Ryan Bushell of Newhaven Asset Management.Illustration by Jacqueline Oakley
Sign up for the Globe Advisor weekly newsletter for professional financial advisors. For more from Globe Advisor, visit our homepage.
Money manager Ryan Bushell is a more cautious investor than many of his peers because his clients have more “modest wealth.” He describes them as hard-working Canadians without the benefit of family money who’ve scrimped and saved for decades to live comfortably in retirement.
“We can’t take the view that everything will be okay in the long run. We have to generate stable returns for them every day, week, month and year,” says Mr. Bushell, president and portfolio manager at Newhaven Asset Management Inc. in Toronto, who oversees about $140-million of his firm’s $316-million in assets.
As a result, his focus is on preserving capital and producing income, which includes investing in mostly dividend-paying Canadian companies in sectors such as utilities, infrastructure, telecommunications, energy and financial services.
“We like to put money in companies that pay dividends regardless of which direction the markets are heading,” he says.
His portfolio has returned 13.8 per cent so far this year and 17.3 per cent over the past 12 months. His three-year annualized return is 7 per cent and five-year annualized return is 9 per cent. The performance is based on total returns and is net of fees as of Aug. 31.
The Globe spoke with Mr. Bushell recently about what he’s been buying and selling:
Name three stocks you’ve been buying and continue to own.
Pembina Pipeline Corp. PPL-T is a stock I’ve owned for several years and continue to buy for new clients. There has been a bit of an overhang on the stock, partly because investors see the company as the most logical bidder for the Trans Mountain Pipeline when that becomes available, which would likely lead to a large equity issuance. We’ll see if they buy it, but I’m not sure how much of a hurry the federal government will be to divest that asset.
I also think Pembina will benefit the most from growth in liquefied natural gas (LNG) in Western Canada. Pembina has a stake in the Cedar LNG project and has the most comprehensive processing network for natural gas in Western Canada. I think it’s attractive at current prices, and investors get a 5.25-per-cent dividend while they wait for that growth. The company has been a good steward of shareholder capital over the years.
We also hold Brookfield Renewable Partners LP BEP-UN-T and some in its corporate affiliate, Brookfield Renewable Corp. BEPC-T. Their prices have been under pressure. The sector has been impacted by rising interest rates and the change in sentiment on renewables after some excitement in 2021. The company’s assets have also been underperforming in recent quarters, but we’ve seen improvements in the most recent quarter.
Also, the recent deal with Microsoft Corp. MSFT-Q is a major development: 10 gigawatts of power that will be constructed over the next five years. Brookfield has the resources and the motivation to do it, and there are probably more deals like this coming. The partnership units have a 5.8-per-cent dividend yield, while the corporate structure yields about 5 per cent. We’ve owned these investments since early 2020 and continue to buy them with new client money.
Aecon Group Inc. ARE-T, the construction and infrastructure development company, is a stock we’ve owned since before the pandemic. It’s been a rocky few years for the company. We topped it up last fall when the stock dropped to around $10 following some writedowns related to rising costs and delays on some of its legacy projects. It also sold its roadbuilding business in Ontario and its 49.9-per-cent interest in the Bermuda International Airport last year. The company is starting to sign more contracts that don’t have fixed pricing. It also recently signed a partnership to build utility assets in the U.S.
The stock has been volatile lately thanks to a more recent writedown. Aecon is a bit of a coiled spring. It’s in the businesses people are looking to own in the areas that are set to experience strong growth ahead. The margin profile should be better now that fixed-price contracting is behind them. They won’t do that again for big projects. We’re still buyers at these levels, and it has a 4.25-per-cent dividend yield.
Name one stock you’ve recently sold.
Gold miner Agnico Eagle Mines Ltd. AEM-T is a stock we’ve been trimming over the past couple of months after a strong run. The stock is up more than 60 per cent over the past year. We first bought in 2021 and added more late last year. We wouldn’t recommend buying at current levels. We still own it but wanted to take profits and put the money elsewhere. We may buy more if the stock drops further.
This interview has been edited and condensed.
For more from Globe Advisor, visit our homepage.