of record as of
Sept. 1. Not surprisingly, the share price jumped on the news.
The announcement came after the company posted the best second-quarter
results in its history with adjusted earnings of $167 million ($1.92 per
share, fully diluted) compared with $95 million ($1.10 per share) in the
same quarter last year. The company reports in U.S. currency.
Norbord manufactures oriented strand board (OSB), which is used in home
construction. It is a cyclical company that is currently benefitting from
high prices and strong demand for its products. CEO Peter Wijnbergen says
that is expected to continue.
“Given the positive outlook for OSB demand in North America and Europe
driven by continued growth in the construction and renovation of homes, as
well as meaningful growth in industrial end-uses and export markets,
Norbord is well positioned to continue to return excess capital to
shareholders, including through share repurchases,” he said.
But a word of warning. This is a boom-or-bust company. Right now, it is
going through a boom phase. But as recently as March 2017 the quarterly
dividend was only $0.10 per share, and the stock was trading at around the
$30 level. So, if you own the stock, enjoy the ride for now, but be
prepared to sell at the first sign of a slowdown in home construction.
Pembina Pipeline Corp. (TSX: PPL).
The company recently released strong second-quarter results that drove the
price higher despite the headwind of higher interest rates.
All the numbers were impressive. Revenue came in at $1.9 billion, up from
$1.2 billion in the same period of 2017. For the first six months of the
fiscal year, revenue was $3.8 billion compared to $2.6 billion the year
before. The acquisition of Veresen last year was a major contributor to the
Earnings were $246 million ($0.43 per share), up from $117 million ($0.24 a
share) in the second quarter of 2017. For the first six months, Pembina
earned $576 million ($1.02 per share) compared with $327 million ($0.72 a
share) the year before.
“We are seeing strong customer demand for our services, leading to higher
volumes and increased utilization in the Pipelines and Facilities
Divisions, combined with rising commodity prices which drive solid
performance in our Marketing business,” said CEO Mick Dilger.
The monthly dividend was increased by a penny in May, to $0.19 per share
($2.28 per year).
My Income Investor newsletter rating on this stock is a buy, as I
see it as the best choice in the pipeline sector right now. Consult your
financial advisor before making a decision.
is one of Canada’s best-known personal finance commentators and
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