“Maybe you’re just like my mother
She’s never satisfied (she’s never satisfied).” ― Prince
When companies report earnings one of the key factors to focus on is how did they do versus expectations. If a company reports 40% earnings growth you might think that is fantastic but it might be a disappointment if analysts expected 50% growth. It is not just the level of earnings but how they do relative to expectations. There are times where you can beat expectations but the market is never satisfied. Nvidia and TD both beat earnings expectations, but their stocks declined. Another company changed its logo, and the stock dropped more than 7%. Investing is not as easy as it was before.
Uncertainty continues and the market continues to rise. To paraphrase a central banker the next move is data dependent. The Canadian banks reported strong earnings and most gave shareholders further gains on the news. We continue to like the banks for their earnings growth which contributes to continued dividend growth. We see opportunities in other companies with the prospect of dividend growth. That said, we manage portfolios and not just buy dividend stocks. Portfolios have been rewarded this year by significant returns from gold stocks and selected energy stocks. A diversified portfolio should continue to weather volatile markets.
