Ryan Bushell, president and portfolio manager at Newhaven Asset Management Inc. in Toronto.Illustration by Jacqueline Oakley
Money manager Ryan Bushell was running Canadian-based portfolios long before “Buy Canadian” became a thing this year.
“Yes, Canada is only 3 to 5 per cent of the world’s GDP, but it’s a great 3 to 5 per cent,” says Mr. Bushell, president and portfolio manager at Newhaven Asset Management Inc. in Toronto, who oversees about $190-million of his firm’s $375-million in assets.
Mr. Bushell also believes he can find enough diversification with Canadian-domiciled names that have operations outside the country. The firm is invested 100-per-cent in Canadian stocks, but more than 50 per cent of these companies’ revenues are from outside the country.
“The mixture of companies and the domestic opportunities we have here – we feel comfortable putting that forward for clients,” he says.
His investment strategy is focused 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.
His portfolio has returned 9.6 per cent so far this year and 16.4 per cent over the past 12 months. His three-year annualized return is 9.2 per cent and his five-year annualized return is 14.4 per cent. The performance is based on total returns, net of fees, as of July 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.
Premium Brands Holdings Corp. PBH-T, the Toronto-based specialty food manufacturing and distribution company, is a stock we started buying in March and continued to buy in recent weeks.
There’s been some negativity about the company related to its relationship with Starbucks Corp., given the coffee chain’s poor sales lately. We don’t think that issue has been resolved yet, but Premium Brands has also been building a relationship with Costco Wholesale Corp. in Canada and the U.S.
We like the management team. We think it has done a great job over the years of steadily increasing the dividend – now yielding about 4 per cent – and making disciplined acquisitions.
We own a lot of infrastructure, utilities and energy companies, so this is a good diversified company for us. Also, a good chunk of its business is in the U.S., so that helps with geographic diversity.
Pembina Pipeline Corp. PPL-T is a stock I’ve owned since starting at Newhaven in 2018 and dating back to the previous company at which I worked. We bought more recently after the stock sold off.
The company faced issues following the purchase last year of Enbridge Inc.’s interest in the Alliance pipeline. [Pembina now fully owns the pipeline and recently reached a settlement with shippers on fees and revenue sharing, which will reduce its revenue from the pipeline]. We believe the selloff was overdone, considering the synergies and other benefits of owning the pipeline directly, rather than sharing with Enbridge.
There’s also future potential with its Cedar LNG project [in partnership with the Haisla Nation in Kitimat, B.C.], although it’s still too far away for investors to be valuing it. There are also risks associated with the floating LNG project – something that has never been done before in Canada.
I’m pretty confident Pembina will be able to execute on that project and think that, as it comes into view toward the end of next year, hopefully we’ll see a recovery in the share price. Meantime, we’re happy to keep tucking this stock away for clients with a nice 5.5-per-cent dividend yield.
Arc Resources Ltd. ARX-T, which produces crude oil, natural gas, condensate and natural gas liquids in Canada, is another stock we own and like. We bought more of it in October, 2020 and again recently when the stock dropped.
We’re positive on the natural gas demand story in North America and abroad. Arc has been one of the best, most proactive companies in terms of diversifying its exposure to different commodity price hubs and entering into contracts for LNG.
It’s one of the shippers that’s committed to supplying gas for Cedar LNG with Pembina, so there’s a tie-in there, but it also has some going to the Pacific Northwest. It’s well-positioned for natural gas volume growth in Canada.
It also produces a significant amount of the condensate used in oil sands production, a market that appears stable and is experiencing slight growth. The company is well managed, with a growing dividend that currently yields just under 3 per cent, and it has been buying back stock.
Name a stock you recently trimmed or sold.
Agnico Eagle Mines Ltd. AEM-T, the Toronto-based gold miner, is a stock we trimmed in April after its dividend yield fell to 1.5 per cent from around 3 per cent when we first bought it in October, 2021 (and added to it in November, 2023).
We earned a lot of capital on this name. We typically try to recycle some of those dividend gains back into the portfolio to purchase stocks earning more income. Importantly, we’re not parting with Agnico, but we took a per cent off the table in accounts where it got overweight – to about 3 per cent from 4 per cent. That’s just our discipline. We try to always have the portfolio earn as much as we can in dividends each quarter. We’re still happy owning it and having something that’s correlated away from the fiscal problems we’re having in G7 countries.
This interview has been edited and condensed.