London, UK, 25 April 2018
Edison issues review on Canadian General Investments (CGI)
Canadian General Investments (CGI) is a Canadian investment corporation, providing investors with a broad exposure to primarily Canadian, but also selected US, equities. Manager Greg Eckel suggests the company may be considered a 'one-stop shop' for investment in Canada. CGI has a positive investment track record; it has outperformed its benchmark S&P/TSX Composite index over one, three, five and 10 years, and over much longer time periods. More recent performance has benefited from a repositioning of the portfolio at the beginning of 2016, which included increasing the materials exposure. Total annual distributions have remained stable for the last six years, but the manager is hopeful that annual dividends can increase in the future. CGI has a dividend yield of 3.4% (including a 4c special dividend).
CGI's current 30.1% discount to NAV is broadly similar to the averages of the last one, three and five years (range of 28.1% to 28.8%). The wide discount may be a result of the company's relatively low level of liquidity due to its majority insider ownership, or the high level of gearing. Due to CGI's favourable tax status as a Canadian investment corporation, the board is unable to repurchase shares to help manage the discount. In recent years, there has been more emphasis on regular quarterly rather than year-end special dividends; CGI's dividend yield is 3.4%.
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