CPP Climbs Past $400 Billion: Here’s What’s in it

If WSP Global Inc. (TSX:WSP), Canadian Natural Resources Ltd (TSX:CNQ)(NYSE:CNQ), and Seven Generations Energy Inc. (TSX:VII) are among the CPP Investment Board’s top five stock holdings, then the stocks could be considered good investment prospects.

| More on:

The CPP Investment Board (CPPIB) is a professional investment management organization that was formed to perform one objective. The organization’s task is to invest the assets of the Canada Pension Plan (CPP) on behalf of its 20 million Canadian contributors and beneficiaries.

The goal of the CPPIB is to maximize returns without undue risk of loss. With this investment strategy, the board is hoping more workers will support the growing number of Canadian retirees. As of March 31, 2019, the assets are over $400 billion. It would be interesting to find out CPPIB’s top five holdings.

CPPIB’s top five holdings

Based on the published data (as of Q1 2019) and arranged by market value, WSP Global (TSX:WSP) is number one on the list. CPPIB holds 20,696 shares of WSP with a market value of $1.5 billion.

WSP is a professional services consulting firm that operates in Canada, the United States, the U.K., Sweden, Australia, New Zealand, Asia, and internationally. This $7.32 billion company develops creative, comprehensive, and sustainable engineering solutions for modern societies to thrive.

The Montreal-based company is present in almost all industries and sectors, including energy, healthcare, rail and transit, and maritime, among others. This industrial stock is a dividend payer, although it rarely appears on investors’ radars.

Second on the list is Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ). CPPIB owns $1 billion worth of shares of CNQ. The energy stock is underperforming year to date, but there is potential upside when the sector improves.

CNQ is on a comeback after back-to-back losses in 2015 and 2016. In the last two years, this $35.8 billion oil and gas E&P surprised investors by posting an average net income of $2.5 billion. With gross estimates of 15.4% this year, analysts are forecasting a price appreciation of 82% in the next 12 months.

Keep in mind that the stock has grown dividends for 17 years. With the potential capital gain and 4.5% dividend yield, the return could be better-than-market average.

Entertainment One, or eOne, is third on the list. But the Canadian multinational mass media and entertainment company is listed on the London Stock Exchange but not on the TSX.

Royal Bank of Canada, Canada’s largest banking institution by market capitalization, is ranked fourth.

CCPIB owns $666 million and $555 million worth of shares of eOne and RBC, respectively.

Rounding out the top five is Seven Generations (TSX:VII). This $2.36 billion low-supply cost energy producer generates revenue from its liquids-rich Kakwa River Project in northwestern Alberta. In return, shareholders enjoy substantial gains.

The oil and gas company is evolving rapidly. Analysts who are covering the stock see Seven Generations turning into a sustainable free cash flow-generating entity and becoming of one of Canada’s highest-growth E&Ps.

Investors should have the confidence to invest in Seven Generations. CPPIB owns 56,399 shares ($544 million) of the promising energy stock. Based on projections, the current price of $6.78 could triple in the coming months.

CPPIB’s total holdings

CPPIB’s published list of publicly traded equity holdings contains 138 stocks whose net market values are more than $1 million. Of the top five, four of them are trade. Any of the four stocks could be valuable additions to your stock portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

Hourglass and stock price chart
Dividend Stocks

Where Will Brookfield Stock Be in 5 Years?

Based on its recent successes, Brookfield Corp (TSX:BN) looks poised to be more valuable in five years' time than today.

Read more »

hand stacks coins
Dividend Stocks

The Smartest Dividend Stocks to Buy With $400 Right Now

The market is full of dividend stocks to buy. Here's a look at two options that cater to both growth…

Read more »

ways to boost income
Dividend Stocks

This Top TSX Dividend Stock Down 10.78% Is Ready for a Rebound

The rebound of an underperforming but top TSX dividend stock is coming due to a significant product diversification.

Read more »

Canadian Dollars bills
Dividend Stocks

3 Dividend Stocks to Supercharge Your Passive Income

These companies are known for their consistent payout histories and high yields can supercharge your passive-income portfolio.

Read more »

space ship model takes off
Top TSX Stocks

My 5 Favourite Stocks to Buy Right Now

There are plenty of great stocks on the market. Here's a look at my favourite stocks to own for growth…

Read more »

Close up of an egg in a nest of twigs on grass with RRSP written on it symbolizing a RRSP contribution.
Dividend Stocks

3 Evergreen RRSP Stocks Every Canadian Investor Should Own

If you're looking into RRSP stocks, it's quite likely you've come across these on many, if not all, of the…

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

3 Reasons Your CPP Benefits Are More Valuable Than You Think

Holding iShares S&P/TSX Capped Composite Index Fund (TSX:XIC) in a TFSA can supplement your CPP.

Read more »

open vault at bank
Dividend Stocks

Don’t Get Cute; Just Buy Stability: Top Defensive TSX Stocks to Buy Now

A healthy risk tolerance is essential for most investors, but many stray from the tried and tested, hoping to find…

Read more »