Q: Currently we own MG with the purposes of collecting a dividend and getting some growth. With its current performance, we’re wondering if a RY might be a better choice with a similarly growth/dividend profile? If possible, are there any other MG substitutes (regardless of sector) that you like better?
Thank you for the fantastic product.
Mike
Thank you for the fantastic product.
Mike
5i Research Answer:
MG has been at a cyclical trough in its cycle. As a result, the share price has been under pressure recently, we think MG will come out stronger on the other side the economic recovery.
RY is a high-quality bank with a track record of growing dividends and one of the highest ROE in the industry. As a result, valuation is trading at a premium valuation most of the time.
Overall, we would be comfortable holding both RY and MG, we expect both to do well in the next three to five years. Choosing just one, today we would side with RY. We also like other higher dividend yield stocks such as QSR, X, and AW.UN.