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Pro Picks: Dividend Stocks Picked by AI

Investment ideas from Noah Solomon’s Outcome Metric Asset Management

Watch the full episode: Would you trust AI to pick your stocks? On this episode of In the Money with Amber Kanwar we sit down with Noah Solomon, CEO of Outcome Metric Asset Management, to unpack how he developed an artificial intelligence program to systematically pick Canadian dividend-paying stocks. With a track record of beating the index by 2,500 basis points net of fees, Noah breaks down what makes his model so effective and how “paranoia built into the algorithm” has helped him weather market storms.

Pro Picks is brought to you by ATB Financial. With $62 billion in assets, ATB Financial is powering possibilities for more than 820,000 financial services clients in Alberta and beyond. ATB’s Capital Markets arm is a full-service investment dealer that offers investment and corporate banking, sales and trading, institutional research, and risk management. Visit www.ATB.com/inthemoney for more information.

  1. Wheaton Precious Metals (WPM)

Sector: Precious Metals (Gold Streamer)
Wheaton Precious Metals is part of a basket of gold stocks, with a portfolio weighting of about 5%.

Why It’s Selected:

  • No Market Correlation: Gold stocks, including Wheaton, are the only group with no correlation to the market index, providing diversification value.

  • Consistent Dividend Increases: Wheaton has been raising dividends steadily without cuts, enhancing its appeal.

  • Mathematical Diversification Value: The AI model weights Wheaton prominently due to its low correlation, not a bullish view on gold itself.

  1. Empire Company Limited (EMP.A)

Sector: Consumer Staples (Grocery)
Empire, which owns Sobeys and Farm Boy, is overweighted in the portfolio as a low-volatility grocery stock.

Why It’s Selected:

  • Low Volatility: Empire exhibits low volatility, as people need to eat regardless of economic conditions, reducing cyclical sensitivity.

  • Oligopoly Advantage: Operating in Canada’s entrenched grocery oligopoly, Empire faces minimal tariff impacts and can pass import costs to consumers.

  • Stable Beta: The model captures Empire’s low beta, reflecting investor pricing of its stability.

  1. Capital Power (CPX)

Sector: Utilities (Power Generation)
Capital Power is selected by the AI model for its dividend profile, despite a choppier price chart.

Why It’s Selected:

  • Steady Dividend Growth: Capital Power has consistently increased its dividend without cuts.

  • Yield Relative to Volatility: The stock offers an attractive yield relative to its volatility, though recent volatility increases may affect future weighting.

  • Model-Driven Pick: The AI model identifies Capital Power for its mathematical fit, with rebalancing potentially adjusting its allocation.

Disclaimer: The information provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice. The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. The host and guests may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial advisor or professional before making any investment decisions.

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