When it comes to the TSX Dividend Aristocrats Index, there’s exciting news on the horizon! Scotiabank's strategist anticipates the addition of 11 new stocks to this prestigious index, a move that could significantly impact investors and market enthusiasts alike.
In his daily analysis, Scott Barlow from The Globe and Mail provides insightful research and commentary on current market trends. One notable perspective comes from Paul Cheng at Scotiabank, who expresses optimism for natural gas while remaining cautious about crude oil prices. He explains, "We have revised our forecasts for Brent crude oil prices in 2026 and 2027 downward, as we believe that the elevated geopolitical risk premium is likely to be temporary. We anticipate a return to a bearish trend due to weakening supply and demand fundamentals. Moreover, the recent actions taken by the U.S. in Venezuela may signal a new era for OPEC, potentially leading to lower oil prices in the long run."
On the flip side, Cheng’s enthusiasm for North America's natural gas sector is palpable. He asserts, "We believe that the upcoming wave of liquefied natural gas (LNG) projects, coupled with an increase in demand for gas-fired power generation, typical winter weather conditions, and a low number of active rigs will set the stage for robust NYMEX prices through the first half of 2027. Additionally, we are optimistic about the AECO market, especially if LNG Canada proceeds smoothly and on schedule. While we have maintained our crack spread forecasts for 2026 and 2027 largely unchanged, we did raise our projections for 2028-2030 by $1 to $1.3 per barrel annually, driven by our anticipation of rising Renewable Identification Number (RIN) prices."
The crack spread, for those unfamiliar, refers to the profit margin refiners expect to earn from turning crude oil into refined products.
Now, let’s delve into the anticipated changes within the TSX Dividend Aristocrats Index. Strategist Jean-Michel Gauthier from Scotiabank projects that a total of 11 stocks will be welcomed into the index during its annual rebalancing event on January 30. He points out, "On December 31, 2025, S&P will use this date to assess dividend and pricing data. Initial changes will be announced on January 23, right after market close. Given that it has been five years since many companies cut their dividends in response to the pandemic, a number of firms are now showcasing a solid five-year record of dividend growth. We expect this to be the most substantial addition since the rebalance in January 2020."
The companies poised for inclusion include Westshore Terminals Investment Corp., Mullen Group Ltd., Topaz Energy Corp., Brookfield Renewable Corp., MTY Food Group, Cenovus Energy Group, BRP Inc., Richelieu Hardware Ltd., Gildan Activewear Inc., CES Energy Solutions Corp., and OR Royalties Inc. Interestingly, Gauthier also anticipates that Canada Packers Inc. may be removed from the index.
Turning to real estate, TD Analyst Sam Damiani recently shared key takeaways from the company’s seventh annual real estate conference, revealing some intriguing industry trends. He noted, "In retail, we see a cautiously optimistic outlook as leasing activity remains robust, with few tenants raising concerns. The remarkable growth in Same Property Net Operating Income (SPNOI) is projected to persist for the foreseeable future. However, when it comes to apartments, the sentiment appears slightly more negative. Our baseline expectation is for weaker fundamentals to continue until mid-2027, but it seems that demand slowed down during the typically weak fourth quarter.
Regarding industrial properties, there’s a hint of positivity with eased concerns surrounding USMCA negotiations, which has improved visibility for a potential broad resumption of rent growth. Meanwhile, the seniors housing sector remains stable with strong fundamentals, as limited new supply is expected until 2029. In the office market, there is also a slight uptick in optimism, as both Allied and Dream Office report improvements in the quality and quantity of their leasing pipelines.
For context, when discussing larger-cap stocks, our preference list features PMZ.un, FCR.un, BEI.un, DIR.un, and KMP.un. In terms of smaller-cap stocks, we favor DRM, HOM-u, and MHC-u.
Finally, in a thought-provoking post on social media, Carl Quintanilla shares insights from Goldman’s desk, stating, "I still believe the big dynamics are favorable for risk. However, there are moments to accelerate, times to hold back, and instances where it’s best to do nothing. My gut tells me that the appropriate approach for the coming months is to choose the latter option."
In the midst of all these market developments, there’s more to explore, including a spotlight on the most anticipated films of 2026, as highlighted by Gizmodo. Stay tuned for further updates!
