|
 |
|
|
|||
|
|||
|
|
In the late 19th century, a handful of fur traders set up a trading post in a remote corner of northeastern Alberta. Those traders and their employer, Canada's Hudson Bay Company, could have hardly imagined that their obscure outpost would one day become the very center of North America's oil boom. It's hard to ignore the transformation of Fort McMurray, Canada -- a city so prosperous that it has been dubbed "Fort McMoney" by local residents. Real estate prices have roughly tripled in the past seven years; the median price of a single family home stands at $650,000, up more than $150,000 in just the past year alone. And with the vacancy rate on rental properties stubbornly stuck under 0.5%, entire extended families cram into small two-bedroom apartments. Others choose to rent campsites on the edge of the city to accommodate mobile homes. The town's population has doubled in the past decade to 65,000 and is set to rise to more than 100,000 by the end of 2012. So what's the attraction of this remote city where temperatures regularly top out at less than zero degrees Fahrenheit?
It's
simple: cash. According to a recent story in The Wall Street Journal,
inexperienced truck drivers can earn more than $100,000 per year,
while experienced welders can see their salaries top $200,000. On
top of all that, companies are offering outlandish perks to
attract skilled workers, including free housing, gourmet food and
even free flights back to Canada's more populous cities. And Canada is an absolutely crucial player in the energy
market. In fact, the nation is the United States' single largest
source of imported oil -- more important to U.S. oil supply than the entire Middle East. But that's changed.
By the end of 2010, oil sands production is expected to approach 2 million barrels per day, close to two-thirds of Canada's total output. In fact, the main constraints on growth remain shortages of skilled labor and crucial equipment -- the very shortages that have resulted in high salaries and economic boom times for Fort McMurray. China Looks to Tap Oil Sands The U.S. is the primary destination for Canadian oil exports -- currently, more than three-quarters of Canada's exports go to the nation's southern neighbor. But other countries are also interested in Canada's natural riches. Chinese oil giant CNOOC (NYSE: CEO) made headlines in 2005 when it invested in a handful of oil sands projects. Chinese firms have already invested a total of $300 million in Canadian oil sands plays so far, and more investment is likely in the future. Clearly, this resource could be a valuable source of oil to fuel China's growing demand. And while many focus solely on the oil industry, Canada is also a crucial supplier of other natural resources. Canada remains the number one source of natural gas imports into the U.S. market; Canadian production has been key to meeting rapid growth in U.S. demand. And Canada also ranks as one of the world's top five producers of commodities as diverse as copper, uranium, gold, silver, zinc and lumber. All of these resources are in high demand, particularly in fast-growing emerging markets like China and India. Canadian Stocks Deliver +178% Gains Looked at another way, a $100,000
investment in Canada back in late 1999 was worth $278,000 by the
end of 2007, compared to just $103,700 for the same sized
investment in the S&P 500. And over the past two years alone,
the Canadian market has outperformed the S&P 500 by better than a
3-to-1 margin. Currency Gains Provide Additional Boost The Canadian dollar is in the middle of a long-term uptrend vs. the U.S. dollar, and I expect that uptrend to continue in the coming years. That's great news for U.S. investors with Canadian holdings because the value of their investments -- and dividend payments -- will increase as the Canadian dollar rises.
Capture Dividend Yields of up to 13.3% Thanks to the nation's booming natural resources sector, Canadian companies are now flush with cash, and they're returning a large portion of that cash to shareholders in the form of solid dividend payments. In fact, many Canadian firms now offer enticing dividend yields of 8%, 10% . . . even 12% or more. With these points in mind, I recently added several high-quality Canadian companies to my model portfolios, including an oil and gas giant that controls one of Canada's largest oil sands deposits, and pays an 11.6% dividend yield to boot. I also featured a rock-solid Canadian energy firm that's paying even greater dividends -- dishing out a 13.3% yield. And since those dividends are doled out in Canadian dollars, U.S. investors are likely to earn even more from their investment. If you'd like to learn the names of these companies -- plus receive a steady stream of foreign stocks, funds and other investing ideas with abnormally high dividend yields each and every month -- then I'd like to extend you a personal invitation to try my premium international investing newsletter . . . High-Yield International. Visit this link to learn more.
|
|
|||||||||||||||||||||||||
|
||||
