Corporate Finance Project

Table of Contents

Overview of Selected Five Stocks 2

Analysis 3

1. Risk & Return of each stock 3

2. Stock Correlation 4

3. Diversification opportunities 4

4. Five Stocks’ Beta 7

Conclusion 8

References 9

Appendix 9

Overview of Selected Five Stocks

We have chosen 5 stocks of 3 sectors from TSX listed companies that have equity market capitalization of greater than $100 million as of December 2014. They are Royal Bank of Canada (RBC), Bank of Montreal (BMO), The Toronto-Dominion Bank (TD), Loblaw Companies Limited (Loblaws) and Canadian Natural Resources Limited (CNRL). To help investors make right choices, we applied markets and industries analysis, the process of evaluating stocks, calculating related data in detailed analysis.

There are 3 companies we chosen from bank industry. Canada’s banks are consistently rated as sound and safe, they are seen as strongly positioned to grow. Canada’s Big Six banks (including these three chosen banks) are well capitalized, well managed and deeply entrenched in the nation’s economy, contributing significantly to its growth. As for Canadian food and grocery market, the sector will remain highly competitive. It is forecasted that a return to an inflationary environment should help boost sales growth rates, although the pace of economic growth may be slower than originally anticipated (analysis, retailer, 2014). On the other hand, natural gas prices have been soaring by May in 2014, and the leading natural gas stocks are breaking out. However, along with the international oil prices steep falling, the gas stock market started to rebound.

Here are the basic information of these 5 companies for investors:

Royal Bank of Canada (RBC), Canada’s largest bank by market capitalization with broad leadership in financial services. The Company provides personal and commercial banking, wealth management services, insurance, investor services and capital markets products and services on a global basis. Bank of...