London, UK, 26 October 2017
Edison issues review on Canadian General Investments (CGI)
Canadian General Investments (CGI) enjoys favourable tax status as a Canadian investment corporation. Its portfolio of primarily Canadian equities is broadly diversified, suggesting that the company can be considered as a 'one-stop shop' for investment in Canada, where there are investment opportunities available across a range of sectors. As a result of positive fundamental stock selection, CGI's NAV total return has outperformed the benchmark S&P/TSX Composite Index over one, three and five years. The board has been shifting emphasis towards more regular interim rather than year-end special dividends; CGI's current dividend yield is 3.1%.
CGI's current share price discount to net asset value of 26.6% is marginally narrower than the averages of the last one, three and five years (range of 28.0% to 29.7%). While the discount may partly reflect the high level of insider ownership, there is scope for it to narrow if there is higher investor demand for Canadian equities or if CGI continues to build on its positive track record (for tax reasons, the company is unable to repurchase shares to manage the discount). The board is placing greater emphasis on regular interim rather than special dividends. CGI currently has a dividend yield of 3.1%.
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