Monday, March 29, 2010

AGF Management and Gluskin Sheff Added

I added these two Canadian Asset Managers to the dividend lovers portfolio. Canadians love their mutual funds. while it makes me shiver at the thought of paying someone 2% a year to (miss)manage my money. The average Canadian is happy to do it.

These companies make their money off management fees they collect off of mutual funds they manage.

These two were the best value picks in the sector. This addition will also increase the diversification of the dividend lover portolio by adding new sector exposure to the portfolio.

CIBC had this to say about Gluskin:
Alternative strategies represent a large source of potential performance fees and should reduce performance fee volatility compared to equity investment strategies.
We estimate performance fee EPS of $0.87 in F2010 and $0.60 in F2011, which will likely be paid out as special dividends. Dividend growth remains a priority for management, as the company would like to build a long-term track record of annual dividend increases.
Gluskin Sheff currently yields 2.4% based on current regular quarterly dividends. We expect dividends will be able to grow by at least 5% in F2011 Our sum of the parts approach to valuing Gluskin Sheff results in a valuation of $26.25. Accordingly, we believe the shares are undervalued and rate Gluskin Sheff Sector Outperformer.
CIBC had this to say about AGF
AGF Management is the least expensive Canadian asset manager in our coverage universe at 10.2x our 2011E EPS, versus an average of 14.0x for the sector and a historical average of 14.4x. AGF is also the asset manager that provides the most earnings torque Loan loss provisions at AGF Trust resulted in greater earnings contraction vs asset manager peers during the economic downturn, and a return to more normal loss
ratios as the economy recovers should result in a material improvement in earnings.

And of course AGF.B and GS pay an eligible dividend, which is what the dividend lover portfolio is all aboooooout.


  1. I agree with Lovely_Ying012.. This article is very detailed and informative on this topic, thanks for sharing!

  2. Guys careful this post is old. its march 2010.