BMO chief strategist updates his North American Dividend Growth portfolio

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

BMO chief investment strategist Brian Belski updated his North American Dividend Growth portfolio,

“The North American Dividend Growth portfolio was up 6.6 per cent in the second quarter outperforming the Blended Dividend Aristocrats benchmark by 208 bps in Q2. The portfolio has also outperformed its blended benchmark by 2.6 per cent over the last 12 months. Overall, the outperformance this quarter was driven by security selection decisions within the Financials, Technology and Utilities sectors. Sector allocation decisions, particularly within Consumer Staples also contributed to outperformance. Relative Performance: 2Q25 = up 2.1 per cent; Benchmark: 60-per-cent S&P 500 Dividend Aristocrats & 40-per-cent S&P TSX Dividend Aristocrats . Annualized 5-yr = Outperform by up 1.1 per cent; Since Live Portfolio Inception = Outperform by 2.2 per cent annualized. Our security selection decisions within Financials were the main driver of value in Q2, as TD Bank, Royal Bank and Bank of America contributed the most to performance … Canada continues to provide strong relative value, a converging growth profile with the US and improving equity flows. We now expect Canada to slightly underperform the US for the remainder of the year, but will likely still net outperform the US in 2025”

The portfolio stocks are BCE Inc., Comcast Corporation, TELUS Corp, Verizon Communications Inc., Canadian Tire Corporation, McDonald’s Corporation, Restaurant Brands International Inc., PepsiCo Inc., Enbridge Inc., Suncor Energy Inc., TC Energy Corporation, Ameriprise Financial Inc., Bank of America Corp, Brookfield Asset Management Ltd., BlackRock Inc., Goldman Sachs Group Inc., Intact Financial Corp, JPMorgan Chase & Co., Manulife Financial Corp, Morgan Stanley, National Bank of Canada, Power Corporation of Canada, Royal Bank of Canada, Toronto-Dominion Bank, Amgen Inc., Gilead Sciences. Inc., Johnson & Johnson, Merck & Co. Inc., UnitedHealth Group Incorporated, Canadian National Railway Company, General Dynamics Corporation, Lockheed Martin Corporation, Waste Manaqement. Inc., Apple Inc., Cisco Systems Inc., Microsoft Corporation, Texas Instruments Incorporated, Eastman Chemical Company, LyondellBasell Industries NV, Brookfield Infrastructure Corporation, Capital Power Corporation and Emera Incorporated.

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Scotiabank analyst Mario Saric dissected new rent growth data for apartment REITs,

“OUR TAKE: Neutral. Yesterday’s Rentals.ca June data showed 0.2-per-cent month-over-month erosion in 2-BR asking rents vs. down 0.3 per cent in May and Flat 3-month avg. ; avg. 1BR fell 0.4 per cent, slightly worse than May. Overall National Apartment Rent fell 0.2 per cent vs. May, consistent with 0.1-per-cent erosion last month and a bit below the 0.2-per-cent 3-month avg. Edmonton was the best performing market with 1.3 per cent month-over-month asking rent growth, followed by Vancouver (up 0.9 per cent on 2BR), while Halifax was softer … we continue to recommend an overweight position in Apartment REITs through the summer months on better-than-expected population growth driving broader stabilization in asking rents (expansion in some markets). Our SO-rated names = CAR and KMP.”

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BofA Securities Research Investment Committee’s monthly report summarized the questions asked most frequently on their most recent road trip to see institutional clients,

“1.Will global growth rebound, and what’s the outlook for interest rates? We expect 3-per-cent global GDP growth and no Fed rate cuts in 2025. 2. Are tariffs having a visible effect on profits? Not yet, and earnings expectations and some macro data suggest a rebound; but watch Q3 results. 3. Have ‘soft’ surveys rebounded in line with “hard” market data? No, surveys are still weak despite strong data; better sentiment could be the key catalyst for H2. 4. Will global equities outperform U.S. equities in 2025? Global stocks are on pace to outperform the US by 11ppt, the best showing since 2009. 5. Will value stocks outperform growth? The US factors are about tied year-to-date, but we remain bullish on value. Globally, value investing has reliably outperformed. 6. Is deregulation already priced in for key U.S. sectors? Not yet. Our analysts are bullish on efficiencies for financials, multi-industrials, and consumer sectors. 7. Is artificial intelligence overhyped as an investment theme? Not yet. Business adoption is accelerating, and we see upside for both suppliers and users. 8. What does the NATO agreement mean for investments in defence? The 5 per cent of GDP target is credible, with major beneficiaries in Europe and the US. 9. When is it time to raise allocations to small and mid-cap stocks? The earnings recession could end in ‘25, but stronger odds of rate cuts would be the big catalyst. 10. Will bonds keep lagging equities amid deficit fears? Probably. Spikes in yields are likely, fiscal discipline seems unlikely, and buyers are wary”

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Bluesky post of the day:

Diversion: “The Next Big Cancer Treatment Could Be Herpes” – Gizmodo