It was another intense week of quarterly results. The good news is that it didn’t seem as volatile as the previous week in terms of reactions to earnings. In fact, we had some strong results in Park Lawn Corporation, Exchange Income Corp, Alaris Equity Partners, and Savaria that sent share prices upwards.
We’ve got lots to cover so let’s dive right into it. Remember, there is hours of research packed into each of our individual reports, which are linked below every company in this e-mail. So if you’re considering purchasing one, have a read of the reports, as they’re updated every single quarter.
First, we’ll start with stocks on the Growth Bull List, particularly the ones with healthcare exposure.
WELL Health Technologies (TSX:WELL)
Well Health delivered yet another record quarter. While the company posted a net loss of $0.06 which missed by $0.07, revenue of $99M topped expectations for $93M. Another bright spot, adjusted EBITDA of $22.3M also came in higher than the expected $19.88M.
The company is now sitting on pro-forma annual revenue of $450M and adjusted EBITDA of $100M. That represents a $50M increase from last quarter. All in all, it remains on track to meet its stated outlook and remains one of the best telehealth stocks in the country.
You can have a read of our updated Well Health report here
Savaria (TSX:SIS)
Savaria delivered results that were relatively inline with estimates. Earnings of $0.15 missed by a penny while revenue of $180.8M beat by a few hundred thousand. Interestingly, Savaria also pointed to supply chain issues and pointed specifically to freight costs as a headwind that weighed on margins. Yet, the company’s share price did quite well post-earnings.
Why was that? We believe it is because Savaria was one of the few companies to offer a glimmer of hope to investors. The company mentioned that they “witnessed a decrease in exorbitant freight costs more recently” and it also re-iterated guidance for $100M EBITDA in 2021. That was enough to instill confidence in the markets.
You can read our updated report of Savaria here
Dialogue Health (TSX:CARE)
The last one of our Growth Bull List stocks to report earnings was Dialogue Health. This one cratered on earnings which reinforced the fact that it is one of our most volatile, and highest risk stocks on the Bull List. The company ran up quite a bit pre-results, so after it posted a higher than expected loss and a miss on revenue, it was not surprising to see the stock fall.
However, that is short term thinking. The miss on revenue was negligible (a few hundred thousand) and the company grew revenue by 120% YoY.
It also landed several new logo wins and added 300,000 more members QoQ. An encouraging note on the quarter? The company said churn (existing customers unsubscribing from the company’s services) is practically non-existent.
The company is executing just fine and is the cheapest telehealth stock out there.
You can read our updated report of Dialogue Health here
Park Lawn Corporation (TSX:PLC)
Park Lawn delivered arguably the best quarter of the week as the company handily beat estimates, something that is starting to become a trend. Earnings of $0.38 beat by $0.07 and revenue of $92M beat estimates for $87.5M. EBITDA margins continue to improve and through the first nine months of the year they have increase by 210 basis points (2.10%.)
There really isn’t much to say bout Park Lawn outside of the fact that it remains an under appreciated stock. In Canada, it is the only publicly traded company in the industry and it continues to consolidate what is a highly fragmented industry.
Of note, the company did announce that it plans to start reporting in USD considering USD represents a sizeable amount of revenue. This should limit the impact of currency fluctuations on earnings moving forward.
Many members have asked us over the last year if Park Lawn Corporation is still worthy of a spot on our Bull List, considering it has been featured for quite some time. The answer to that question is yes.
You can read our updated report on Park Lawn Corporation here
Docebo (TSX:DCBO)
Although we have placed Docebo in “Neutral” status on our Bull List due to valuation concerns, it is a highly owned stock here at Premium so we continue to update the report.
Docebo delivered a strong quarter, although you wouldn’t know it by the post-earnings drop. Not surprising given that most in tech have been taking an immediate hit post earnings. Revenue was up 68% YoY and topped estimates by $1.6M. Of note, the company did beat on earnings, but that is a little misleading…
Had it not been for a one-time forex gain, losses would have been higher than estimates.
Overall though, it was another really good quarter. Profitability remains an issue, but we are not concerned about this over the short to medium term. It continues to add notable customers and posting healthy growth rates.
You can read our updated report on Docebo here
Boyd Group Services (TSX:BYD)
Boyd delivered mixed results. Earnings of $0.14 per share missed significantly as estimates were calling for $0.85 per share. On the bright side, revenue of 617M did beat by $2M.
So why the big miss on earnings? A challenge that has been quite common given the impacts of the pandemic – supply chain issues. Since the company struggled to get parts through normal suppliers, it had to go outside of its regular network. This led to higher costs and lower margins.
The good news is that Boyd indicated they expect margins to recover in early 2022. Outside of this, the company is still picking up new locations and through the first nine months of the year has added 113 locations.
This is a company that is well known for strong execution. So, we’re not worried in the slightest. The considerable drop in price post earnings could be a strong opportunity for those looking to buy.
You can read our report on Boyd Group Services here
That was plenty to digest. Now, on to Dividend Bull List stocks
Algonquin Power (TSX:AQN)
Let’s start with Algonquin Power (AQN), which delivered a strong quarter. Earnings of $0.15 met estimates while revenue of $528.6M topped expectations for $489M. The results were actually one of the best in the utility industry which saw many miss estimates this quarter.
While the markets reacted negatively to the quarter, it remains well positioned to grow the business and deliver excellent results. A reminder that the Kentucky Power acquisition is a good one and we explain in detail in our updated report why it is not a dilutive acquisition in the traditional sense.
You can read our updated report of Algonquin Power here
Exchange Income Corporation (TSX:EIF)
In our opinion the best results of this earnings season belonged to Exchange Income Corp (EIF). Earnings of $0.73 beat by $0.10 and revenue of $400M beat expectations for $347.27M.
We remain impressed by the ability of management in navigating the pandemic. The company not only managed to keep the dividend steady, but also make strategic acquisitions.
While the effects of the pandemic are “far from over,” this is a company that continues to deliver. Supply chain issues are a problem for its manufacturing segment, but given its performance over the pandemic if there is any company we can trust to navigate such an environment, its Exchange Income Corp.
You can read our updated report on Exchange Income Corporation here
Minto Apartment REIT (TSX:MI.UN)
Minto delivered an okay quarter. While there are no estimates, revenue was effectively flat, and FFO and AFFO declined slightly QoQ. This was not all that surprising, since the company did warn that it was in a period of flat to negative growth.
On the bright side, it did say growth is expected to ramp up and we should see growth return next quarter. It also raised the distribution by 4.4%, a sign that management is confident in its growth prospects.
Minto remains a REIT that Premium members can look to for outsized growth in the sector. Just know that the distribution is not as attractive as many others. This is exactly why we feature both Minto REIT and its higher yielding residential alternative, Killam Apartment REIT.
You can read our updated report of Minto REIT here
Intact Financial (TSX:IFC)
Intact had a terrific quarter. Earnings of $2.87 crushed estimates for $1.73 per share and revenue of $5.44B beat by $33M. There is just no stopping Intact and it is arguably the best insurance company on the TSX.
Accompanying earnings, the company also announced a 10% raise to the dividend. The raise will effectively extend its dividend growth streak to 17 years. There really isn’t much to not like about Intact at this point, and we do not see a situation where it is removed from the Dividend Bull List any time soon.
You can read our updated report of Intact Financial here
CT REIT (TSX:CRT.UN)
CT posted a mixed quarter. Revenue missed slightly but it is posting some consistent growth. AFFO and FFO grew by 8.2% and 5.9% respectively and payout ratios continue to drop. Through the first nine-months of the year, the payout ratio against AFFO dropped to 73.8% from 76.8% over the same period last year. Just a steady, reliable income play.
This is not a REIT that is going to give you explosive growth, but it will provide you with a mid 4% distribution paid out monthly, and it has shown it can navigate even the toughest of environments as a retail REIT, surviving the pandemic without a scratch.
You can read our updated report on CT REIT here
TMX Group (TSX:X)
Speaking of reliable, TMX Group delivered yet another good quarter. While earnings of $1.57 missed by a penny, revenue topped expectations by ~ $1M. Overall, results were pretty much inline with expectations. The company posted double-digit growth across all metrics and quite simply put in another consistent quarter.
CT REIT and TMX aren’t flashy, but they deliver consistently. The goal of your investment portfolio should be that it is greater than the sum of its parts. It’s fairly important to understand that not every stock inside of our portfolio needs to be flashy, and strong stable options contribute to outperformance just as much as a high growth play.
You can read our updated report on TMX Group here
Alaris Equity Partners (TSX:AD.UN)
Finally, we have Alaris Equity Partners. Revenue of $42.9M topped expectations for $38.7M while EBITA came in a little light missing by a few hundred thousand. The company ended up reducing debt by $257M thanks to strong cash flow generation.
In our opinion, Alaris is an under covered gem. Despite strong performance since we added it to the Bull List it still yields close to 7% and remains undervalued. There is also no need to worry about the distribution as it accounts for only 65% of free cash flow.
Of note, this is the most recent addition to my portfolio (Dan) and I feel Alaris will be part of the income generating portion of my Canadian portfolio for the foreseeable future.
You can read our report on Alaris Equity Partners here
That brings us to the end of our earnings recap
Nothing here that really changes the investment thesis on any of our Bull List Stocks. Not surprising since a quarter is typically too short of a period to base long-term decisions off of. Once we start to see disappointing quarters stack on top of each other, then it is time to re-evaluate.
This coming week, GoodFood is reporting earnings and we are still waiting on dates from Enghouse and Calian Group. The others will come later in the month or early December.
That means, next week we’ll touch on FOOD’s earnings. AND, we are also going to talk about a topic that has come up several times recently – when do you know its time to cut your losses?
